Monday, March 4, 2013

TIME's Exposé of the Medical Complex's Price Gouging - And Why We Need to Expand Medicare, NOT Cut It! (Pt. 1)

Well, one never ceases learning! The recent (March 4) TIME 24,200+ word article ‘Bitter Pill’ delivered a shock to me and I thought I was au fait with most aspects of our payola health care system. As it turns out, what I knew barely scratched the surface of how Americans are being gouged and their pockets repeatedly picked to the tune of $750 billion a year in medical wastrel spending.

While the putative journalist cognoscenti usually dismiss TIME as “bubble gum” piffle for the hoi polloi, the fact is that it often contains salient and insightful essays. And every now and then ‘TIME’ hits one out of the park with a thorough investigative piece worthy of The Columbia Journalism Review. Such was the case with ‘Bitter Pill’.

The article ranges over 5 effective sub chapters from how people are clobbered in routine care, to the issue of catastrophic and “prestigious care”. One of the stories (p. 18) is that of Sean Recchi, 42, who learned he had non-Hodgkins lymphoma. Before the guy could even be examined for treatment, and before a treatment plan was devised, he had to cough up $48,900 in advance. This was more than the total I had to pay for my prostate cancer treatment back in September.

The total cost to pay for Sean’s initial treatment including initial chemo came to $83,900. Further shocks awaited after 344 lines of hospital bills were printed out, most by a little known automatic program called ‘Chargemaster’ – which computes most of the medical billing.

In perusing the Chargemaster billing, Sean and his wife found one generic Tylenol pill came to $1.50. Cheap? NO! As the article notes you can buy 100 of them on for $1.49, and this without a hospital’s purchasing power. Similar other outrageous mark-ups were found including $283 for a simple chest x-ray for which the hospital was usually paid $20.44 when it treats a patient on Medicare.

Meanwhile, there were Recchi’s blood and lab tests which came to $15,000, while TIME noted that had Sean been old enough for Medicare the full tab would have been “a few hundred dollars”. TIME learned that M.D. Anderson the putative ‘non-profit’ that delivered Rechhi’s care earned a profit of $531 million in the most recent report it filed with the U.S. Dept. of Health and Human Services. As the article put it:

“That’s a profit margin of 26% on a revenue of $2.05 billion, an astounding result for such a service-intensive enterprise.”

Meanwhile the President of M.D. Anderson is paid handsomely, with a total compensation of $1,845,000 last year. TIME notes this salary is “nearly triple the salary paid to the president of the entire University of Texas system” of which M.D. Anderson is a part!

TIME concludes in the case of the Recchis:

“You see nothing rational- no rhyme nor reason- about the costs they faced in a marketplace they enter through no choice of their own. The only constant is the sticker shock for patients who have to pay.”

No wonder, as the article goes on to observe, “people spend almost 20% of the gross domestic product on health care” compared to less than 10 percent in most developed nations.  And further:

‘Yet in every measurable way the results of our health care system produce no better results and the outcomes are often worse than those other countries.”

How did such an atrocious abomination of a system come to be? LOBBYING! TIME cites the Center for Responsive Politics that the Medical Industrial Complex (organizations representing doctors, hospitals, HMOs, nursing homes, Big PhRMa etc) spent $5.36 billion since 1998 lobbying in Washington, which dwarfs that $1.53 b spent by the defense and aerospace industries. No surprise then that with this noisome establishment of parasites we are set to spend $2.8 trillion this year on health care.

No wonder our national debt is exploding (along with monstrous defense spending) !

Note also that this same Medical Industrial Complex is also the one – in league with the Peter G. Peterson bunch, screaming to prevent special bidding by Medicare (say for the best prescription drug prices)-  that has sought to prevent expanding Medicare beyond its current population. But that expansion, by virtue of more rigorous control of costs via standardization, is exactly what would cure our overspending in the medical arena.

Another case highlighted was that of Janice S. (p. 22). Janice made the mistake of calling for an ambulance after experiencing chest pains. It is a “mistake” most of us are asked to make to save our lives, if we even think there’s a remote hint of a heart attack. But see, “Janice” had been out of work for a year and had no insurance. (She was 64, one year shy of Medicare)

As she was rushed to the Stamford Hospital, she might well have jumped out if she’d known in advance she’d be billed $995 for the ambulance ride, $3,000 for seeing the doctors (most of it racked up as waiting time) and $17, 000 for the “testing” – all in all $21, 000 for what turned out to be a false alarm.

One of the series of tests done was “Troponin I” for which she was billed $199.50 each by the hospital’s charge master. Had she been on Medicare, she’d have paid only $13.94 for each Troponin test. Meanwhile, she was billed $157.61 for a CBC (complete blood count) while if she’d been on Medicare, the bill would have come to $11.02.

TIME’s article takes note that many “grouse about Medicare’s payment rates” but goes on to add (ibid.):

“But an annual expense report that Stamford Hospital is required to file with the federal Department of Health and Human Services offers evidence that Medicare’s rates for the service Janice S. received are on the mark”

In actuality, in perusing the Hospital’s actual filing it charged patients $293.2 million for tests similar to the lab tests of Janice S. but which actually cost $27.5 million. In other words, Stamford charged about 11 times its costs.

What is an even worse travesty in all this over-billing, is that “no hospital’s charge master prices are consistent with those of any other hospital, no do they seem to be based on anything objective, like cost”.
HUH? Are you kidding me? And then you have dildo-brains like Boehner’s Repukes and Tea Peas screaming to let Medicare eligibility rise to age 70??

Re: the variant charge master billings, TIME reports “they were set in cement a long time ago and just keep going up almost automatically”.  Great! A deus ex machine billing monster with no one in control!

The TIME author (Steve Brill) adds (p. 23):

“That so few consumers seem to be aware of the charge master demonstrates how well the health care industry has steered the debate away from why bills are so high to who should pay them”
Most revealing? The exorbitant difference between the costs actually indicated and the charges Brill spied by all these “non-profits”. As Brill puts it (p. 26):

“Judging from the difference I saw in the bills examined between a typical charge master price and what Medicare says the item cost, this would mean that ‘$39.3 billion’ in charity care cost the hospitals less than $3 billion to provide. Incredibly, “under Internal Revenue Service rules, nonprofits are not prohibited from taking in more money than they spend”. Holy Samoley! Would that those of us with de-mutualized insurance shares had even half that benefit after taking losses on paper of more than 50%! (A recent court case in January, 2013 in California has asserted the IRS has the right that all such shares have ‘zero’ cost basis, hence if such shares are sold you pay capital gains taxes whether it’s a loss or gain)

Meanwhile, given the monstrous cost vs. profit imbalance of these Non-profits, TIME puts the kibosh on the widely spread meme that “a cut to the provider, i.e. hospital, must also be a cut to the (Medicare) beneficiary”.

Not with those 11x profits over costs astounding profits it ain’t! Be aware of that, folks, as the sequester heats up and those 2% cuts to Medicare providers are exacted. If you hear or see them crying ‘Foul!” you know they are full of shit.

In the meantime, dear readers, maybe this first blog instalment will have imparted a few important lessons:

1) Make sure all your medical ducks are in a row, say before calling for an ambulance for chest pain.

2) Be sure to find out, if and when you do go to a hospital, whether it uses the infamous ‘charge master’.

3) If you must go the charge master route, demand a 50% or better discount on the test(s), e.g. blood test, or refuse to accept it (after you are informed of the charge master price) in the first place.

4) Push your reps for Medicare to be expanded at least to people younger than the current Medicare eligibility age, say to 64 or 63. Fight like holy hell to prevent the eligibility age being raised to 70!

And stay tuned for more in Part II!

No comments: