TIME’s Exposé of the Medical Complex's Price Gougers (2)

It is easy to see that a recurring theme in Steven Brill’s TIME article ‘Bitter Pill’ is the chance nature of most American health care. Live in the wrong place, be the wrong age, or just have an accident, and you are up the creek and liable to be clobbered with costs via “charge master”. This is the automatic billing machine now operating as a deus ex machina in most non-profit hospitals and contributing mightily to soaring medical costs to the tune of $750b waste each year.


For those with excellent health insurance, like my niece (who works at Oracle) and who just yesterday  underwent partial mastectomy for breast cancer, the excruciating pain from medical bills is held at bay. She is effectively insulated, so there is no suffering on top of the physical agony, of say having to undergo cancer treatment. For many others it’s not so clear cut or painless cost-wise.


For example, there’s the sad case documented by Brill of Emilia Gilbert (p. 28) now 66, who merely had the misfortune to slip and fall on her face one evening in 2008 – at the age of 61 and before Medicare eligibility. Her nose bleeding heavily she had to go to the ER at Bridgeport Hospital. She ended up with $9,418 in medical bills which still have her “hyperventilating”. The CT bills alone (for 3 CTs) came to $6, 538, while Medicare would have paid $825. (The Bridgeport Hospital had an operating profit of $52 million in 2010)


Worse for Gilbert, she only learned too late that the health insurance offered by her employer as Cigna (a top name) was not its top tier version but rather from a Cigna subsidiary called ‘Starbridge’ offered for low wage workers. (As usual, the low wage workers are the ones that get screwed in this country) That meant she was “on the hook for about $7,000 of her $9,400 bill)


Then there was the case of ‘Steven H.’ who went into Mercy Hospital in Oklahoma City for a simple outpatient procedure (laparascopy) that ended up costing $87,000. (Part of the multitude of costs rung up by the hospital’s charge master: $32 for a blanket to keep patients warm). The hospital is evidently run by the Sisters of Mercy hospital chain (p. 33) which collected $337m for fiscal year ending June, 2011 of which $34 million was its operating profit. This from a group that professes as its mission: “to carry out the healing ministry of Jesus by promoting health and wellness.”  Well, pardon me, but I doubt Jesus would have taken $34 million in profits for his healing!


Most shocking regarding outpatient procedures such as those experienced by Steven H. are that they are responsible for nearly two-thirds of the $750b in medical waste overspending each year. According to Brill:

“This includes work done by physicians, laboratories and clinics- including diagnostic clinics for CT scans and blood tests- and same day surgeries and other hospital treatments like cancer chemotherapy. “


TIME’s Brill further cites a McKinsey survey that outpatient Emergency room care averages an operating room profit of 15%, compared to inpatient care which has a margin of only 2%.


The reason? According to one medical economist:

“You get 10% or 20% more patients in there every day who don’t have to board overnight and that goes straight to the bottom line.”


Hmmmmmm….sounds awfully similar to the reasons the airlines have for continually decreasing the seat pitch for economy class to pack more hapless passengers in and rack up the profits!

One of the saddest cases Brill investigates is that of ‘Steven D.’ (p. 37) who had the misfortune to get lung cancer at the age of only 42. His treatment had an initial price tag of $348,000 but his wife Alice was later able to secure the services of a billing advocate who got the Seton Medical Center in Daly City, Calif. to write off $297,000 of the bill. Just as well after seeing what was originally itemized, including: $24 (each) for niacin pills and a $77 charge for simple gauze pads (p. 38).

One year after the death of Steven D. his wife Alice enunciated the primary lesson she learned from the ordeal (ibid.):

“I’m never going to remarry, I can’t afford the liability.”


This was after she had to cover the balance of her hubby’s medical bills, including shelling out $30,000 of her own money and still owing $142,000. Imagine that! She can’t afford to remarry because the next  potential husband may be another medical liability. Do I blame her for evincing a crass attitude? NO! I blame a nation that would allow and enable a system that drives its citizens to such economics over all desperation. It is a reminder of the famous words of Charles Reich in his ‘Opposing the System’ (p. 183)::


"When society itself comes to be modeled on economic and organizational principles, all of the forces that bind people together are torn apart in the struggle for survival.  Community is destroyed because we are no longer 'in this together' because everyone is a threat to everyone else. "

BINGO!

But some of the worst travesties are to do with the ‘Cancer Drug Profit Chain’ (p. 43), for example the case of the drug Flebogamma which features an astounding mark-up. Compounding the travesty is that drug makers are free to set their own prices. This seems to make sense in a “free market” economy until one considers, as Brill does, that the drug is a one-of-a-kind life saving serum. In this case, we no longer have a free market but a "controlled market". This means patient "choice" is a sham: You either pay $6,000-odd a month for the life-saving drug or you die. Some deal!

Brill notes (p. 46) that “our laws do more than prevent the Government from restraining prices for drugs the way other countries do, it also restricts the single biggest buyer Medicare – from trying to negotiate drug prices”


Of course, this is totally whacked out double down insane, and shows the country has no real vested interest in controlling medical costs or I would argue, the long term deficit. Never mind the rhetoric coming out of D.C., the facts belie any serious interest in debt control, but rather expediently piling added financial burdens and social insurance cuts onto the most vulnerable to support the lifestyles of the wine -and -brie plus twin- Bentleys class, be they "liberals" or conservos.


To show how insane and hypocritical this country is, consider this: Sloan Kettering researcher Peter Bach reported in a 2009 article in the New England Journal Of Medicine (p. 46) that “Medicare’s spending on the category dominated by cancer drugs ballooned from $3 billion in 1997 to $11 billion in 2004..” He projects it may now be over $20 billion.


Bach, on the basis of this finding, pushed with other experts to establish a Patient-Centered Outcome Research Institute to expand comparative research investigations. Such efforts would be able to ascertain, for example, that if cancer drug A works better than drug B and is less expensive, then A ought to be selected for Medicare (Part D) Prescription Drug Formularies over drug B. 


Alas, a Repuke- dominated congress jumped in and added eight provisions to fuck the deal. These provisions restricted how the research could be used, with the primary one spelled out as (p. 46):

“Findings shall not be construed as mandates for practice guidelines, coverage recommendations, payment or policy recommendations.”

As Brill notes:  “With those 14 words the work of Bach and his colleagues was undone and costs remain unchecked.”

Are the Repukes and their ilk really interested in cost-management and “preserving entitlements” for future generations? Hardly! Like their determination to protect the wealth of the richest 1% they are determined to milk Medicare dry by any means they can to protect the out-sized profits of the Medical Industrial complex.


As for the citizens (victims) snared by this gluttonous, greedy and egregious system? They can catch as catch can, scrape by while being pursued by bill collectors, maybe rob a bank to get $$, kill themselves or simply refuse to remarry since the next partner may be a “liability”. (But they better pay those medical bills NOW...and oh yes, no trying for Chapter 11 bankruptcy!)

No wonder this country is in such sad and sorry shape! I recommend that interested readers get hold of the whole Brill article (March 4, TIME) to find out how profoundly fucked our whole health care system is and the extent to which it’s driving up our national debt! Which, evidently no one in D.C. really cares about, whether the politicos or the Medical Complex's grubby lobbyists.

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 Amazon.com 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!