Steven Brill on Health Care Pricing and Profit


Steven Brill is the author of the article reviewed in this post, the March 4, 2013 TIME magazine Special Report: “Bitter Pill: How outrageous pricing and egregious profits are destroying our health care.”  He is also the author of “Class Warfare: Inside the Fight to Fix America’s Schools,” the founder of Court TV, and the founder of the periodical “American Lawyer.”

I’ve been putting off this post for a few weeks due to the sheer volume of the article: 36 pages with photos, graphs, charts, and sample invoice sections.  I’ve read the article several times and marked it up trying to pick out the highlights, only to come to the conclusion that in order to do justice to the piece I’d have to post a 25 or more page review.  Every point the author makes is important, most are surprising, and many are just plain depressing.

Examples:

1)  We “…spend almost 20% of the gross domestic product on health care…more than the next 10 biggest spenders combined…,” but studies have shown our results are “…no better and often worse….” than those of countries that spend about half of what we spend.  The cost of Hurricane Sandy – $60 billion – is nearly equal to what we spend on health care every week.

2)  Congress does not allow Medicare to negotiate drug prices or the cost of medical devices; e.g., canes and wheelchairs.

3)  There are 7 health care industry lobbyists for every member of Congress.

4)  Hospital charges are determined by something called a “chargemaster,” apparently a “massive computer file” of charges that one hospital executive described as a list “…set in cement a long time ago and just keep going up automatically.”

5)  The article contains dozens of examples of hospital charges 10-50-100 times higher than Medicare pays for services, bandages, test strips, etc., yet the numbers show that hospitals still make money on Medicare patients.

6)  “Nonprofit” hospitals are making millions and paying millions to their CEO’s.  (In a list of the 10 largest nonprofit hospitals operating profit ranged from $118 million to $770 million, and CEO compensation from $2.2 million to $6 million.)

I have only scratched the surface of the issues and examples provided in the article.

What to do about all this?  A few of Brill’s suggestions:

1)  Tighten antitrust laws so that fewer hospital conglomerates can bully insurance companies.

2)  Tax hospital profits and put a surcharge on all hospital administrative compensation.

3)  Do away with chargemasters.

4)  Amend patent laws to limit drug company exploitation or set price limits or profit margin caps.

My hope is that this brief review encourages a study of the complete article.  Congratulations to Steven Brill and TIME magazine for setting out issues that should be acted upon by medical experts and our leaders in Washington.

The article concludes with a quote from Gerard Anderson, a health care economist at Johns Hopkins Bloomberg School of Public Health, who says the “…obvious and only issue…” in the health care debate should be that “All the prices are too damn high.”

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3 thoughts on “Steven Brill on Health Care Pricing and Profit

  1. I am a little late with this, but yes this is the biggest scandal and most destructive aspect of our society today. Unfortunately I don’t see anyone with the courage to address it. Maybe if Obamacare can survive it can be a starting point for addressing some of these issues.

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