Steven Brill has a great article in Time called Bitter Pill: Why Medical Costs are Killing Us. I found it nauseating and terrifying — and I have health insurance. It is nauseating that helpless sick people are billed huge amounts of money that bear little relation to costs. It is terrifying that our government has failed to protect us from this.
Brill’s article is about the details of health care costs in America, especially hospital costs. Markups are huge. One example is a test strip for measuring blood sugar. The patient was charged $18 for each strip. On Amazon, the strips cost $0.50 each. The patient had no choice and was not told the wildly-inflated price. Brill gives many examples of similar markups. Hospitals, including nonprofit hospitals, are large prosperous businesses with very well paid CEO’s (e.g., $1 million/year). Yet Americans pay far more for health care than people in any other country and, judged by life expectancy, get worse results than people in about 40 countries. Brill’s article begins to explain the discrepancy.
Asked to explain their prices, many hospitals refused. One of them, MD Andersen in Houston, gave a statement that Brill quotes in part:
The issues related to health care finance are complex for patients, health care providers, payers and government entities alike . . . MD Anderson’s clinical billing and collection practices are similar to those of other major hospitals and academic medical centers.
Judging from the widespread refusals to explain and answers like this (“everyone does it”), the prices are indefensible.
The term stagnation — America is in the grip of profound stagnation — may be misleading because it makes it sound like things are staying the same. People point to a lack of increase in the median income over the last 30 years as indicating “stagnation”. Beneath stagnation is problems stacking up unsolved. (When they are solved, spread of the solutions produces an increase in income.) The problems aren’t staying the same: They’re getting worse. Health care costs are a good example. Health care costs have gone up faster than inflation for a long time, with plenty of signs that the American excess (the difference between what Americans pay and what everyone else pays) is completely wasted. (Or worse, given the many bad effects of drugs, surgery, and other high-tech medicine.) The American excess isn’t trivial, so median income, adjusted for it, has been going down for a long time, over the same period of time that median income in almost every other country has gone up. Quite a comment on the quality of our government.
As Brill says, the health care debate has been about who will pay? The question are prices too high? has been ignored. Jon Stewart said, “This should be a Silent Spring moment.”