In the current issue of Time, Steven Brill — founder of Court TV and The American Lawyer — has a report that is over thirty pages long, running 24,000 words, on the state of our nation’s health care. It is the kind of investigative report that good journalists used to do, and has been absent far too long from American journalism. If it wins the Pulitzer Prize, Brill and the magazine’s editors will have rightfully earned it. It proves that in some regard, the mainstream media is not dead yet.
The report is not an ideological screed in which the author writes to either support or oppose Obamacare. Rather, Brill travels throughout the nation simply to explore why health care costs so much. He goes to hospitals and doctors’ offices, and he visits individuals whose lives have been ruined by the cost of the care they had to have. He argues that America does not have a health care system based on the free market, in which individuals have a choice about which product to purchase and what vendor to go to. Instead, he argues that health care is a seller’s market — often a monopoly — in which the prices of products they sell have no relationship to the actual cost.
Here are some examples from Brill’s article: Acetaminophen — Tylenol being the most well-known brand — is marked up 10,000% when a hospital patient gets a pill. Niacin costs five cents per pill at a drugstore; hospitals charge $24.00. And with Medicare, the taxpayer picks up the entire tab, medication being just one part of a giant bill.
I am not a policy wonk, and I hope that Yuval Levin or James Capretta, the two best conservative analysts who write for National Affairs and other publications, will address some of the issues Brill raises. Conservative critics will undoubtedly differ with some of Brill’s suggested remedies and agree with others, but his solid report and the facts he presents are inarguable. Our health care costs exceed that of all the other advanced nations, and they are far out of line with the actual costs of the product that is dispensed.
The main find that Brill presents is something few of us have previously been aware of: a list referred to by those in the know as “the chargemaster.” This is the private internal price list for products and services that every hospital administrator has in his or her office.
If you have private insurance or Medicare, what you pay will come far from the price listed on this secret internal list. If you do not have insurance, or have a bad policy, the hospital will try its best to make you pay close to the price on their list, regardless of whether or not it is based on reality.
I urge everyone to read Brill’s entire piece. There is no way an article of this depth or length can be summarized. As he goes through his research, there are moments in the article in which he shockingly — for liberals — praises the approach taken by Republicans and conservatives. On the issue of malpractice suits and the need for reform, he asks: why are so many CT scans given to patients when evidence indicates they are not needed? Why did one patient receive a nuclear-imaging test rather than a less-expensive stress test? The answer is the “defense” strategy — the need to avoid malpractice suits. The hospital can say they administered every possible test and are not responsible if a patient dies. Brill writes:
The most practical malpractice-reform proposals would not limit awards for victims but would allow doctors to use what’s called a safe-harbor defense. Under safe harbor, a defendant doctor or hospital could argue that the care provided was within the bounds of what peers have established as reasonable under the circumstances. The typical plaintiff argument that doing something more, like a nuclear-imaging test, might have saved the patient would then be less likely to prevail.
When Obamacare was being debated, Republicans pushed this kind of commonsense malpractice-tort reform. But the stranglehold that plaintiffs’ lawyers have traditionally had on Democrats prevailed, and neither a safe-harbor provision nor any other malpractice reform was included.
Later, Brill writes:
Finally, we should embarrass Democrats into stopping their fight against medical-malpractice reform and instead provide safe-harbor defenses for doctors so they don’t have to order a CT scan whenever, as one hospital administrator put it, someone in the emergency room says the word head. Trial lawyers who make their bread and butter from civil suits have been the Democrats’ biggest financial backer for decades. Republicans are right when they argue that tort reform is overdue. Eliminating the rationale or excuse for all the extra doctor exams, lab tests and use of CT scans and MRIs could cut tens of billions of dollars a year while drastically cutting what hospitals and doctors spend on malpractice insurance and pass along to patients.
This conclusion is not one likely to be appreciated or taken to heart by liberal advocates of universal health care, or socialized medicine. Calling a Republican position “commonsense” is not what one expects to read in the MSM. Later, when he addresses the issue of the care cost curve, Brill concludes that Obamacare does nothing to restrain cost, contrary to the president’s claim that it does:
[The policy experts] know what the core problem is — lopsided pricing and outsize profits in a market that doesn’t work. Yet there is little in Obamacare that addresses that core issue or jeopardizes the paydays of those thriving in that marketplace. In fact, by bringing so many new customers into that market by mandating that they get health insurance and then providing taxpayer support to pay their insurance premiums, Obamacare enriches them. That, of course, is why the bill was able to get through Congress.
Obamacare does some good work around the edges of the core problem. It restricts abusive hospital-bill collecting. It forces insurers to provide explanations of their policies in plain English. It requires a more rigorous appeal process conducted by independent entities when insurance coverage is denied. These are all positive changes, as is putting the insurance umbrella over tens of millions more Americans — a historic breakthrough. But none of it is a path to bending the health care cost curve. Indeed, while Obamacare’s promotion of statewide insurance exchanges may help distribute health-insurance policies to individuals now frozen out of the market, those exchanges could raise costs, not lower them. With hospitals consolidating by buying doctors’ practices and competing hospitals, their leverage over insurance companies is increasing. That’s a trend that will only be accelerated if there are more insurance companies with less market share competing in a new exchange market trying to negotiate with a dominant hospital and its doctors. Similarly, higher insurance premiums — much of them paid by taxpayers through Obamacare’s subsidies for those who can’t afford insurance but now must buy it — will certainly be the result of three of Obamacare’s best provisions: the prohibitions on exclusions for pre-existing conditions, the restrictions on co-pays for preventive care and the end of annual or lifetime payout caps.
Call it, if you will, the law of unintended consequences.
If you are under 65, and think your insurance policy covers what health care you must have in the face of a medical catastrophe, think again. Read Brill’s findings about the specific cases of individuals whose savings and money disappeared after seeking necessary treatment, only to find that their insurance hardly helped at all. He makes an argument that lowering rather than raising the age in which Medicare kicks in will actually help lower costs, and make the market more competitive. Brill knocks the drug industry and the Obama administration for getting industry approval for Medicare by agreeing not to allow negotiating to lower drug prices, and also not allowing comparative-effectiveness research on drugs.
Some will disagree with Brill’s conclusions. Again, I wait for policy experts to evaluate his article and to discuss their areas of agreement and disagreement. But I think every American who uses health care services — and this means all of us — should read Brill’s article and evaluate his findings. And next time you go to a hospital, look at the actual bill the hospital submitted to your insurance company. Be prepared for a shock.
It turns out that this cover story was originally supposed to be the cover story for the re-launch issue two weeks ago of The New Republic, which instead ran the now famous softball interview with Obama. Michael Calderone reported the following at Huffington Post:
By his account, Brill met last June with New Republic editor Franklin Foer, who spoke about relaunching the publication and his determination “to make it a different type of Washington magazine that would do nitty-gritty long-form journalism.” Brill said he told Foer that he’s always wanted to write something about why health care costs so much. “I wanted to follow the money and get the price tag,” Brill recalled. He said that Foer offered him “a ton of money” to write that piece as the cover story for the relaunch issue and promised significant promotion for it.
He also wrote the following:
Brill said his only early concern about the piece came up in email conversations with Foer and Hughes, in which the editors referred to it as “the single-payer article” — a description Brill felt didn’t capture the thrust of the piece and falsely suggested he was taking an editorial position in favor of a single-payer health care option.
Indeed, readers of Brill’s article will find that he strongly opposes a single-payer solution for the health crisis, putting him at odds with the left wing of the Democratic Party and evidently TNR’s new editor as well. Brill now calls editor and TNR owner Chris Hughes a liar, and proclaims that he will never write for the magazine again. So you can call this “the article the New Republic would not run.”