Steven Brill has authored a cover story for Time Magazine entitled Bitter Pill: Why Medical Bills Are Killing Us. In his article, he discussed the experience of a patient diagnosed with cancer, who selected a treatment center in Texas that did not accept his catastrophic insurance coverage.
This of course left the patient to pay 100% of the costs of his care with his cash, out of pocket, and those costs were tremendous.
One might think that the point of the article was to push for single payer coverage, or some other political message, but it was not.
Mr. Brill, to his great credit, dove instead into the question of WHY those costs were so ridiculously high. He highlighted the simple example of a charge of $1.33 for a single generic Tylenol, when a full bottle of those same pills on Amazon.com was $1.49.
He compared charge after charge to the Medicare reimbursement rate, and found that the hospital charged sometimes 100 times more to the patient he followed.
Towards the end of his piece he attempts to answer the “why” of these insane charges, and highlights the response of the hospital system that their charges and billing practices are in line with all other health care providers, which is sadly true.
Mr. Brill points to the excessive compensation of the executives of these non-profits as a possible proximate cause of the high process charged for the simplest of services. He also highlights that the health care industry also spends 5 times the amount in lobbying that the much maligned defense industry does, and notes that this allows the prices to continue to rise.
With all due respect to Mr. Brill, I think he missed the most glaringly obvious cause of the insane pricing he discovered, but he is far from alone in that. The clues are found in the very first paragraphs of his article. The cause of the overcharges is not excessive executive compensation, is it not lobbying spending, nor is it outright greed….those are EFFECTS not causes.
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