An American Sickness: How Healthcare Became Big Business and How You Can Take It Back

by Elisabeth Rosenthal

That is true, even though its prices are one-sixth to one-half those charged at Sutter. Susan Foley’s knee scans,

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The government invested heavily in EMRs as a tool to enable good patient care, with the idea that they would allow the sharing of medical records between a sick person’s physicians. But competing health systems have little financial incentive to do so.

“It was really an eye-opener. Regionalization is OK if it brings operational efficiencies,” he told me. “But an executive even told us there are no efficiencies in this. It’s about control, pricing, contracts, profits.”

So I was surprised to hear a medical marketing consultant I interviewed refer to hemophilia not as a devastating, debilitating illness if left untreated, but instead as a “high value disease state.”

Companies wooed each “high value patient” with offers of rides to doctor’s appointments, trips to amusement parks, tickets to baseball games, and even jobs—offers that would have been illegal for doctors, hospitals, or drugmakers to hand out.

we—and our employers and insurers—are shopping for healthcare in a market where everything is monetized to the maximum, without much regard for the implications for patient health.

Even the well-intentioned provisions that managed to survive the tortuous congressional negotiations over the ACA have been in practice diluted and perverted, as providers find ways to maximize revenue by gaming its rules.

President Obama had initially included several ideas in the bill that would have done so—like national negotiation for pharmaceutical prices. To get a healthcare bill passed and to win support from powerful groups like PhRMA, the AMA, the American Hospital Association, and America’s Health Insurance Plans, the administration had to cave on anything that would directly limit the industry’s ability to profit.

Medicare Part D worked just as intended to make drugs more affordable to seniors—but only for a very few years. The medical industry soon developed strategies to benefit financially from the policy, undermining its patient-centered ambitions. Basic drugs for common conditions in the elderly, such as high blood pressure and rheumatoid arthritis, had to be cheap in the decades before Medicare Part D picked up the tab. But once all seniors were guaranteed drug coverage and were paying only a co-payment, drug companies raised prices—a lot. Insurers then responded by charging higher-percentage co-payments to discourage use. Steve Carlson’s NovoLog insulin has become more and more expensive under Medicare Part D. It had previously been covered under another Medicare program and dispensed as a medical supply, at no cost. Now Mr. Carlson’s insulin, which set him back under $20 a month in the 1990s, costs about $700, a part of which he pays himself.

Health insurance cooperatives are a type of not-for-profit insurance—member owned and directed—that was established by the ACA. Strictly speaking, these plans are not really “new,” but more a rebirth of the original not-for-profit Blue Cross Blue Shield–style plans. Their only real mission is to use their members’ premiums to deliver higher-quality, cost-effective healthcare.

But a 2015 study found that when patients were switched into a high-deductible health plan, they didn’t become smarter, more cost-conscious shoppers for medical care. The exorbitant prices demanded by the U.S. healthcare system meant that they mostly just avoided any interactions with medicine at all.

Connecticut’s Office of the Healthcare Advocate said that getting billed for what patients had anticipated would be a free screening colonoscopy has generated more consumer complaints than any other ACA provision.

opportunities a market allows. That’s what they’re supposed to do. Each component of the system is genuinely convinced that it’s not so bad, not responsible for our $3 trillion medical bill. Someone else is more to blame.

Dermatology accounts for only 4 percent of Medicare expenditures! Each segment of our medical system is convinced that its charges are reasonable. But put all the little excesses together and you get healthcare that is much worse and much costlier than the sum of its parts.

medical debt being the single biggest cause of bankruptcy in the United States.

Although we tend to brand other countries as deploying “socialized medicine,” almost all use unique hybrids of government intervention and free market forces. Let’s look at a few basic tools that underpin their relative success at reining in cost.

Cost and cost-effectiveness should be integrated into medical school curricula, and national medical boards should test this knowledge.

rates. I want my doctor to refuse to patronize the plastic surgeon who charges tens of thousands of dollars for a few stitches, or a radiologist who attempts to bill $5,000 for an MRI.

critical of the now-accepted practice of routine radiological screening practices for various cancers: thyroid, lung, breast, and prostate. In some cases the scientific evidence that supports the practice is missing; in others—such as for thyroid cancer—studies have proven it useless.

The nonprofit Leapfrog Group grades all general hospitals on patient safety on a scale of A to F.

There’s also a wealth of information to help you assess your hospital through Medicare’s young online Hospital Compare program

To complete the picture with information about hospital pricing, check out Medicare’s Provider Utilization and Payment Data for inpatient stays.

For patients who pay cash, a growing number of online pricing tools, such as Healthcare Bluebook, Pratter, ClearHealthCosts, and FAIR Health, are available to determine and compare costs for outpatient hospital procedures in your zip code (see appendix A).

For drugs, it will depend on whether the medication is included in your plan’s approved formulary (meaning the plan has a contract with the drugmaker) and whether your insurer regards it as a basic drug to be widely dispensed or a specialty drug to be sparingly used. Profit is often the primary metric, so the tiers are based not on medical need but on the contracted price.

the VA’s ten-year-old MOVE! Weight Management Program, which provides counseling and exercise programs for patients with obesity and type 2 diabetes; it is by far the largest medical program of its kind in the United States. Every

In many European countries, medicines like asthma inhalers and insulin are free because their use prevents serious diseases that lead to expensive hospitalizations and long-term complications. For-profit insurers may not care about cost considerations down the road, because people can change their plans from year to year,

For example, a drug that represents a genuine medical breakthrough could be rewarded with a prolonged period of market exclusivity, while a replica drug or a modification that merely offers greater convenience, such as a once-a-day formulation, could be granted shorter periods. Drugs judged to offer no significant benefit to patients (a chewable birth control pill?) could receive no market protection at all.

The pharmaceutical companies’ predatory pricing of essential drugs and corporate relocation overseas to avoid U.S. taxes have betrayed our trust. We should negotiate.

If Medicare was able to negotiate reasonable prices on behalf of Americans in a similar way, commercial insurers could simply follow their payment guidance, getting rid of the many layers of middlemen and inefficient one-on-one corporate wrangling that drive up prices for American patients.

The theory behind the provision is that valuable treatments should not be rejected just because they are costly. But it has also meant that we don’t know the prices or have cost-effectiveness data on any treatment, even those that have little or no medical worth at all.

In 2015 a respected Boston nonprofit research group called the Institute for Clinical and Economic Review initiated a new “Emerging Therapy and Pricing” program to compare the effectiveness of drugs and set a value-based benchmark for their price tag in the United States.

“Ignoring the cost of care . . . is no longer tenable,” the doctors wrote in an editorial explaining their decision. “When choosing treatments for a patient, we have to consider the financial strains they may cause alongside the benefits they might deliver.”

It was an isolated but exemplary action that should be emulated by doctors, hospitals, medical societies, and disease research charities. The leadership of these organizations can pressure drug companies to deliver value and reduce prices; after all, if doctors don’t prescribe treatments they consider overpriced, there is no market.

A universal, national program supported by taxpayer money might make more sense. All that information could be placed on a chip card to carry in a wallet, which could be scanned by each new provider.

It is our health, the future of our children and our nation. High-priced healthcare is America’s sickness and we are all paying, being robbed. When the medical industry presents us with the false choice of your money or your life, it’s time for us all to take a stand for the latter.

.” In passing Obamacare, the Democrats tried to ignore the math in order to promise decent health insurance to every American, which ultimately necessitated some skyrocketing premiums and higher deductibles. First-time insurance for many, to be sure. But unsupportable costs for others.