This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.
Coming up with “A Bitter Pill”
By Steven Brill
Reuters, March 5, 2013
For the past 10 days I’ve been interviewed on various television and radio shows about the article I wrote for the March 4 issue of Time, called “A Bitter Pill.” It’s all about how exorbitant prices and profits are at the core of the crisis America uniquely faces when it comes to financing healthcare, the cost of which now accounts for roughly a fifth of our gross domestic product.
Invariably a question has come up in these interviews about how I thought of that approach. So, since this is supposed to be a column about good story ideas, I think I’ll use it to explain the genesis of “A Bitter Pill” in more detail than I’ve been able to on the talk show circuit.
During the long debate over President Barack Obama’s health insurance reform proposals, a question kept nagging at me: Everyone on all sides seemed to accept as a given that healthcare was wildly expensive, and the only debate seemed to be over who should pay for it. I wondered: Well, why is it so expensive in the first place?
I had no idea what the answers were. But it seemed obvious that there was only one way to find out: If you want to know why something is so expensive, figure out every element of its costs. In other words, follow the money.
As those who have read the article or heard about it now know, I found that all my initial suspicions were wrong. By following the money, I discovered that our healthcare prices are out of whack for a reason that was hiding in plain sight — a reason that should be obvious to anyone who has ever been a healthcare consumer, which means all of us: There is no such thing as a free market in healthcare, if one defines a free market as a place where there is some balance of power between the buyer and the seller. Instead, healthcare is – except when Medicare is the buyer – a lopsided seller’s market. That became clear at both ends of the money trails I followed – from the patients’ lack of any knowledge of what they were buying or its prices, much less any leverage to bargain over it, to the sellers’ ability and willingness to charge absurdly high prices on everything from gauze pads to ambulance services to cancer wonder drugs.
In other words, everyone along the supply chain – from hospital administrators (who enjoy multimillion-dollar salaries) to the salesmen, executives and shareholders of drug and equipment makers ‑ was reaping a bonanza. The only exceptions, I found, were those actually treating the patients ‑ the nurses and doctors (unless the doctors were gaming the system by reaping consulting fees from drug or device makers or setting up diagnostic clinics in their practices in order to steer patients there for expensive tests).
These excepts from Steven Brill’s explanation of how he came to write “Bitter Pill,” his TIME special report on exorbitant prices and profits in U.S. health care, reveal that there are two elements that come out untarnished: 1) most of the doctors and nurses actually treating the patients, and 2) Medicare.
The first point is very reassuring, but the second point should be a call to action. As Brill writes, “healthcare is – except when Medicare is the buyer – a lopsided seller’s market.” We really do need to make Medicare, in an improved version, a buyer for all of us.
For those who have not yet read the 36 page report, “Bitter Pill,” it can be downloaded at the following link. The point to glean from the article is how well Medicare works, which should lead you to the conclusion that we need an improved Medicare for all of us, as opposed to merely accepting the relatively ineffectual tweaks that he suggests at the end of the article.
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