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Paul Buchheit
NationofChange / Op-Ed
Published: Monday 4 March 2013
From personal stories and some additional facts to complement them, it’s clear that an essential human need has been turned into a product that benefits a few people at the expense of many others.

Horror Care: How Private Health Care is Shortening Our Lives

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Steven Brill's article in Time Magazine about the cost of private health care is likely to make most of his readers very angry. Angry about the prices we pay, about the lives that are devastated, and about the fact that we're one of the few developed countries without adequate health care for its citizens.

Economists have told us that the profit motive of privatization comes with an "invisible hand" that automatically corrects inequities in the market. It hasn't worked that way for health care. The personal stories recounted below, and some additional facts to complement them, make it clear that an essential human need has been turned into a product that benefits a few people at the expense of many others.

$15,000 for Blood Tests

Brill's article begins with the story of a 42-year-old Ohio man named Sean Recchi, who traveled to MD Anderson Cancer Center in Houston for treatment of non-Hodgkin's lymphoma. He and his wife Stephanie had paid $469 a month, or about 20% of their income, for insurance that covered $2,000 per day of hospital costs. His financial troubles started when MD Anderson told him, "We don't take that kind of discount insurance."

But he had to go to the hospital. His wife recalled that he was "sweating and shaking with chills and pains. He had a large mass in his chest that was..growing. He was panicked."

Stephanie asked her mother to write a check for $48,900.

Sean waited for 90 minutes while the hospital confirmed that the check had cleared. He was also required to advance MD Anderson $7,500 from his credit card. The total cost for the initial treatment and chemotherapy was $83,900, including a $15,000 charge for lab tests for which a Medicare patient would have paid a few hundred dollars, $283 for an x-ray that Medicare categorizes as a $20 charge, and $1.50 for a generic version of a Tylenol pill.

Hospital Boss $1,845,000 -- Medicare Boss $170,000

MD Anderson provided this statement in its defense: "The issues related to health care finance are complex...[our] billing and collection practices are similar to those of other major hospitals and academic medical centers." The company made $531 million in profits in 2010, on total revenues of about $2 billion. That 26 percent profit margin was, in the author's words, "an astounding result for such a service-intensive enterprise."

It's true. A PayUpNow.org analysis of Medical Services providers showed that from 2008 to 2010, Humana had a profit margin of about 5%, United Health Group just under 7 percent, and WellPoint about 8 percent.

Last year's salary for Ronald DePinho, the president of MD Anderson, was $1,845,000. That's over twice the compensation paid to the president of the University of Texas medical complex that includes MD Anderson. It's about ten times the compensation of the federal Medicare Administrator in 2010.

Privatization Has Failed Us: The Deadly Facts

Our private health care system has indeed failed us. We have by far the most expensive system in the developed world. The cost of common surgeries is anywhere from three to ten times higher in the U.S. than in Great Britain, Canada, France, or Germany.

Everyone has their hand in the money pot: insurance companies, pharmaceutical firms, physicians, hospitals, equipment suppliers, the AMA. Steven Brill notes that the medical industry has spent $5.36 billion on lobbying in the past 15 years, compared to $1.53 billion spent by the defense/aerospace industry and $1.3 billion spent by oil and gas interests.

As reported by the Census Department, 50 million Americans can't afford the price of health insurance. According to a study by the American Journal of Public Health, nearly 45,000 annual deaths are associated with lack of health insurance. A 2001 survey revealed that, because of cost, forty-two percent of sick Americans skipped doctor's visits and/or medication purchases. Even careseekers with insurance can end up uncovered, as in California, where a survey found that one out of four claims were denied by private insurers, even when treatment was recommended by the patient's physician. The after-effects can be disastrous. A 2007 study at the Harvard Medical School found that 62 percent of US bankruptcies were a result of medical expenses.

Meanwhile, the evidence for incompetence in the private sector is overwhelming. Data from the Congressional Budget Office (CBO) and the Center for Medicare and Medicaid Services (CMS) shows that since 1997 private insurance costs have risen much faster than Medicare costs. According to the Council for Affordable Health Insurance, medical administrative costs as a percentage of claims are about three times higher for private insurance than for Medicare. A study by researchers at Harvard Medical School and Public Citizen found that health care bureaucracy last year cost the United States $399.4 billion. The U.S. Institute of Medicine reports that the for-profit system wastes $750 billion a year on waste, fraud, and inefficiency. As a percent of GDP, we spend almost twice the OECD average.

Private Health Care Has Shortened Our Lives

When we look beyond industry malfeasance to the effects on human life, we find that Americans are paying the ultimate price. We now have a shorter life expectancy than almost all other developed countries. A National Research Council study placed the United States LAST among 17 high-income countries.

It wasn't always this way. Since 1960 there has been a close parallel between worsening life expectancy and increased health care costs as a percentage of GDP. Most disturbing is our growing infant mortality rate relative to other countries. A UNICEF study places the U.S. 22nd out of 24 OECD countries in "children's health and well-being."

In startling contrast, Americans covered by Medicare INCREASED their life expectancy by 3.5 years from the 1960s to the turn of the century.

Another Horror Story

Janice S., a 64-year-old woman in Connecticut, was rushed to the hospital in what turned out to be heartburn. She was charged $995 for the ambulance ride, $3,000 for the doctors, and $17,000 for the hospital - $21,000 for a three-hour precautionary checkup.

Part of the hospital bill was a special stress test, employing radioactive dye and a CT scan, which cost $7,997.54, about six times more than the hospital's regular stress test. Medicare would have paid the hospital $554 for the special test.

For many of the lab tests, Janice was charged about ten to fifteen times more than the Congress-supervised Medicare rate. The hospital's own filings to the Department of Health and Human Services showed that lab tests in 2010 brought in $293 million from patients, while costing the hospital just $28 million.

When confronted with the details, a hospital spokesperson said, "Those are not our real rates..It's a list we use internally in certain cases, but most people never pay those prices."

And More..

Emilia Gilbert was 62 when she fell at home and bloodied her face, spent six hours (most of it waiting) at the at the Bridgeport, CT Hospital emergency room, and received a bill for over $9,000. She even got charged for bandages and tubing, which are supposed to be part of the $900 emergency room charge. The hospital sued her for the money.

Steve H. went to Mercy Hospital in Oklahoma City for back treatment. He had $45,181 remaining on the $60,000 annual payout limit from his union's health insurance plan. For basic medical and surgical supplies he was billed about $8,000, including charges for a surgical gown, a blanket warmer and a marking pen. The most significant cost was the Medtronic stimulator that was implanted in his back, which cost the hospital $19,000, but cost Steve almost $50,000. His total bill at the institution run by the Sisters of Mercy ended up at nearly $87,000.

Steven D. (a pseudonym) was diagnosed with lung cancer in January 2011. When he died eleven months later, his wife Alice was left with a bill for over $900,000.

Many of the patients, or their family members, interviewed by Mr. Brill took advantage of a growing industry called medical billing advocacy, by which outlandish bill totals can be negotiated downward. The initial hospital bill is apparently an attempt by the hospital to get all they can from a patient. Steven D's $900,000 bill for cancer treatment was dramatically reduced, to about $170,000, but Alice was forced to literally sell the family farm to pay off most of her debt.

Human Need as a Product For Sale

An underlying theme through the Brill article was the vulnerability of patient's spouses or other relatives, who were not in the appropriate state of mind to challenge, or even consider, the excessive costs of treatment. As the wife of a terminally ill patient stated, "Are you kidding? I'm dealing with a husband who had just been told he has Stage IV cancer. That's all I can focus on...You think I looked at the items on the bills? I just looked at the total."

By treating the essential human need of health care as a product, the hospitals and doctors and drug companies and insurance companies and equipment suppliers are lured toward a pot of money, with little regard for the effects of their profit-making on average Americans.

The solution, of course, is Medicare for all. If, that is, the invisible hand of the market ever reaches out to average Americans.



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ABOUT Paul Buchheit

Paul Buchheit is a college teacher with formal training in language development and cognitive science. He is the founder and developer of social justice and educational websites (UsAgainstGreed.org, RappingHistory.org, PayUpNow.org), and the editor and main author of "American Wars: Illusions and Realities" (Clarity Press). He can be reached at paul@UsAgainstGreed.org.

The economics of health care

The economics of health care are irrational. The prices are inflated far beyond other items we use or produce. Look at an itemized hospital bill and wonder. Each pill, from aspirin to a prescription drug is billed at $10-40. A tiny high tech stent is billed at $17000. Where do they get these prices? If a medicine "costs" $40 per pill and that "cost" is reduced to a few cents so an ordinary person can afford to take one pill a day, the people making those "adjustments" are acting insanely. The costs and the prices have no relationship to the real world.

So my question is this. Why

So my question is this. Why do so many hospitals seem to be losing money, especially on Medicare patients? See http://articles.latimes.com/2009/mar/02/business/fi-hospitals2 and http://www.forbes.com/sites/aroy/2011/09/21/medpac-64-of-hospitals-lose-...

Hospitals are losing money

Hospitals are losing money (and indeed we're at risk of losing a lot of rural hospitals on account of it) currently due to the sizable of chunk of free care they have to provide and to the deep discounts demanded by the health insurance companies (lower than Medicare). The anticipated further discounts by Medicare is based on the assumption that the states will extend their Medicaid programs. Woe to those unfortunate hospitals in states with Republican governors and legislatures who have decided to stiff their near-poor citizens just to oppose Obamacare.

Some words that should never

Some words that should never be paired together - for-profit & hospital, medical & industry. When we let the terms for-profit & industry into our discussion of health care, we removed humaneness & charity. To quote Albert Schweitzer, "Reverence for life, life of all kinds, is the first principle of civilization." If there is truly an entitlement in a civilized society, it is adequate health care that doesn't bankrupt the patient. In our current medical system, we value profit over life. In my view, we are no longer a civilized society.

Why has the nation been

Why has the nation been hampered in an attempt to reform the health care system?

Because of something we used to call influence peddling. It now amounts to legalized bribery.

The powerful wealthy insurance industry, pharmaceutical industry and for profit health care services industry have gamed the system by taking control of the media and information system. For 30 years this misinformation system has rendered the American people utterly stupid. But somehow the supreme court thought corporations just didn't have enough influence.

While we fought two unnecessary overseas wars, the real enemy was right here in this country destroying our future.

Ronald DePinho, the president

Ronald DePinho, the president of MD Anderson is a perfect example of what is wrong with the American health care system. He probably believes he is worth that much.

Free Med school for all

Free Med school for all qualified applicants making the grade. We need doctors and nurses passionate about healing. Not businessmen concerned only with profiting from human suffering.
The examples stated in this article amount to nothing more than crimes against humanity. The wall street doctors and wall street hospitals are the real terrorists holding our lives hostage for ransom and leaving us to die suffering deaths when the ransom can't be paid..

This article looks like

This article looks like lectures I gave in the 1970's and beyond! What's new in the world? As many are aware, our health care system is has become a business/industrial model, controlled by the insurance, hospital, and big pharma corporations. We need to develop a public health model focusing on a continuum of care levels, with unified and equal access and payment for all health care. The proposed and present trajectory will lead to people delaying or failing to seel health care until they are sicker and coming into care later, leading to much high costs. We need to focus more on preventive/wellness health, and early case-finding and care. Perhaps the U.S. will see the light and join the rest of the industrialized world some day. But until our for-profit insurance companies and their 7-8 K Street lobbyists per legislator are reigned in by an informed public, the same lectures will be repeated to no avail. Equal health care for all! The Affordable Health Care Act is a mere baby step!

Why do I feel as though the

Why do I feel as though the "magic hand" of the market is grasping me by the testicles? I'm waiting to be told to cough, but it never comes.

This outrage has been going

This outrage has been going on for 50 years at least! A good friend of my mother's passed away in the late '60s, and his wife got the final bill reduced by 75% by questioning any charges she didn't 'understand' following legal advice. She simply asked that everything be itemized...

jim of olym

"What a revoltin' development

"What a revoltin' development this is." Jimmy Durante. The jesters always get it right.

The whole system is an f'ing

The whole system is an f'ing outrage. The problem is most Americans, unless they are working with or in the system, do not understand its failures. And $1.75 mil for top dog at MD Anderson? C'mon, give me a break ...!

And to think Obama Care would

And to think Obama Care would force us to pay into this system to prop it up or pay a tax. Thousands of uninsured such as myself who pay directly for their health care - and for many things that insurance won't cover, such as healthy foods, supplements, alternative health practitioners, and even medical marijuana - are likely to suffer a reduced quality of life if we pay. The only "affordable" health care will come with a large deductible, so we would have to pay for the insurance and our regular expenses without any added benefit. I hope many simple refuse and a large tax resister movement will grow.

We Need a Single-Payer Health

We Need a Single-Payer Health Care Plan.

And the easiest way would be

And the easiest way would be to go to France and copy the best state operated health care system in the world. The constant tinkering with the current system which is what is currently done merely magnifies its faults and ignores its obvious unfilled needs.

We need a unique payer system

We need a unique payer system ASAP.
Obama should force it if necessary
We have to take republicans out of office in middle term elections.

Taking Republicans out of

Taking Republicans out of office, while useful, will not get us single payer, because the Democrats are ALSO on the take from the insurance, medical, and pharmaceutical corporations.

Early in the Obama Administration, there was a conference at the White House to explore "all" the alternatives for health care. When doctors representing single-payer showed up, THEY WERE ARRESTED!

THAT'S what Obama and the Democrats think of single-payer health care for Americans!

Yet another reason I vote Green Party; the Green Party has been calling for single-payer health care from the beginning.

Don't spread mistruth. Those

Don't spread mistruth. Those single-payer players were Democrats and they were physicians, but the Republicans had fixed the game and left President no option.

Exactly. Obama lied right to

Exactly.

Obama lied right to our face by saying, "Single payer would be too expensive."

He knew that wasn't true but he was essentially an insurance industry employee at that point. Yes, Republicans are worse, but many Democrats have sold their integrity to the insurance industry and the pharmaceutical industry.

I suggest that all Democrats call the President out on his duplicity. Tell him we did not want a Republican when we voted for him. Tell him to act like a Democrat, a real Democrat.

And don't forget the Journal

And don't forget the Journal of the American Medical Association article that found that receiving medical care was the third leading cause of death in America, after heart disease and cancer. Most of the deaths were not errors - they were from side effects of properly prescribed and administered drugs!

Maternity care is particularly insane. We're inducing early, using huge numbers of unnecessary, costly, and often destructive interventions, and ending up cutting out a third of all babies by C-section. Strangely, a hugely disproportionate number of "emergency" C-sections appear to occur between 8-5, Monday through Friday.

We have set up a perverse incentive system, where incompetence and greed are rewarded, and good medical care is punished. Something major's got to change, or our healthcare system will end up killing us all!

--- Steve

The denial of single-payer

The denial of single-payer health care to Americans is BIPARTISAN.

Yet another reason I vote Green Party.

You would be wrong in your

You would be wrong in your assumption both that we physicians are not pushing for better health care and putting the patient first, and that Democrats are not supportive of Single Payer Healthcare. Let's put the blame where it belongs: the reason SPH was excluded from forums leading up to the ACA was due to the demand by Republicans that SPH be removed from consideration or they would not even come to the table. Single Payer Healthcare is one of the tenets of progressivism. Reality can be painful, but at least we started something

"By treating the essential

"By treating the essential human need of health care as a product, the hospitals and doctors and drug companies and insurance companies and equipment suppliers are lured toward a pot of money, with little regard for the effects of their profit-making on average Americans."

That's why the entire industrialized world has REJECTED anything resembling the U.S. For-Profit Corporate Capitalist Sick Care money machine...

They've decided that Human Health is NOT a commodity but rather a basic Right and rightly determined that the profit motive is counter-productive to the provision of Care...

And Medicare for All is just

And Medicare for All is just the beginning.

The deviant nature of the U.S. flavor of For-Profit Corporate Sick Care has also infected the practice of "medicine" in this country from the medical and nursing schools through the corporate hospital towers and nursing homes (for those who can afford them) to the morgue.

The entire paradigm of U.S. Sick Care is to treat the "health care" CONSUMER like a piece of meat to be fixed by a priesthood of myopic practitioners of mechanical solutions with the main goal of creating increasing, short-term, quarterly profits for the corporations involved...or ELSE!

For those of us lucky enough to have experienced HEALTH CARE in a single-payer country -- where the medical staff is part of your TEAM dedicated to restoring you to your natural state of health -- NO MONEY ISSUES INVOLVED, the continued attempts to prop up the failed U.S. system is obscene (and deadly to your Health) at every level.

You either have no idea what

You either have no idea what you are talking about, or you are guilty of generalized slandering as practiced by the Republican Noise Machine. We have a lot of problems with our health care system, but blanket condemnation of participants is ridiculous and intellectually dishonest. Be constructive, not destructive.

ChetDude's MO is "generalized

ChetDude's MO is "generalized slandering," ala the Reich Wing's Noise Machine.

But... he ALSO has no idea what he's talking about. A real gem, this one...

This is a consequence of the

This is a consequence of the law that requires stockholders to come first, and not the employees or consumers.

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