Excerpt: “Why Medical Bills Are Killing Us”

The American health care system dominates the nation’s economy and puts demands on taxpayers to a degree unequaled anywhere else on earth...

  • Share
  • Read Later
Nick Veasey for TIME

Below is an excerpt of Steve Brill’s Special Report for TIME.  Sean Recchi is a 42-Year-Old from Lancaster, Ohio, who was told last March that he had non-Hodgkin’s lymphoma.

I got the idea for this article when I was visiting Rice University last year.  As I was leaving the campus, which is just outside the central business district of Houston, I noticed a group of glass skyscrapers about a mile away lighting up the evening sky. The scene looked like Dubai. I was looking at the Texas Medical Center, a nearly 1,300-acre, 280-building complex of hospitals and related medial facilities, of which MD Anderson is the lead brand name. Medicine had obviously become a huge business. (In fact, of Houston’s top 10 employers, five are hospitals, including MD Anderson with 19,000 employees; three, led by ExxonMobil with 14,000 employees, are energy companies.) How did that happen? I wondered.  Where’s all that money coming from? And where is it going? I have spent the past seven months trying to figure out by analyzing a variety of bills from hospitals like MD Anderson, doctors, drug companies and every other player in the American health care ecosystem.

When you look behind the bills that Sean Recchi and other patients receive, you see nothing rational-no rhyme or reason- about the costs they face in a marketplace they entered through no choice of their own. The only constant is the sticker shock for the patients who are asked to pay.

Yet those who work in the health care industry and those who argue over health care policy seem inured to the shock.  When we debate health care policy in America, we seem to jump right to the issue of who should pay the bills, blowing past what should be the first question: Why exactly are the bills so high?

What are the reasons, good or bad, that cancer means a half-million- or million-dollar tab? Why should a trip to the emergency room for chest pains that turn out to be indigestion bring a bill that can exceed the cost of a semester at college? What makes a single dose of even the most wonderful wonder drug cost thousands of dollars? Why does simple lab work done during a few days in a hospital cost more than a car? And what is so different about the medical ecosystem that causes technology advances to drive bills up instead of down?

The result is a uniquely American gold rush for those who provide everything from wonder drugs to canes to high-tech implants to CT scans to hospital bill-coding and collection services. In hundreds of small and midsize cities across the country- from Stamford Conn., to Marlton, N.J., to Oklahoma City- the American health care market has transformed tax-exempt “nonprofit” hospitals into the towns’ most profitable businesses and largest employers, often presided over by the regions’ most richly compensated executives. And in our largest cities, the system offers lavish paychecks even to second-tier hospital managers, like the 14 administrators at New York City’s Memorial Sloan-Kettering Cancer Center who are paid over $500,000 a year, including six who make over a $1 million.

Taken as a whole, these powerful institutions and the bills they churn out dominate the nation’s economy and put demands on taxpayers to a degree unequaled anywhere else on earth. We now spend almost 20% of our gross domestic product on health care, compared with about half that in most developed countries. Yet in every measurable way, the results our health care system produces are no better and often worse than the outcomes in those countries.

UPDATE: TIME Managing Editor Richard Stengel responds to Steven Brill’s special report on Morning Joe:

33 comments
Jimmie
Jimmie

This hits home with me...back in 2008 I had a head on car accident and was relieved of my job due to that and then worked part -time until quite recently.  However I could only afford a $10K deductible medical policy with a small total payout.  So I stayed away from doctors.  Had I had decent insurance, I may have been able to avoid the osetoarthritis that I've ended up with from the accident and Lyme.  It's only recently that I've been able to see physicians other than once in a great while visits for pain medicine due to getting a fulltime job (thank God).  My mom had alzheimers and I was so thankful that she had medicare to take of her.  Unfortunately people, myself included, have fallen through the medical cracks in the floor.  (It's also sort of ironic that I worked as a volunteer EMT and could not even afford medical care for injuries on the job once I became unemployed - just licked my wounds and got back to work.)  The US needs a good single-payer health care system that makes medicine humanely affordable.  Several presidents have tried this and we really need it.  We need some compassion.

rwhd55
rwhd55

Medicare pays $19.00- $35.00 for the rental of a Wheelchair, and they set the price and make the rules. They pay 80% of the rental for 13 months then the wheelchair becomes patient owned or it is returned. I can bill Medicare 5 million and they only allow the set price. If Medicare is paying hundreds per month, it must be a power wheelchair, and it to becomes patient owned, once it meets Medicare set price. Sorry to take the wind out of your sale, but these are the facts. You can check on the Medicare website for allowed charges.  

LyndaSkowronski
LyndaSkowronski

We should not be cutting Medicare benefits for the elderly.  We should be cutting payments to vendors charging Medicare ridiculous amounts for things that cost a fraction of that.  PLEASE CHECK into wheelchair charges.  I have been writing to various people in Conress about this.  When the elderly leave a physical rehab after a stay for knee surgery etc. they are often sent home with a wheelchair instead of just asking a family member to purchase one.  THIS IS A RENT TO OWN SCAM.  Places like Orbit Medical Supply in the Midwest will bill Medicare hundreds of dollars each month.  I checked Medicare statements of a family friend that this happened to.  On the back of the Medicare statement it tells you that these are charges that will be sent to Medicare for 13 months, at which time the chair belongs to you.  13 MONTHS!  The chair should be made of gold.  Multiply these payments by the hundreds of thousands of people that this happens to.  I know the Scooter Store is being investigated, but how about the other vendors like Orbit?


chychychow
chychychow

I was going to take my 11 year old to emergency when he was moaning from a 102 F fever.  I got scared when he did not respond to me, his eyes partially opened, his whole body went limp and called 911.  By the time the arrive (5 mins later)  he was awake but still disoriented.  Just to be safe, they decide to take him to get check out. He was able to obey instructions by the time he got on the strtcher.  He got what described as the funnest ride of his life being in a cool ambulance.  That 5 min visit and 5 min/2 mile ride  cost me $1350.  1 hour ER visit which was mostly registering and waiting time cost $2975. ER Physician bill $290.  Next time what should I do?

ChrisWiegel
ChrisWiegel

The stories in this article disgust me and I'm not sure Obamacare will deal with all the financial hardships that come with illness in America today. To help, I have created a petition on the White House site to limit the amount hospitals/clinics/doctors can charge to no more than triple the Medicare reimbursement amount. If a provider accepts Medicare patients, they would have to abide by the limit. If they don't they can charge as much as they want but have to disclose what they charge. If you like this idea, please go to the White House site and sign my petition at http://wh.gov/wP6U

MarkShiker
MarkShiker

It's difficult to swallow the tired old cry-out against medical malpractice insursance and lawyers being "the" issue in medical costs, when the U.S. National Academies of Science, Institute of Medicine (IOM) produces two seminal reports that illuminate the fact that more than 98,000 deaths occurr within the medical system due to medical error.  That means these 98,000 people are slaughtered with a simple "Oopsie" - my bad!

Mind you, if each of these doctors/nurses were as permantly fired as those patients were permantly killed, then we could talk.  But so long as the 'system' keeps these folks in "practice" - I say sue them blind for everything they have.

HelpUsHelpOurselves
HelpUsHelpOurselves

Awesome article.  The only thing I take exception to is the insinuation that medical malpractice rates are too high or a big problem, which I would submit is another area that deserves closer attention.  As someone with a rare medical condition, who regularly does background checks on doctors, one of which probably saved my life, I can tell you that the quality of our doctors also leaves room for improvement.  Please do an expose on medical malpractice.  The facts might change our world, much like this article. 

P.S.  I'm on medicare, and I pay over $600.00 per month and don't have full coverage.  


StrategicPlanet
StrategicPlanet

@sheilasturgeon thanks for this, it is very interesting.

AllanSOxman
AllanSOxman

The article is frightening. The local hospital (not for profit) in Charlotte just posted incomes for their administrators. The President/CEO made in excess of $4,000,000 with others making incrementally less. The billing issues noted in the article are because the patient did not have insurance and there were no pre-negotiated prices as there are in Medicare or other health insurance. He was charged "full retail". He may have been able to join a PPO for discount purposes only (no insurance) but a pre-negotiated discount. With the new healthcare act(Obamacare)  bringing in 35,000,000 more people and no more doctors, I suspect that the quality of care will go down and the cost of care will go up...it is simple supply & demand. the health care system is out of control and I see no way to rein it in for the near future. Best advice is to try and stay healthy, but with our fast food economy that is easier said than done. 

Ohiolib
Ohiolib

It's quite simple. Either you pay the bills, or you die early (possibly very early). Competition doesn't exist in any meaningful way. Between patents on so many drugs, an inability for people to pay the bills themselves (you go where you're covered), the fact that you're effectively forced to purchase, and high profits for insurance companies (who don't actually affect the quality or type of care you receive) there is no way for the free market to effectively sell health care anymore. And god forbid the government should do anything. That's socialism!!

formerlyjames
formerlyjames

I haven't read the full article yet, but one thing I would like to know more about is the so called tourist health industry, Americans going elsewhere for care at reasonable cost and making a vacation out of it.  The American health care industry is sure no picnic.  Cuba is a leader in health care and education, and when the stupid sanctions are removed, I will bet it will be a destination for health care.  

allcows
allcows

This is one of the most critical issues we face in this country yet there is only 10 comments.  If this was about guns there would be thousands.  During the ACA "debate" it amazed and disgusted me how Montana senator Max Baucus sold out any discussion about universal coverage to the health insurance industry that so effectively purchased him.  

Ivy_B
Ivy_B

Also would love to hear Joe Klein after he has read it. Don't think he will be able to do his usual fuss about Medicare. Wonder if he will write about it.

Ivy_B
Ivy_B

I'm looking forward to reading the whole article. I heard Rick Stengal talking about this on Morning Joe while I was at the gym this morning. He actually came out and said that Medicare was far more efficient because it couldn't pay more than 6% above actual cost and instead of looking for ways to cut Medicare, lawmakers would do better to look to allowing younger people to buy into Medicare.

The mark-up on drugs and procedures is outrageous - as 53 says below, comparable to the worst of the MIC of the old days. I remember in the days of the ACA debate that many of us kept saying we wanted Medicare for all. Stengal also blamed Congress for giving in to hospital and health care lobbyists for the fact that the ACA won't do much to bend the cost curve.

fitty_three
fitty_three

Beautiful article, but as I alluded to with another commenter yesterday, the health care industry has borrowed everything bad from the military-industrial complex's $900 hammer days in the '70s and '80s and combined it with the knowledge that the taxpayer is a captive market.

You see, we just supply a small amount of the grease that turns this shambling cartwheel of corruption by commercial interests.  The moneymakers don't really need our contributions - they're tiny and don't even make a dent, even with our premium payments and residuals and co-pays.  It's the insurance companies who fork the money over in vast streams that are themselves fed by their increased demands on the government to supply them with money to keep this carousel going.  

The government, far from being the only cause, is obligated to pay these funds, (the Medicare "fix" adjusted this input stream).

Yup, take it from me, who has cared for my wife now for two years, and ran up $2,388,000 in medical bills since Feb 23, 2010, the day she was admitted.  We make $50k / year and pay out some $15,000 in medical expenses now.  Hell, I'm even in a program (Home Health Care) that has saved the government some $700,000 since last April, but:

I'm a little guy walking amongst the giant pigs of free enterprise.


MrObvious
MrObvious

Excellent questions. I would love for our media to dig deep into this sector who have turned the idea of saving lives into a fountain of gold. I and my wife sometimes bemuse ourselves by listening to the side effects of some drugs and I wonder how our FDA can allow these drugs to be sold? An arthritis medicine with strokes and cancer as side effect? And it's allowed to be sold? What vital form of arthritis medicine can be allowed to be sold where there's even a chance for a much more fatal side effect?

And while I feel like choking every time I see the medical bill from larger hospitals compared to the one from my local doctor I wonder if we're not fooled into thinking that any price is good enough as long as we pretend that screening for simple things that takes 15 minutes is worth the many thousands of dollars charged to our insurance companies.

notsacredh
notsacredh

"We now spend almost 20% of our gross domestic product on health care, compared with about half that in most developed countries. Yet in every measurable way, the results our health care system produces are no better and often worse than the outcomes in those countries."

We're getting ripped off because our system is a "for profit" system. We have to keep the share holders happy.

rwhd55
rwhd55

Lynda, Please read my above coments.

R.Braskett
R.Braskett

@MarkShiker This approach is like cutting off your Nose to spite your Face;  it further raises the cost of medical care and is a scapegoat just like medical malpractice is among doctors & republicans.  The answer is prevent most of these errors .  Go to Germany or Canada--both rich countries with good medical systems; compare their medical death problem and REMEMBER that both spend 11% of GDP while WE spend 20% of GDP!!!

R.Braskett
R.Braskett

@AllanSOxman 

The studies required by ObamaCare could help, if our Corrupt Congress will put their recommendations into practice.  Send a crew of experts to Germany & Canada, both rich countries spending 11% of GDP.  Find out how they control procedures & costs, both countries have better outcomes & life expectancy than we do.  Note: I did not say Great Britian as they have a cheap system with  Brightline barriers to expensive treatments at certain ages.

doddeb
doddeb

Ivy_B:  it's available now on line if you subscribe.  Tried to post the link and some money quotes, but that got eaten by the moderation gods.  Have to say, its the single best piece of journalism I've seen from Time, in ages.  This is what investigative journalism looks like and we see it too rarely these days.  This kind of reportage, in a weekly like Time, would have been invaluable during the time when ACA was being debated. 

La_Randy
La_Randy

@Ivy_B Heard Stengal this morning also. He kind of interrupted Joe starting into his free market solutions diatribe. Rich!

tommyudo
tommyudo

@sacredh 

As long as we have a for profit system where  our health, and those of our loved ones, is only another commodity, like a grocery store product, nothing will change. The Right Wing in DC and the health industry lobbyists can yell "socialism" all they want, but until the citizenry get off their fat backsides and clamor for a universal system, and elect pols who support it, there won't be any major changes. What we need are about 100 senators and 435 members of Congress who think like Bernie Sanders.

The present system can't be sustained, yet the lack of comments in this thread is another way of saying "go somewhere else to die." People meekly accept the current situation. The next pol who tells you "we can't afford universal healthcare", just tell them to "shove it and get out of the way".


MrObvious
MrObvious

@sacredh 

Contemplating the idea of thinking we're getting ripped off is socialistic.

Ivy_B
Ivy_B

@doddeb I actually subscribe, but prefer to read things like this in print, so will wait until the dead tree edition arrives. I subscribed some time ago because I have used Swampland so much over the years, I thought I should pay something toward it. That said, I will download to my iPad now!

Sue_N
Sue_N

@tommyudo @sacredh The arguments have always astounded and infuriated me. We can't afford universal health care or Medicare for all, but we can always afford the latest new weapons system or the latest war. Our priorities as a nation are insane.

doddeb
doddeb

formerlyjames:  Thanks, I can't always tell since I'm perpetually logged in as a subscriber.