Why the Medical-Industrial Complex Is Killing Us

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 medical 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 find 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.

Steven Brill,  “Bitter Pill: Why Medical Bills Are Killing Us,l “  Cover Story, Time Magazine, February 20, 2013

Frankly, I was astonished when I read Steven Brill’s article on the use and abuse of chargemaster accounts to bill patients in U.S. hospitals.  

• To begin with, the story is over 24,000 words long. That’s long enough for a book.
• Secondly, it is full of horror stories about patients being overbilled compared to Medicare rates. 
• Thirdly,  it is critical of hospital administrators,  who run multibillion institutions,  that are the major employers in many American cities. 
• Fourthly, there seems to be no accountability, no rhyme or reason, for the excessive bills and no attempts to fix them.
• Fifthly , it is   harsh in its criticism of America’s hospitals’ charges, a major driver of our health costs, which exceed  those of other nations by at least 27%.

Brill writes:

“When you crunch data compiled by McKinsey and other researchers, the big picture looks like this: We’re likely to spend $2.8 trillion this year on health care. That $2.8 trillion is likely to be $750 billion, or 27%, more than we would spend if we spent the same per capita as other developed countries, even after adjusting for the relatively high per capita income in the U.S. vs. those other countries. Of the total $2.8 trillion that will be spent on health care, about $800 billion will be paid by the federal government through the Medicare insurance program for the disabled and those 65 and older and the Medicaid program, which provides care for the poor. That $800 billion, which keeps rising far faster than inflation and the gross domestic product, is what’s driving the federal deficit. The other $2 trillion will be paid mostly by private health-insurance companies and individuals who have no insurance or who will pay some portion of the bills covered by their insurance. This is what’s increasingly burdening businesses that pay for their employees’ health insurance and forcing individuals to pay so much in out-of-pocket expenses.

Steven Brill
I asked myself – Who is  Steven Brill?

Here's what Wikipedia has to say.

“Steven Brill (born August 22, 1950 in Queens, New York)^] is the founder of CourtTV and American Lawyer magazine. His most recent venture is Journalism Online, which he sold to RR Donnelley in 2011 for a reported $45 million and now has more than 400 publications using its Press+ service to charge for digital content. He also founded Verified Identity Pass, Inc., a New York-based company that operated the Clear airport security fast-pass, a pre-cursor to the current Federal Trusted Traveler program. In 1998, Brill created Brill's Content, a widely-acclaimed magazine with a critical eye to the media. He also launched Contentville.com, which was to be a clearinghouse for the buying and selling of web text, news, and info of all sorts. In addition to writing a column for Newsweek, he has written magazine articles for The New Yorker, The New York Times Sunday Magazine, Harpers and TIME. He is the author of The Teamsters (1978), After: How America Confronted the September 12th Era (2003) and Class Warfare: Inside the Fight to Fix America's Schools (2011).

This is a very entrepreneurial guy who knows how to turn a buck.     

I have no criticism of his research which is well documented and based on  scrutiny of hospital bills.  Nor do I disagree with some of his conclusions – institute tort reform, outlaw chargemaster accounts, scrutinize and limit non-doctor executive incoms  or this concluding paragraph,

“Over the past few decades, we’ve enriched the labs, drug companies, medical device makers, hospital administrators and purveyors of CT scans, MRIs, canes and wheelchairs. Meanwhile, we’ve squeezed the doctors who don’t own their own clinics, don’t work as drug or device consultants or don’t otherwise game a system that is so gameable. And of course, we’ve squeezed everyone outside the system who gets stuck with the bills.

Tweet:  In any given city, hospitals are often the biggest business in town,  the largest employer, and the most profitable business enterprise.