Bitter Pill: Why Medical Bills Are Killing Us

[Junior]

Longform journalism alert: not for people interested in sound bites and political talking points. But a fascinating read, and something everyone SHOULD read.

 

 

Bitter Pill: Why Medical Bills Are Killing Us

http://healthland.ti.../#ixzz2M7DxFCeb

 

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 faced in a marketplace they enter through no choice of their own. The only constant is the sticker shock for the patients who are asked to pay.

 

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 of 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?

[Junior]

Sean Recchi wasn’t as fortunate. His bill — which included not only the aggressively marked-up charge of $13,702 for the Rituxan cancer drug but also the usual array of chargemaster fees for basics like generic Tylenol, blood tests and simple supplies — had one item not found on any other bill I examined: MD Anderson’s charge of $7 each for “ALCOHOL PREP PAD.” This is a little square of cotton used to apply alcohol to an injection. A box of 200 can be bought online for $1.91.

 

We have seen that to the extent that most hospital administrators defend such chargemaster rates at all, they maintain that they are just starting points for a negotiation. But patients don’t typically know they are in a negotiation when they enter the hospital, nor do hospitals let them know that. And in any case, at MD Anderson, the Recchis were made to pay every penny of the chargemaster bill up front because their insurance was deemed inadequate. That left Penne, the hospital spokeswoman, with only this defense for the most blatantly abusive charges for items like the alcohol squares: “It is difficult to compare a retail store charge for a common product with a cancer center that provides the item as part of its highly specialized and personalized care,” she wrote in an e-mail. Yet the hospital also charges for that “specialized and personalized” care through, among other items, its $1,791-a-day room charge.

 

Before MD Anderson marked up Recchi’s Rituxan to $13,702, the profit taking was equally aggressive, and equally routine, at the beginning of the supply chain — at the drug company. Rituxan is a prime product of Biogen Idec, a company with $5.5 billion in annual sales. Its CEO, George Scangos, was paid $11,331,441 in 2011, a 20% boost over his 2010 income. Rituxan is made and sold by Biogen Idec in partnership with Genentech, a South San Francisco–based biotechnology pioneer. Genentech brags about Rituxan on its website, as did Roche, Genentech’s $45 billion parent, in its latest annual report. And in an Investor Day presentation last September, Roche CEO Severin Schwann stressed that his company is able to keep prices and margins high because of its focus on “medically differentiated therapies.” Rituxan, a cancer wonder drug, certainly meets that test.

 

[Junior]

In December, when the New York Times ran a story about how a deficit deal might threaten hospital payments, Steven Safyer, chief executive of Montefiore Medical Center, a large nonprofit hospital system in the Bronx, complained, “There is no such thing as a cut to a provider that isn’t a cut to a beneficiary … This is not crying wolf.”

 

 

 

Actually, Safyer seems to be crying wolf to the tune of about $196.8 million, according to the hospital’s latest publicly available tax return. That was his hospital’s operating profit, according to its 2010 return. With $2.586 billion in revenue — of which 99.4% came from patient bills and 0.6% from fundraising events and other charitable contributions — Safyer’s business is more than six times as large as that of the Bronx’s most famous enterprise, the New York Yankees. Surely, without cutting services to beneficiaries, Safyer could cut what have to be some of the Bronx’s better non-Yankee salaries: his own, which was $4,065,000, or those of his chief financial officer ($3,243,000), his executive vice president ($2,220,000) or the head of his dental department ($1,798,000).

[Junior]

 

By the time Steven D. died at his home in Northern California the following November, he had lived for an additional 11 months. And Alice had collected bills totaling $902,452. The family’s first bill — for $348,000 — which arrived when Steven got home from the Seton Medical Center in Daly City, Calif., was full of all the usual chargemaster profit grabs: $18 each for 88 diabetes-test strips that Amazon sells in boxes of 50 for $27.85; $24 each for 19 niacin pills that are sold in drugstores for about a nickel apiece. There were also four boxes of sterile gauze pads for $77 each. None of that was considered part of what was provided in return for Seton’s facility charge for the intensive-care unit for two days at $13,225 a day, 12 days in the critical unit at $7,315 a day and one day in a standard room (all of which totaled $120,116 over 15 days). There was also $20,886 for CT scans and $24,251 for lab work.

[carlfense]

Thanks for posting it Junior. This article (and the follow up from Yglesias) has been a hot topic at the hospital.

 

Here's another good read from a few years ago by Atul Gwande:

http://www.newyorker...fa_fact_gawande

[Junior]

Oh yea, and the "Death Panels". Probably my favorite part:

 

Doctors and other health care reformers behind the comparative-effectiveness movement make a simple argument: Suppose that after exhaustive research, cancer drug A, which costs $300 a dose, is found to be just as effective as or more effective than drug B, which costs $3,000. Shouldn’t the person or entity paying the bill, e.g. Medicare, be able to decide that it will pay for drug A but not drug B? Not according to a law passed by Congress in 2003 that requires Medicare to reimburse patients (again, at average sales price plus 6%) for any cancer drug approved for use by the Food and Drug Administration. Most states require insurance companies to do the same thing.

...

With that escalating bill in mind, Bach was among the policy experts pushing for provisions in Obamacare to establish a Patient-Centered Outcomes Research Institute to expand comparative-effectiveness research efforts. Through painstaking research, doctors would try to determine the comparative effectiveness not only of drugs but also of procedures like CT scans.

However, after all the provisions spelling out elaborate research and review processes were embedded in the draft law, Congress jumped in and added eight provisions that restrict how the research can be used. The prime restriction: Findings shall “not be construed as mandates for practice guidelines, coverage recommendations, payment, or policy recommendations.”

With those 14 words, the work of Bach and his colleagues was undone. And costs remain unchecked.

 

Along with another doomed provision that would have allowed Medicare to pay a fee for doctors’ time spent counseling terminal patients on end-of-life care (but not on euthanasia), the Obama Administration’s push for comparative effectiveness is what brought opponents’ cries that the bill was creating “death panels.” Washington bureaucrats would now be dictating which drugs were worth giving to which patients and even which patients deserved to live or die, the critics charged.

The loudest voice sounding the death-panel alarm belonged to Betsy McCaughey, former New York State lieutenant governor and a conservative health-policy advocate. McCaughey, who now runs a foundation called the Committee to Reduce Infection Deaths, is still fiercely opposed to Medicare’s making comparative-effectiveness decisions. “There is comparative-effectiveness research being done in the medical journals all the time, which is fine,” she says. “But it should be used by doctors to make decisions — not by the Obama bureaucrats at Medicare to make decisions for doctors.”

Bach, the Sloan-Kettering doctor and policy wonk, has become so frustrated with the rising cost of the drugs he uses that he and some colleagues recently took matters into their own hands. They reported in an October op-ed in the New York Times that they had decided on their own that they were no longer going to dispense a colorectal-cancer drug called Zaltrap, which cost an average of $11,063 per month for treatment. All the research shows, they wrote, that a drug called Avastin, which cost $5,000 a month, is just as effective. They were taking this stand, they added, because “the typical new cancer drug coming on the market a decade ago cost about $4,500 per month (in 2012 dollars); since 2010, the median price has been around $10,000. Two of the new cancer drugs cost more than $35,000 each per month of treatment. The burden of this cost is borne, increasingly, by patients themselves — and the effects can be devastating.”

[Count 'Bility]

When we had our 2nd kid, my wife refused everything they wanted to give us. Diapers, medicines, etc, everything. We brought our own meals. We questioned every bit of medication they tried to give to determine if it was some over the counter crap that I could get for here at walmart. Both stays were paid 100% out of pocket (for reasons I will not get into) and we saved over 800 dollars on the 2nd visit by doing this way. It was recommended by a farmer couple that we know that has done it with 3 of their 4 kids for the sake of saving money. If you dont question and snoop every little thing or pill that they give and take an itemized list of everything they use, they will bend you over the bed come bill time. We wouldnt even take the water mug they wanted to give her. I brought one from home.

[Junior]

When we had our 2nd kid, my wife refused everything they wanted to give us. Diapers, medicines, etc, everything. We brought our own meals. We questioned every bit of medication they tried to give to determine if it was some over the counter crap that I could get for here at walmart. Both stays were paid 100% out of pocket (for reasons I will not get into) and we saved over 800 dollars on the 2nd visit by doing this way. It was recommended by a farmer couple that we know that has done it with 3 of their 4 kids for the sake of saving money. If you dont question and snoop every little thing or pill that they give and take an itemized list of everything they use, they will bend you over the bed come bill time. We wouldnt even take the water mug they wanted to give her. I brought one from home.

 

That's great, and in a situation like having a child, you can reasonably do that. But what about when you have a heart attack? You are in no condition to make such decisions...

[tschu]

As long as we keep paying it, they'll keep charging it.

[Junior]

As long as we keep paying it, they'll keep charging it.

 

Health care really isn't one of those things you can just decide to not use.

[sd'sker]

this american life did a story about prescription drugs and coupons for brand name. the insurance companies were really the victims and big medicine just screws us all.

 

it is 16 minutes and definitely worth a listen if you get a chance: link

[strigori]

As long as we keep paying it, they'll keep charging it.

 

Health care really isn't one of those things you can just decide to not use.

All we need is a law forcing healthcare to have a price list. Its a very simple solution, that actually would force the free market on to healthcare. A hospital that was showing that they would charge several dollars for an aspirin would very quickly no longer have people selecting that hospital.

[Junior]

As long as we keep paying it, they'll keep charging it.

 

Health care really isn't one of those things you can just decide to not use.

All we need is a law forcing healthcare to have a price list. Its a very simple solution, that actually would force the free market on to healthcare. A hospital that was showing that they would charge several dollars for an aspirin would very quickly no longer have people selecting that hospital.

 

Price caps on life saving drugs would help. As would tort reform, so doctors don't feel compelled to order unnecessary tests just to cover their asses in the event of a lawsuit.

[strigori]

As long as we keep paying it, they'll keep charging it.

 

Health care really isn't one of those things you can just decide to not use.

All we need is a law forcing healthcare to have a price list. Its a very simple solution, that actually would force the free market on to healthcare. A hospital that was showing that they would charge several dollars for an aspirin would very quickly no longer have people selecting that hospital.

 

Price caps on life saving drugs would help. As would tort reform, so doctors don't feel compelled to order unnecessary tests just to cover their asses in the event of a lawsuit.

Knowing openly what drugs cost would drive down prices. No one would buy 'Fancy New Drug X' if 'Good Ole Tried and True Drug B' was a fraction of the cost. Antibiotics come to mind, for a lot of stuff a 30 year old one will get the job done for most people on comon infections, but they get prescribed the new one that costs several hundred times the cost. Most people would pick B or X in that situation.

 

Tests make hospitals and clinics money, that is one reason why they order unnecessary ones. I'm hesitant to call for what many want as 'tort reform' as it is often angled to protecting profits, not just eliminate idiotic lawsuits. There are many cases where a lawsuit is more than justified.

[carlfense]

Tests make hospitals and clinics money, that is one reason why they order unnecessary ones. I'm hesitant to call for what many want as 'tort reform' as it is often angled to protecting profits, not just eliminate idiotic lawsuits. There are many cases where a lawsuit is more than justified.