• Why Are American Health Care Costs So High? – the movie!

    Twitter brought me this gem this evening. It’s made by John Green, who is a New York Times bestselling author, and who also – it turns out – lives in Indianapolis. TIE readers will recognize many of the facts, as well as the charts.



    • The reason healthcare is too expensive in the US is mostly because there is little or no competition in the marketplace .
      Insurance companies , pharmaceutical companies, hospitals and physician groups have monopolies fostered by healthcare policies and regulations that have eliminated the normal economics of supply and demand. There is no price transparency in the system at all.
      Government can eliminate these monopolies in a single payor system but there are many flaws in such systems and many countries such as Canada, and Jzoan are moving toward privitization.
      My feeling is that the high prices can be cured with open competition such as is seen with LASIK or cosmetic surgery. Eliminate the control of insurance by the insurance companies allow individual policies and maximize competition in the marketplace and the prices will come down. It’s the American way to do it. We don’t need the European malaise.

      • “countries such as Canada, and Jzoan are moving toward privitization.”

        Simply not true.

        There are a few people that talk incessantly about more privatization in Canada, but there has been essentially no movement in that direction whatsoever. In fact, several attempts at it have been stopped by both governments and courts.

        But it’s a non-sensical argument from the get go because almost all of Canadian health care is already private. The government simply runs the health *insurance* program. Doctors, specialists, labs, etc are all privately owned and operated entities.

        Governments also fund many hospitals in full or in part, but governments have very little to do with the operation of the hospitals.

        • And the privatization that exists is illegal. My reading is that the federal Conservatives would like to open up Medicare to private interests but this is hard to do after they’ve washed their hands of the entire issue through their funding declaration. Also, it is truly a “third rail” issue if that concept even exists. A federal or provincial politician who suggested any form of privatization wouldn’t last long enough to reach down and touch that rail! (Canadians are well aware of how the U.S. system doesn’t work for 99% of the population.)

          I think the provinces are holding off on prosecuting the lawbreakers, including Dr. Brian Day’s private surgical clinic in Vancouver and the many Quebec doctors who are offering a private “concierge” service (while remaining in the public system). Day is cherry-picking the easiest, most profitable cases and dumping the more difficult ones on the public system. Similarly, the Quebec doctors are choosing healthy, younger patients to serve nearly “on demand” while telling their public patients that reservations are months away. “Hogs do get slaughtered.”

      • LASIK is 100% optional, as is cosmetic surgery. If the prices are too high, people can wear glasses or contacts.

        If you have cancer and the prices are outrageous, you can pay them, hope that another doctor has better prices (not a particularly good bet and in the mean time, you have to pay for the second opinion) or die.

        Most health care is more like the latter than the former. As the video pointed out, demand is inelastic. If you don’t have an inflamed appendix, a fantastic sale on appendectomy won’t make you buy one. If you do have an inflamed appendix, you’re in pain and you need it fixed regardless of the price tag.

        • Most of healthcare is elective and not emergency care
          Emergency care is inelastic and you don’t have time to weigh the options. National health in Canada and Europe does a great job with emergency care but does a very inadequate job with elective care. Elective care represents more that 75% of health care expenditures

          Elective procedures can wait. Even heart dusease and cancer treatment can wait but not very long. National health systems do very poorly with elective procedures such as knee and hip replacements and even heart surgery. In these instances care is often delayed in terms of many months and is rationed. Canadians often opt to get their care for these procedures in the US.

          I believe in universal individual basic health insurance perhaps with large deductibles up to a maximum and have copays as a percentage. People who qualify can get subsidies to help pay for these policies. Theses policies can be legislated to cover catastrophic care and can be mandated in terms of price. Insurance would be individual owned and portable( see Regina Herzlinger , PHd” Who killed Health Care”

          The individual could then decide which hospital they was to go to based upon various factors including a transparent price. Then and only then will cost comparisons be made and competition would bring down prices. For those who need help in decision making there would be advisors available

          • What do you mean by most? Something like 85% of spending is on 15% of people. You think that’s all elective?

            • Uh, elective just means it’s scheduled in advance, as opposed to brought in the emergency room door and needs to be done right now (layman’s definition, obviously). So yeah, an awful lot of that 85% spent by 15% of the population is elective – cancer treatment isn’t generally given to people who are brought in off the streets needing their chemo, it’s scheduled in advance.

              I know lots of people use the term ‘elective’ in order to imply that the wait lists in Canada aren’t important because they’re just for elective surgery, which most people think are breast implants, tummy tucks, and the like. I have a hard time believing that a doctor might be taken in by this shabby rhetorical trick, but apparently so.

          • Canadians ALMOST NEVER go to the U.S. for medical services covered by provincial health care plans – as has been pointed out on numerous occasions on this very website. For those Canadians who have the means to seek treatment at U.S. hospitals, do you want to start arguing that Americans should be barred from traveling out of their state of residence to get specialized treatment at, e.g. the Mayo Clinic or other world-renowned specialist medical facilities?

            B.C. wait times for hip replacement surgery, all doctors in the entire province. 2,309 cases waiting at 6/30/2013. 50% performed within 12.1 weeks. 90% within 31.2 weeks. http://www.health.gov.bc.ca/swt/faces/Wooden.jsp shows each hospital, each doctor and their waiting cases and 50% and 90% statistics.

            When quoting comparable American statistics, what wait-time is assigned to those Americans who don’t qualify for Medicaid/Medicare, don’t have employer health insurance, and don’t have assets to pay for a hip replacement? I assume it’s ZERO because they’re rationed off the waiting list; it should be Medicare age less current age, assuming they can hang on that long. For a 25 year old with a shattered hip, 40 years wait time is a lifetime and makes 4 months look pretty reasonable.

            • “Canadians ALMOST NEVER go to the U.S. for medical services covered by provincial health care plans – as has been pointed out on numerous occasions on this very website.”

              For example, here:


            • Don, I am an American who worked in hospitals for many years, including acute care and rehab hospitals. Perhaps my constant exposure to people with serious medical issues made me more anxious than most Americans, but there have been many times over the years when i seriously wanted to move to Canada (my husband’s work situation would allow that) simply because my fear of the American medical system was so great, and the possibility of catastrophic financial loss was a low level but ongoing source of stress for me. My fear wasn’t for myself per se–my fear was that I would become ill or injured in a way that resulted in such high medical bills that my family would end up in financial ruin. Granted, we can’t live our lives worrying about every little thing, but this was one worry I’d much rather live my life without–the fear of catastrophic financial ruin due to an unexpected illness or injury.

              But, dear Canadian friend–WHAT CAN YOU TELL ME ABOUT CANADIAN HOSPITALS’ “CHARGEMASTER LISTS?” Do your hospitals even have ‘chargemaster lists?’ In the US, chargemaster lists are lists of services, etc., provided by the particular hospital–AND their fabricated, 10-fold inflated cost for each of these services, etc. The purpose of the chargemaster is “to have a $ number from which the insurance company or payor can negotiate downwards.” What does that tell you? That the actual “cost” cited in the chargemaster is BOGUS. American hospitals do this chargemaster thing in order to reap enormous profits with which they can then build Dubai-like medical super-complexes with super specialties and enormous staffs, expensive diagnostic equipment, etc. NONE of which seriously improves the quality of health care in the US and, in fact, by draining us American taxpayers and insurance carriers is actually causing us harm.

              Does CANADA do anything ike this, to build big mega-medical complexes?

      • “My feeling is that the high prices can be cured with open competition such as is seen with LASIK or cosmetic surgery.”

        I just don’t know where to begin with this kind of nonsense.

        If someone says to you I’m not going to give you LASIK unless you pay me $100,000 you at least have an alternative — you can continue to wear glasses.

        Likewise, if someone ways to you I’m not going to give you this life saving emergency surgery you also have an alternative — you can die.

        • Uh, you do realize that one element of competition is that if one doctor says the LASIK surgery costs $100k, another one can come along and say she’ll do it for $2k, right?

          • There is almost nothing in medicine more elective than LASIK. It’s a terrible example of how the health care “market” really works.

      • Joel, I think you are viewing the world through the lens of your political views. Actually, I think health insurance systems are moving a bit in the other direction. The Dutch who formerly had a very high cost system have moved toward more of a single payer model. There is no particular interest in Japan or Canada to change models and there is certainly no talk about change in any of the other large, European countries. Any “malaise” in Europe is more a function of the economic austerity that they have chosen to practice since the recession began.

        Also, you are confusing private/public insurance with private/public health care systems. The VA and the NHS, for example, are public health care systems. The doctors in France and Canada, OTOH for example, are mostly in private practices. Healthcare systems and health insurance systems are two entirely different things.

    • Great video thanks.
      I do have two criticism though:
      1. His discussion of negotiating with providers is unsatisfactory, if you look at other markets you see that you do not need big buyers (monopsony) to get lower prices, it is more complicated than that.
      2. His discussion of one paying all he has to get healthcare, is true of food also if fact we need food more than healthcare, but food prices are low in the USA. And that without huge buyers, it is more complicated than that.

      • Food has the largest buyers of all commodities – they just tend to be entities like super markets and McDonalds. When was the last time you went shopping at your local farm?

      • It’s so tedious explaining the obvious. Can people think about the facts, instead of sticking to a theory?

        There are so many differences between food an medical care, it’s impossible to list them all.

        I can plan when and where I buy groceries. I buy them regularly, so I know the prices. If rib-eye is too expensive, I can buy hamburger.

        Aside from the obvious case of arriving at the hospital in severe pain or unconscious, until you get the diagnosis, you don’t know what you need to buy. If I have a hurt leg, I can’t decide setting a fracture is too expensive, I’ll take bandaging a sprain instead.

        Many cities, not to mention less populated areas have only one or two hospitals, as opposed to gazillions of grocery stores, restaurants, convenience stores, and whole sale clubs. You can buy a year’s worth of food in advance and store it.

        The chicken producers compete with the steak producers and the tofu producers, but oncologists don’t compete with cardiologists.

      • F, The concept of hospitals ‘negotiating with buyers’ sounds good in theory. It even sounds like just plain common sense. But this–‘negotiating with buyers’–is precisely where hospitals saw, and ultimately leaped upon, their golden goose chance to increase their profits multi-fold (and I mean 10-fold and 20-fold, not just 2 or 3 fold). The CHARGEMASTER list that all hospitals have created for their own use was compiled ‘to create costly $ prices for each item and service from which payors can then negotiate downwards.” The hosptials then make these numbers up, literally fabricating them out of air, and the mark-ups created for the chagemaster are huge and completely arbitrary.

        Take my family’s experience with the rabies vaccination. I was bittten by a rabid animal and received the rabies series in the mid 80s. Cost to my insurance company, charged by Princeton Med. Center’s ER? About $550.00. Fast forward to around 2005 when my medically uninsured unemployed 23 yo son, who was between jobs, called me from Princeton Med. Center and asked me if I would agree to pay the bill for the same rabies series, (he would pay me back when he could). In hindsight, I wonder what PMC would have done if I had refused. Would they have refused to give my son the rabies series? I don’t know. I personally felt my son did not need the series–my son felt the same way–because there hadn’t been a human death from the rabies in NJ for over 60 years, and I myself used to catch bats that got into our NJ house in a jar with gloved, protected hands and release these bats outside (bats are good things, they eat mosquitoes). My son didn’t even get anywhere near the bat! But my son’s fiancee’ got freaked out about it, so there you are.

        The Thing that gets me here is that my son REPEATEDLY asked the staff what the cost of the rabies series would be. The repeated answer was “I don’t know.” My son said, “….because if it’s more than $500 then I’m not going to get it.” The nurse then said, “It will probably be more than $500.” My son then said, “Then I’m not getting it.” But once again, his fiancee’ freaked out, so he got the series for her sake. THE THING IS that ANY of the Princeton Hosp. staff could have looked up on PMC’s Chargemaster list and told my son the cost IN ADVANCE–but nobody did. Nobody thought to.

        What’s more, the ER COULD have referred my son to a facility which charged the fair list price of $440.00 for the series, BUT THEY DIDN’T. [I know for a fact that it was $440 at the time because a friend of mine worked in an animal control and had to get the series every year). So forget ‘fair market prices’ and ‘competition keeping prices low.’ Doesn’t happen.

        So what was my son’s PMC chargemaster-based bill for the rabies series? $9,000.00. I repeat– $ NINE THOUSAND DOLLARS! A totally arbitrary $ number for the rabies series which some PMC administrator pulled out of the air because, “Hey, here’s an easy place to make a big quick profit–we’ll just charge $9,000 for the $440.00 rabies series and the insurance companies will have to pay it, like it or not.” Only my son, like many Americans, was uninsured at the time. The bill would have fallen to ME, except for the fact that Princeton University decided to pay the PMC bill in my son’s case for liability reasons since the bat ‘incident’ happened on PU property.

        But $9,000! We’re not rich people. That’s a lot of money to pay, just so PMC could pocket $8,500 profit JUST OFF OF ME.

        …and I have heard of 2 other cases now, in 2 other hospitals: One charged the payor $25,000.00 for the $440.00 rabies series, and another charged $35,000.00 for it! And no, the $34,500.00 profit on the series does NOT go to providing charity services to people who are poor–that’s a lie. Uninsured patients are forced to pay these huge $numbers, and so far the US courts have backed the hospitals in making patients pay whatever the hospital charges them, fair or not.

        The Princeton U. lawyers, my son was told [my son had friends inside the PU system who kept him informed], “refused to pay” the $9,000 bill because it was unreasonable. But lawyers have the power to refuse to pay such bills, whereas ordinary folk like my family do not have that kind of power. PMC would have oh-so-kindly helped me set up a payment plan for that $9,000 but I would have been stuck with paying every penny of it.

        REMEMBER THAT behind every $9,000 or $25,000 or $35,000 chargemaster charge for the rabies series (the $charge varies widely BECAUSE is is an artificial number to begin with) is A Real Flesh and Blood Person, The Hospital CEO, that made up the $number to stick payors with in the first place. {“Hmmm, shall I make the charge for the rabies series $9,000 or $20,000 or $40,000? Medicare will pay $440.00 for the series” ( BTW, Medicare has its OWN ‘chargemaster list’ of sorts, but it is based on TRUE costs of services, NOT artificially inflated costs), “but we can stick all our non-Medicare patients with a $35,000 bill and there’s nothing they can do about it.”

        “But hey, hardly anybody ever REALLY has to pay that chargemaster number, it’s just a number you start with for insurance companies to negotiate downwards from.” Nice rationalization for guilty CEO consciences but NOT TRUE. Read Brill’s Artticle. AQUIFIER, YOU WILL FIND IT AT YOUR LOCAL LIBRARY. Sometimes gaining knowledge means that you have to go a little out of your way to get it, like walking to your local library.

    • Well, I could spend the whole night tearing this apart (and finding a few things that are dead on, or true-but-misleading-in-context) but it’s midnight and I just took my pain meds after my own surgery, so maybe I won’t. I will, however, dispute quite emphatically the notion that the uninsured can usually only get health care in the most expensive way possible (I’m paraphrasing his comment at about 3:30), like the emergency room. Nonsense. There is a whole world out there where the ‘uninsured’ can get high-quality, affordable care. It’s the subject of my blog, The Self-Pay Patient (http://theselfpaypatient.com/), and it’s quite likely going to take me months to describe and report on all these options. Things like health care sharing ministries, cash-only doctors, direct primary care practices, online bidding for surgical and hospital procedures, medical tourism, and numerous other options. For most people, the free-market that self-pay patients are in will work just fine, unless people like the guy ranting in this video succeed in mis-educating the public and getting them to buy into the idea that they have two options – participate in the bureaucratic medical system that Obamacare represents (although it’s been around for a while), or rely on the nearest ER for needed care.

      • Or they can make the political choices that will get them single payer …

      • I don’t think he is mis-educating anyone. This is already a mentality. It’s unfortunate that people in areas or conditions to search for affordable self-pay don’t generally have the resources or know-how to do so (i.e. knowledge about neat blogs such as yours that give money-saving tips). However, for the majority of the population in the self-pay bracket, there are a significant number of other concerns that take large precedent. Often times they do not or will not go see a doctor until the condition is extremely painful, concerning, etc. Few people end up in the ER on routine visits. This is a strong psychological barrier to them searching for affordable alternatives and that is how people end up in the ER or in local clinics (when they are healthy, often they aren’t worried about finding cheaper healthcare because of other priorities e.g. paying bills). For someone that has the time and opportunity to make saving money on healthcare a priority for themselves, the type of self-pay tips you give can work wonderfully. Unfortunately, a HUGE amount of the self-pay bracket can’t divert their time and resources toward that.

        • It’s sort of chicken-or–egg issue. I agree that this mindset is already prevalent among many, but his rant and others that perpetuate the mindset sure isn’t helpful!

          I guess in part it depends on what sort of relationship most people need with health care providers. I tend to favor the non-managed relationship, where I go to the doctor only if I think I need to. So if I have a cold or a sore wrist, I’m not going to the doctor – not unless it persists or gets steadily worse to the point of it impairing my life. Others want the more actively-managed relationship, where they show up regularly for relatively minor ailments in order to ensure they are OK, and get the latest advice from their doctor on how to live a healthy life.

          So I’m not concerned about a self-pay patient who doesn’t have a “regular” doctor (unless there’s a chronic condition involved), I’m mostly interested in making sure that when they do need to see a doctor, they can do so without all the problems that too many self-pay patients currently face.

        • For people who do not have the time or resources to find better prices, they can turn to others who are more knowledgeable.
          For example, an insurer doesn’t have to have a network, which forces prices down the throats of all the parties.
          All the insurer needs is access to a network of prices, so that the patient has some objective material, in which to start negotiations.
          It is common knowledge that prices for various procedures re all over the map, and should not be taken seriously.
          No one should take the price asked for, particularly in expensive procedures. That is the MSRP, and due to the randomness of pricing, the MSRP is the place to start the whittling down to a fair price for patient and provider.
          Don Levit

          • I’d say it’s not common knowledge that prices in health care are often essentially fictitious, and unfortunately a lot of providers (or more specifically, they’re billing staff) are simply dumbfounded at the idea that they should negotiate down the ‘chargemaster’ rate – ‘the patient asked for the price, I have a price right here on my chargemaster that I’ve given them, what else can be asked of me?’

            That’s one of the reasons for my blog, to hopefully let people know that they should negotiate, they should find out what insurers pay (umm, probably in the opposite order of what I just listed), and if the provider won’t negotiate, find one who will.

      • SEAN,

        You post some interesting ideas regarding alternatives, ideas regarding things like–and I quote:

        “Things like health care sharing ministries, cash-only doctors, direct primary care practices, online bidding for surgical and hospital procedures, medical tourism, and numerous other options. For most people, the free-market that self-pay patients are in will work just fine….”

        Such systems may (or may not) work with medical facilities which deal with more ho-hum things such as sore throats, minor burns, and cuts and scrapes (hopefully not on the face), etc.–and you may have a fair number of people who are not only willing but actually eager to explore the option of going to such facilities.

        But take a case like mine where I (badly) needed a Total Knee Replacement? What’s the first piece of advice I read regarding TKRs? “Seek out a facility that focuses on joint replacements because what you want more than anything is an experienced staff and experienced surgeon. Avoid small facilities, where a surgeon may only perform a dozen or less joint replacements a year. [Believe me, I’ve seen people with bad results].

        OR a case where a child unfortunately has an accident that causes a large gash across her face. You don’t want just any old plastic surgeon (or maybe not even a plastic surgeon, given that your direct primary care facility may not even have a plastic surgeon on its staff) stitching up your child’s face, when there’s clearly going to be a scar–but the concern at this point is how bad that scar is going to look if it is not stitched up by an experienced plastic surgeon.

        I’m not knocking your ideas, Sean, they may have a valid, valuable place in our society. But I don’t see how your ideas can substitute for quality treatment for non-routine disorders.

        • Thanks for your comments, Jane. Actually it works for non-routine care as well, check out the Surgery Center of Oklahoma where they offer real prices for care, including some major knee operations. I agree that volume is important when it comes to surgery outcomes, it’s one of the reasons I’ve long been a fan of physician-owned specialty hospitals.

          And there’s no particular reason to believe experienced doctors won’t be among those offering real prices. I actually used to work for a plastic surgeon (when he was in Congress) and you’re right that that’s probably the person you want dealing with your child after a terrible facial cut, guess what – because so much of their practice is in the cash-only world (breast enhancements, face lifts, etc.) they are very much accustomed to the idea of giving someone a real price!

        • Jane, the comments structure doesn’t allow me to reply to your questions so I’ll insert here and repeat the questions.


          Nothing. Patient invoices don’t exist (unless you’re not insured under B.C. Medical, e.g. American tourist breaks leg at Whistler). My last hospital stay cost me zero. The only way I could have incurred an expense was by renting a TV.

          Unlike the fee schedule for doctors, how hospital invoice the Medical Plan is completely opaque. Only someone involved in a hospital administration or in the provincial medical plan would be able to explain what happens. Since there is only one customer for the entire province – government – I would guess it would be a combination of fixed rate per patient/day, procedure plus a negotiated fixed fee for each individual hospital. Speculation. Here’s a National Post article explaining Ontario’s change in hospital funding. http://news.nationalpost.com/2012/03/20/what-the-ontario-hospital-budgets-cut-in-favour-of-new-funding-model/

          I did find a list of representative fees that Canadian hospitals charge non-residents and the uninsured. I cannot vouch for its accuracy. http://www.david-cummings.com/documents/canadian_hospital_rates.htm

          2. Does CANADA do anything like this, to build big mega-medical complexes?

          Hospital development seems to be demand-driven. Provinces have not hesitated to close low-volume rural hospitals and concentrate specialty medical services in larger centers. Here’s the Vancouver General Hospital/UBC wiki link. http://en.wikipedia.org/wiki/Vancouver_Hospital_and_Health_Sciences_Centre

          Canada has not entered the medical tourism industry realizing that they cannot compete with India and Thailand. There’s also a political problem of using “public medical resources” to treat foreigners on demand when Canadians have to wait for those same procedures.

          More generally, since there is only ONE customer – the provincial government – the $30 aspirin is unlikely to work.

          3. ” my fear was that I would become ill or injured in a way that resulted in such high medical bills…”

          There are two components to a serious injury – first, the high medical bills you referred to and the second, the loss of income because you can’t go to work. In Canada, the first doesn’t exist while the second is real. Many employers have both short-term disability insurance and long-term disability insurance coverage for their employees. Despite this, medical problems are the third most important cause of the 100,000 personal bankruptcies in Canada each year (after job loss and marital breakup). http://www.bankruptcy-canada.ca/bankruptcy/causes-of-bankruptcy-in-canada.htm

          • THANK YOU, DON, Your information about Canada’s health care system was very helpful. One of our dearest friends in life, who had dual Canadian-American citizenship, ultimately settled in Ontario. He fell off his roof while working on it, and I thought that Canadian healthcare, what I saw of it as a result of my friend’s fall, was very impressive. Alan had a concussion and was immediately admitted to the hospital for 2-3 days of observation.

            …but what really stood out in our minds, especially given that our American-born friend with dual Canadian/US citizenship had lived in the US for 30 years ( and thus was personally familiar with the American system of healthcare as well as the Canadian. Add to that that, as husband and father of 2, he also had 3 others dependent on him for their medical needs–another source of fear for Americans regarding health care, because for us parents it’s not just our own healthcare costs and needs we worry about, it’s our children’s as well).

            …anyway, what was keenly in our minds as Al lay in his Canadian hospital bed, was that Al could lie there comfortably, free of any worry that his fall from the roof might not be adequately covered by his US healthcare policy, and that as a result his hospital bills might end up so high that it would drain his daughters’ college funds and his own savings for retirement. An American worry.

            he was also a husband and father of 2 girls, meaning he had 3 other people dependent on him for their healtcare needs as well)

            • Jane

              We all agree that for emergent care the Canaduan system works just fine. But it’s the long wait for “elective” knee replacement or heart surgery that causes most of the consternation with the physicians and their patients.

              Other responders quoted a study that revealed that very few Canadians go to the US for care. These studies very probably sponsored by the Health Minisry and are utterly bogus.

              A nurse that worked for me a year or so ago had been working winters in a Florida hospital where the majority of patients come frim Csnada. Recently a provincial governor from Nova Scotia came to the US to have surgery and that made a big splash. The Miniter of Health for Canada just recently announced plans to privatize some of the system.

              Here is an article that quotes that the number of Canadians coming to the US in 2012 was in excess of 46,000 and waiting list for “elective” surgery has lengthened


    • Another factor that is overlooked is the debt comparison between recent med school graduates. What is the difference between USA and non-USA grads?

    • OMG–“Know Thine Enemy,” and thine enemy is the hospital CHARGEMASTER.

      PLEASE, ALL 23 OF YOU,, you MUST read the ‘wake-up call’ Time Magazine Article, “Bitter Pill: Why Medical Bills Are Killing Us,” by investigative journalist Steven Brill [Feb. 20, 2013 issue]. It is considered the most powerful piece of journalism since Watergate. It will shatter all your commonly-held beliefs about ‘why’ healthcare costs are so high, as it did mine–and for the best interests of us all because we must ‘Know Our Enemy’ if we as healthcare consumers are to speak up and fight it.

      The Demon in our HC system, which has not only driven up the cost of healthcare 10 fold or more but has also driven 10,000s of US families into bankruptcy and financial ruin, some even to suicide, is the innocent-sounding CHARGEMASTER. The ‘Chargemaster’by definition is ‘every hospital’s internal price list.’ When author Brill began to question hosp. officials about the chargemaster,, he said they ‘deflected all conversation away from it.’ And for good reason, he learned–there is ‘no rationale’ behind this core document that is the basis for $100s of $billions in health care bills. They will charge $7.00 for a paper cup a patient might drink from; $77.00 for a $1.00 gauze pad. And NO, those markups do not go to ‘charity cases’ as they will tell you. They go to building huge mega-medical-meccas like the one in Philly and Houston (which look like “Dubai”).
      Huge medical meccas do not necessarily mean improved health for US citizens. Medicine claims “First, do no harm.” Yet the main cause of bankruptcy in the US is due to medical bills and most of those bankrupted this way actually had some kind of medical insurance. It just wasn’t enough. “Do no harm?” Pray tell, how does draining a family’s financial resources and driving them into poverty ‘do no harm?’ PLEASE read Brill’s article and SPREAD THE WORD.

      • So Jane, do you have an ungated citation where one can go to read the article? The one i found took me to the Time site – where i had to be a subscriber to read it – I am not …

        • HI AQUIFIER,

          Thank you for your interest. I’m not the most computer-savvy person on earth, but I found the entire article (and I’m sure it’s the entire article, because we’ve subscribed to Time Mag for decades) in what I think is a PDF file. The wording and numbering, which immediately folllows a white square with a big red rectangle up in the left-hand corner plus 3 red lines inside the square (I think that means it’s a PDF file?) reads as follows: “2013,2,26,MedicalCostsDemandAndGreed(2).pdf

          Well now, there you go, I guess it IS a pdf file, but I don’t know why the ‘2.’ But if you print it out, it will be 42-44 pages long. It’s the longest article Time Mag has ever published. IF you print it out, set your computer up to print it at 90% or 95% or you will lose a lot of lines.

          BTW, I just had a Total Knee Replacement Surgery 5 weeks ago. Yes, we do have good insurance. Yesterday I received the first bill in the mail (the insurance company supposedly will pay all but $2,000.00 of the costs). The bill was for $52,000.00.

          What gets me, A, is that during my 3 days in the hospital I asked a LOT of medical professionals if they had read or heard of Brill’s article, or if they knew how ‘Chargemaster charges’ were inflating charges 12 fold (for no other reason than to make huge profits to build DuBai-like Medical Centers), and NO one knew a thing about it. They all thought that the ‘Chargemaster’ list was a perfectly legitimate list. I used to think so myself, back when I worked in a hospital–although I don’t think things got corrupt until the 90s. Not sure.

          If the pdf doesn’t work, let me know and I’ll try to pdf you my own copy. But there’s always the library.

          If for some reason I don’t get an email you send me through this site, you can get me through Yahoo Questions and Answers. I’m Magicbird. But please read the article and please DO spread the word. So far the government hasn’t seemed to take any serious action against the price-fixing crimes that are being committed.

          • didn’t work

            • AQUIFIER, IT DIDN’T WORK? You mean you COULDN’T GET the article?

              Aquifier, I have the original Time Mag copy. I will scan the whole article into our computer if that’s what it will take to get it to you. Because I really want people to read this article, for their own best interests–and my own best interests, as a concerned American healthcare consumer who is very disturbed about what is going on.

              So, Aquifier, please tell me–if I scan 44 pages into a PDF file, can I email it to people and/or attach some kind of link to it so that other people can access it? If that’s what it takes, I will do it. Just tell me how.

      • Jane I agree with you about hospital charges. They are hidden behind layers of secrecy and an attemp to game the system by obfuscation

        What we need is transparency in the system and the only way to get there is to have a free market competition in health care. Ask why a Texas heart hospital can do a coronary artery bypass procedure for $30,000 and a nearby general hospital tries to get $110,000 for the exact same service.
        Ask why an individual armed with information about prices and quality of care can’t make appropriate decisions. Healthcare is no different economically thT any other service Consumers do that all of the time. We have the government in various ways getting in the way of normal economics

        The entire system is out of sync with normal economics precisely because of government meddling . Remember wage and price controls? medicare now dictstes what gies on in the entire system.That’s what is happening here only that there is a trillion dollar pie to divide amongst the players

        • Hii Joel, Thank you for your comment. But speaking as someone who has had multiple surgeries (I was hit by a car 2 decades ago), and who myself has worked in hospitals, it is simply not as simple as ‘comparing prices’ as if one were buying new tires for a car. A couple of comments here have made the interesting comparison to Lasik surgery (which I myself have had, BTW). But trust me on this, because I did my Lasik surgery very thoroughly back in 2001 before having my surgery:

          With Lasik surgery (and surgeons), it is relatively extremely easy to pick and choose the surgeon that you feel is the most cost-effective for you. Back in 2001, you could find out in advance how many ‘eye’s each surgeon had lasered. The surgeons who had lasered fewer eyes charged less than the experienced surgeons. You could choose a more experienced surgeon if you preferred an experienced surgeon, or you could choose a less expensive one to save money (now they use machines to measure, so it’s not the same).

          HOWEVER. If you need something like a Total Knee Replacement, like I did, try asking an orthopedic surgeon how much he would charge you. “It’s hard to say,” and “It depends,” are the answers you would get–IF you ask, because what you’ll find out when you get there, and you’re sitting on the table about to ask about the costs, you suddenly realize that it’s pointless and stupid to ask questions like this, as if there is any such thing as fair competition between hospitals and services because it is totally impossible to compare the costs and services between one hospital in the US and another, although there may (or may not) be regional differences (but if you think it’d be less costly in Houston TX than Philly PA, forget it). . Because it depends on whether or not there are any complications, etc… PLUS it’s not just about the surgeon’s fee–you’ve got a whole staff of people in there working on you. Plus there’s the cost of the hospital facility itself and the recovery room, the nurses there, the transport people, the cost of a cup of apple juice ($7.00. I kid you not).

          One other thing, Joel. PLEASE DO read the Brill article I mentioned because One Big Shockeroo in the article is that us Americans have Medicare to THANK for keeping honest tabs on the true cost of medical services. Without Medicare keeping its amazingly accurate records, hospitals REALLY would be running amuk. PLEASE read Brill’s article. Thanks!

        • Joel,

          Just one more quick comment: You speak of how one hospital will charge $30,000 for a procedure, and another hospital will charge $110,000 for the exact same procedure? You’re absolutely right, Joel–but this has nothing to do with government intervention (in fact, it has to do with LACK of gov’t intervention). The $30,000 vs. the $110,000 is THE CHARGEMASTER at work! Each hospital chooses its own arbitrary numbers ‘as a number from which to negotiate down from with insurance companies.’

          Joel, you and I are on the same side. PLEASE read Brill’s article. You will be so glad that you did.

      • Jane, I’m more than sympathetic to the argument that chargemaster prices are a disgrace (about half the posts on my blog to date start with recounting the tale of someone hit by these ridiculous charges, it seems), but I’m not sure I can go along with a lot of what you say. Chargemaster prices hit self-pay patients hard, but are basically irrelevant to the overwhelming number of payers, either government programs, insurers, or self-insured companies. Whatever is driving high medical costs in the U.S., chargemaster’s have little to do with it.

        And the claim that the majority of bankruptcies in the U.S. are driven by medical debt is basically bogus. The study’s authors used such a broad definition of medical bankruptcy that if you had $1000 in medical debt and $50,000 in credit card debt, then you were a medical bankruptcy. And they ignored the fact that, in cases where bankruptcy could well and truly be laid at the feed of medical causes, the biggest problem wasn’t medical bills but loss of income from being too sick to work (or having to care for a family member, etc.).

        • Quoting from the study:
          Using a conservative definition, 62.1% of all bankruptcies in 2007 were medical; 92% of these medical debtors had medical debts over $5000, or 10% of pretax family income. The rest met criteria for medical bankruptcy because they had lost significant income due to illness or mortgaged a home to pay medical bills. Most medical debtors were well educated, owned homes, and had middle-class occupations. Three quarters had health insurance. Using identical definitions in 2001 and 2007, the share of bankruptcies attributable to medical problems rose by 49.6%. In logistic regression analysis controlling for demographic factors,
          the odds that a bankruptcy had a medical cause was 2.38-fold higher in 2007 than in 2001.

          I don’t think you comment warrants dismissing this peer-reviewed study, sorry.

        • Sean, Thank you for your response. In my opinion, your view of medical bills and bankruptcies may be correct if you are looking at 6 small pieces in a 1,000 piece jigsaw puzzle, but I feel it’s the bigger picture that needs to be looked at. And trust me on this, Sean, I am on every American’s side in this matter. It sickens me to see how we ordinary Americans are once again being exploited to our enormous harm by those institutions who have the power to do it. The Big Banks did us in a few years ago–call it greed if you will–but this time it is the hospitals, the medical centers, that are claiming themselves tax-wise to be ‘non-profit’ yet are making such enormous profits that they are able to use these profits to build ‘DuBai-like’ medical complexes that are so huge that they have become the primary industries and primary employers for many major cities and 1,000s of people.

          Is that good? THEY think so, the altruistic money-spenders and professional name-makers who think that Their Way is the Right Way.. They think their mega-centers speak for great medical care. Yet the US doesn’t have great medical care. These centers aren’t increasing life expectancy for Americans. To the contrary–they are driving up the cost of medical care in the US, which is already the most costly chunk in our economy.

          Sean, all I can say here is PLEASE READ the 42-page article by Steven Brill. Do you think Time Magazine would have published this 42-page article if they didn’t think that what Brill was saying was worth hearing? The American public needs to know! Watergate was nothing compared to this.

          ….and, by the way, have you noticed how health insurance premiums have been going up by leaps and bounds over recent years? Don’t blame the insurance companies for this, it’s not their fault. They, too, are held hostage to the artificially fabricated CHARGEMASTER.

          Here you go: WATCH THIS:


    • Great stuff but completely glosses over the cost of insurance, which is damn near the complete “ball” of inpatient/outpatient expenses he mentions (about $400 billion in excess administrative costs, both on the insurers’ side and, don’t forget, the providers’ side – who have to deal with the insurers). Also he might mention the VA, which treats a very needy population for much less, has an excellent digital medical record keeping program (not that this lowers costs, but it does greatly improve quality). That program is open source and available to any provider, with free consulting. The VA pays half for it’s pharmaceuticals, because unlike Medicare, which is prohibited from negotiating prices, it can.

    • Just a general comment –

      This is a site whose authors pride them selves in “sticking to the facts” , With that in mind, I think it would be really useful if, when people cite articles, studies, etc they would post citations for them – so that, for those of us likewise interested in “the facts” it is possible to read the actual reference and then comment on it or the posters interpretation of it – otherwise, referring to articles or even information in articles, is too removed, IMO, to be discussed intelligently ,,,,

      • What was not cited?

        • Articles mentioned by various commenters – i brought this up because your articles are meticulous for citations and it seemed to me that people commenting should follow suit – for example, it does no good, IMO, to cite Brill’s article if there is nowhere to read it except “at the library” and the study re medical bankruptcy …

    • HI SEAN,

      I apologize, because I just realized that I had inadvertently strayed from my intended topic, which is the highway robbery cost of medical care in the US with the ‘Chargemaster’ list being used to create false numbers which patients or insurance companies are forced to either pay or negotiate around. I’m not AT ALL focusing blame on physicians or surgeons for the fees they may charge for their services–sorry if it sounded that way, I didn’t mean for it to. And I’m not at ALL placing any blame on any of the medical professionals who do their best to serve us well when we show up in their facilities for treatment. The author I speak of, Steven Brill, does not blame these professionals, either–in fact, he makes it clear in his articles that physicians deserved to be paid well based on the number of years they studied plus the very high cost of their educations.

      The Demons here are the people who run the hospitals who make up the artificial numbers which are on each hospital’s chargemaster list, which result in huge profits for these hospitals (which actually declare themselves to be “non-profit”). They use the tons of money they rake in to expand their DuBai-like medical complexes. AND give themselves exorbitant salaries (for ‘non-profits??!). Stamford Hos. paid its top CEO, Grissler, $1,860,000.00 last year–his annual salary. $One million and up is not uncommon for ‘non-profit’ hospital CEOs. And hey, who pays these salaries? WE do. Us taxpayers and patients.

      But you have to read Steven Brill’s article. It will knock your socks off. The truth is frightening.

    • Jane:

      I will ready the article you mentioned.

      I would also like to recommend to all of you an excellent book on the subject of health care costs. “Who Killed Healthcare” by Regina Herzlinger. She is a healthcare economist at the Harvard School of Business. She has studied the system or non-system of healthcare in the US and cites that all of the players in the non-system are to blame for the out of control costs that the consumer has to bear.
      This small book is well documented and provides a straight forward and relatively simple solution the the healthcare crisis that we are about to experience. The solution my dear friend is not the “Affordable Healthcare Act” that is neither affordable nor does it solve the problems we now face.

      I have a healthcare background having practiced medicine for more than 35 years and I also have a MBA in healthcare. While I don’t profess to have all of the answers here, I do respect people such as Dr. Herzlinger who has spent a lifetime studying the subject.

      • Thank you, Joel. I will seek out Dr. Herzinger’s book and read it. Thank you for sharing your knowledge and your sources, so that we other Americans can become more educated about The Real Truth of the US healthcare problem.

    • GEE, AQUIFIER, GIMME A BREAK! You wrote (and I quote),
      “For example, it does no good…to cite Brill’s article if there is nowhere to read it except “at the library” .”

      ….nowhere to read Brill’s article it EXCEPT AT THE LIBRARY?

      With all due respect, Aquifier, what planet do you live on? Because on the planet ‘Earth,’ libraries are places you go to to access written and otherwise-published information for the purpose of increasing one’s knowledge. Libraries exist solely to serve the best interests of all citizens.. Libraries are part of why US citizens can feel “free” and ‘safe’ from tyrannic ruling powers who would impose censorship on reading material if they could.

      …so, nowhere to read Brill’s article EXCEPT AT THE LIBRARY? Where, pray tell, do you suggest Brill’s article be made available if the library isn’t good enough for you? Solely online?

      Allow me to comment that you can, I believe, purchase Brill’s article directly from Time Magazine online, although it would probably cost you a couple of bucks. [But definitely worth it]. If you recall, Aquifier, I offered to try to PDF you the entire 44 page article by scanning it into my computer and posting the link if possible…but that’s a lot of work for me to go to for someone who doesn’t sound like he’s all that interested in reading the article to begin with.

    • Jane:
      Thanks for writing about your health care experiences.
      I am curious if the chargermaster price is the official price, and it is not paid – is it written off?
      If so, there are a heck of a lot of taxes that are not being paid!

      On a side note, if a person has access to an insurer’s network prices, but, of course, is not actually in the network, could this access be used in the negotiations?
      Don Levit

      • Hi Don, You ask some interesting questions, but I’m afraid I’m not going to be very good at answering them. You, and everyone else, really need to read Brill’s article yourselves. After all, it is 44 pages long–there’s no way I could pass on 44 pages of Brill’s info. to anyone with any skill on a website like this–the best I can do is give you bits and pieces. But trust me on this–Brill’s article is a fascinating read. You won’t be able to put it down.

        In fact, I’ll go a step further and say that, in my opinion, it’s every concerned American’s responsibility to get hold of Brill’s article and read it. Again, Brilll’s article is not ‘just any article.’ Time Mag. allowed this 44 page article, longest it’s ever published, because it is an extraordinary piece of investigative journalism.

        And if you don’t educate yourselves as Americans then you will forever remain hostage to a corruption in our healthcare system that is so frighteningly horrible that it’s almost impossible to believe that the hospital managers who allow these 10-20-fold increase in costs, even as they drive families to bankrupty–well, how could anyone be so cruel and so greedy? Yet it’s not just one person doing this, it’s large staffs of CEOs in hospitals everywhere in the US who are exploiting taxpayers and patients and paying themselves salaries of $millilons. Simply because they can do it and get away with it. There’s no competition in the market, so they can pay themselves whatever they like and just keep charging patients more.

        You asked about hospitals writing off losses, and do they have any losses? Hospitals say yes. Brill says no (more or less). But I think it goes like this:

        Take the rabies series that cost $450 (The Real Cost) to administer [BTW, we in all sincerity have Medicare to thank for holding their numbers to honest numbers). But the hospital chargemaster cutes its rabies series as costing $25,000. Let’s say the patient is uninsured and simply has no money to pay the $25,000 bill with. So the hospital collects $Zero from this one particular patient. I believe that the hospital can then legally claim that it lost $25,000 in revenues because this patient didn’t pay any of his bill.

        But do you see what happened here? The TRUE amount that it cost the hospital to administer this man the rabies series was $450.00. So, in truth, the hospital actually only lost $450. HOWEVER, since this hospital’s chargemaster has deemed the rabies series as worth $25,000–and since the patient didn’t pay the $25,000 bill the hospital sent him–the hospital can then legally claim on its taxes that it took a $25,000 loss in hospital income as a result of this one patient’s nonpayment. Now multiply that $25,000 loss x 100 people and you now have a $2.5 million loss..and so on and so on…

        Nice, huh? …so on paper these non-profit hospitals are taking huge losses, even though they simultaneously are making extraordinary profits.

        Oh, you asked about negotiations. Actually, there’s a whole new profesion that’s popped up–advocates who help people with high hosptial bills lower them by negotiating them down with the hospital.
        But not every patient knows such negotiators exist. The whole system has gone insane, and it’s the most innocent, trusting people who get hurt the most–because the hospitals don’t even inform patients that they can negotiate the cost downwards, same as insurance companies do.

        But you can forget “charity” care. Hospitals don’t just ‘forgive’ debts. They make patients pay as much of thos chargemaster prices that they can. What they ‘generously’ do is set up payment plans for paitents who have difficulty paying.

        • Jane: I think you’re generally on the right path regarding the insanity of chargemaster prices, but there’s a lot more to our current health care system’s dysfunction than just this. Chargemasters aren’t the cause of our ills, they’re the natural result of the creation of what is supposed to be a ‘priceless’ market for healthcare, i.e. one in which prices are neither transparent or real. That’s the result of third-party payment, which the Affordable Care Act builds on rather than replaces.

          And thank you for reminding me about the patient negotiators, that will be the next blog post for me at The Self-Pay Patient! You’re right that not enough people know about them, I do know that members of health care sharing ministries typically have access to them through their specific ministry, but they are not well known.

    • Reply to Joel B. Singer above:

      1. “But it’s the long wait for “elective” knee replacement

      Targets set in 2004: Knee Replacement Federal Within 26 week
      B.C. 90% within benchmark by March 2010

      Actual B.C. provincewide May 1 to July 31, 2013
      Patients 4,277 (4.4 million) 50% within 16 weeks 90% within 36.1 weeks

      Vancouver Coastal (Metro Vancouver) 899 Patients, 50% within 11.3 weeks 90% within 25.3 weeks.

      All patients on the waiting list for all procedures adults 67,786 (1.5% population) Pediatric 4,624 (0.11%) http://www.health.gov.bc.ca/swt/faces/Search.jsp

      To compare: What are the knee replacement wait times for the population of Kentucky (4.38 million) but in an area 35% larger than Texas?

      2. A nurse that worked for me a year or so ago had been working winters in a Florida hospital where the majority of patients come frim Csnada [sic].

      Of course she would see a lot of Quebec snow-birds in Florida in the winter. Retirees fall, have underlying medical conditions, catch seasonal flu, have allergic reactions, get sunburnt, over-exert themselves in the heat, etc. A nurse who worked in Maui would say the same thing about all the people from Western Canada.

      That’s why the Daily Caller article you cite says: “The nonpartisan Fraser Institute reported that 46,159 Canadians sought medical treatment outside of Canada in 2011…” The extreme-right wing
      Fraser Institute (clone of the American Enterprise Institute) doesn’t separate emergency medical treatment from elective medical treatment. I wouldn’t be surprised if the split were 99%/1% or higher.

      I have lived and worked in three Canadian provinces since 1975. I have never met or known anyone who went to the U.S. for any elective medical treatment. (On the other hand, I had an emergency appy with post-op inection in the U.S. that took 3 months to recover from once I was able to get home.)

      On the specific issue off former Premier of Newfoundland and Labrador Danny Williams, here’s a link to the Maclean’s (=Time magazine) article. http://www2.macleans.ca/2010/02/23/canadian-health-care-survives-danny-williams-surgery/

      3. The Miniter [sic] of Health for Canada just recently announced plans to privatize some of the system.

      Medicine is a provincial matter so the Federal Minister of Health has little ability to privatize the health care system. The only thing I can think of is her proposal to allow a private blood donor system to pay blood donors – Canadian Blood Services does NOT pay for donations of blood. http://www.hc-sc.gc.ca/ahc-asc/media/nr-cp/_2013/2013-87-eng.php

      Commentary from National Post (right-wing) newspaper. http://life.nationalpost.com/2013/07/25/should-blood-donors-be-paid-canadians-health-professionals-divided-on-key-public-health-issue/

      4. waiting list for “elective” surgery has lengthened

      Here’s a link to CIHI study on wait-times (I’ve not looked at it). The only relevant wait-time is the one that applies to ME today! http://www.cihi.ca/CIHI-ext-portal/internet/EN/subtheme/health+system+performance/access+and+wait+times/cihi010647

    • Hi Sean, Thanks for complimenting me for having mentioned advocates. I hadn’t stopped to think about it. I think it’s great that you’re going to mention them on your blog–there are so many people out there who are so innocently trusting of hospital authorities that they just accept whatever the hospital tells them–if the hospital says, “You owe $40,000” and never suggests to them that they get an advocate to help them lower the cost, then these people would never even think to look for outside help. I think it’s pretty rotten of hosp. administrations to stick people with these huge bills but then never mention that there’s help available out there to help them lower the bills. Of course, that would cut into the hosital’s 12-fold markup profits, wouldn’t it?

      Another Thing that came up in Brill’s article: Example: a patient named ‘Steve H,. who was told he needed to have a stimulator surgically implanted in his back. He thought his $45,000 of accesible healtcare insurance money would be enough to cover the cost of the surgery. It wasn’t. But here’s The Thing about this:: The Biggest Cost Item in his $87,000 bill was the cost of the Medtronic Stimulator Device that was implanted into his back.

      But here’s The Thing about that: The true wholesale list price of the M.S. Device is “about $19,000.” And Mercy Hosp. could purchase it at a 10% discount, so the hospital paid $17,100 for the device their surgeons were going to implant into Steve H’s back. BUT. Hospitals now mark up the price of things like this MS device so that they themselves, meaning the hospitals, can reap even more profits. So how much did Mercy Hosp. charge Steve H. for the device the hosp. paid $17,000 for? $49,000. Meaning that the hospital made a profit of $32,000 on the device they purchased for $17,000 and then ‘sold’ to the patient Steve H. for $49,000. Was Steve H. allowed to ‘comparison shop’ and purchase his MS device at a lower price? Nope. Even though, if he had been informed in advanced and allowed to do it, he himself could probably have purchased the device online for $19,000 and saved himself $32,000. Steve’s insurance paid the first $45,000s of his bill. However, he has to pay Mercy Hosp. the remaining $40,000 out of pocket. They set up a payment plan for him that he’ll be paying for years.

      IT’S JUST SO EVIL, what these hospitals are doing. But they will tell you “Hardly anyone ever pays those chargemaster prices. Insurance companies pay all those bills.” That’s how they rationalize their huge markups to make them sound “okay” to outsiders. But it’s a lie. Oh, and they also say these profits all go to theirr charity cases. But that’s a llie, too.

      PS: I didn’t understand your comment about 3rd party payors. Meaning insurance companies? But they aren’t the villains here–they are stuck with the chargemaster bills that the hospitals make up–they can only negotiate the bills downwards so far. Thank God for Medicare for keeping track of true costs!