How Hospital Bills Are Killing the US

Trumped-up bills 'drive the federal deficit': Steven Brill of Time

By Neal Colgrass,  Newser Staff

Posted Feb 25, 2013 4:30 PM CST | Updated Mar 2, 2013 8:00 AM CST

(Newser) – Getting Hodgkin's lymphoma was bad enough. Then Ohio resident Sean Recchi received his hospital bill: $83,900. You can blame his limited health insurance, but Steven Brill at Time looked behind the numbers to see why MD Anderson Cancer Center in Houston charged so much. What Brill found: shocking markups that hiked prices by several hundred percent or more above cost. Queried about the markups, MD Anderson said their billing practices "are complex" and "similar to those of other major hospitals." Which is exactly what Brill found: "a uniquely American gold rush" of tax-exempt "nonprofit" hospitals across the US that are raking in huge bucks and handing administrators mega-salaries. Among his other findings:

  • Hospitals are forcing Americans to spend nearly 20% of GDP on health care—double the usual for developed countries—and more than the next 10 top-spending nations combined.
  • Each hospital's internal price list, or chargemaster, is far higher than what Medicare pays for health care. Advocates have started a cottage industry helping people understand and reduce their bills.
  • Brill uncovers huge markups from specific bills, like $4,000 for items like a blanket warmer, marking pen, and surgical gown. Recchi was billed $13,702 for medicine that cost MD Anderson only $3,000 to $3,500.
  • Brill's first solution: Bring all Americans under the Medicare umbrella, and charge wealthier Americans more for their medical care. At least Medicare forces hospitals to charge the proper rates. Only problem: A massive, single-payer overhaul like that won't happen anytime soon.
  • Solution No.2: Strengthen anti-trust laws to restrict the power of hospitals; this would give insurance companies more leverage to bargain over prices. Then tax hospital profits at 75%, and tack a surcharge on excessive non-doctor hospital salaries. And ban the chargemaster. Will any of this happen? Probably not, because hospitals are too powerful.
  • Brill's take on ObamaCare: It's good for certain things, like curbing some hospital-bill collecting and getting more people insured. But ultimately it's just bringing more customers into a grossly unfair marketplace.
Click for the full article.

  (Shutterstock)
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