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Perspective: Skyrocketing health care costs are caused by political corruption

Perspective: Skyrocketing health care costs are caused by political corruption

Picture of Steven Weissman

I am going public to reveal the astonishing truth. There is a simple way to instantly, with ease, end our nation’s health cost misery!

When the founder of a Miami area hospital, who was a longtime friend and client died, I became interim president. The insider’s view of the healthcare system is enough to make anyone sick.

Healthcare is the only industry exempt from the rigors of the U.S. free market system. Ask the price of any healthcare service and you will always receive the same answer: “What insurance do you have?” Billing is determined by how much can be extracted from each patient on a case by case basis. It is a predatory system that is built on the destruction of free market economics through political influence.

Value and market price are entirely irrelevant concepts. Patients who are out of network or uninsured are routinely charged 10X more than “normal” rates. This is fraud in any business – except health care.

Because there are no actual prices for medical services, there is no price competition. Without price competition, there is little resistance to charges that continually skyrocket far in excess of the inflation rate.

Price gouged consumers have no practical way to defend themselves against unreasonable medical bills. Litigation entails retaining an attorney plus an expert witness to testify regarding the reasonableness of the amount billed. In virtually every case, the cost of litigation makes defense against medical price gouging impractical. The result is health costs are the leading cause of personal bankruptcy.

Last summer, the New York Department of Consumer Affairs made national headlines when it forced Whole Foods to admit the company short-weighted customers. Our government employs thousands to protect consumers from being bamboozled on an ounce of ham, gasoline or for a fraction of a percent on a mortgage or credit card loan. However, when it comes to healthcare pricing, consumers are abandoned and health providers are shielded from free market competition.

How did we end up with predatory healthcare pricing? Pricing has been rigged by the industry that pumps, by far, the most cash into Washington. The healthcare industry spends more on lobbying than the defense, aerospace, and the oil and gas industries combined. Morally corrupt politicians have allowed the industry to foist upon our nation the highest cost medical care on earth, by a margin of at least 50% per-capita, while providing significantly lower quality than exists in other wealthy nations.

The currently fashionable concept of price transparency will not ameliorate the health cost crisis. A simple blood test for cholesterol can range from $10 to $400 or more at the same lab. Hospitalization for chest pain can result in a bill from the same hospital for the same services ranging anywhere from $3,000 to $25,000 or more. Transparency would merely show that each healthcare provider charges extraordinarily wide-ranging different prices for each service it provides and continue to sow price confusion.

Laws requiring health providers to publish price ranges or average prices are growing in popularity. Such so called “price transparency” serves as a public relations gimmick to relieve ever mounting public pressure on elected representatives. Simply put, each of us is entitled to know the actual price we will be charged for our healthcare. Limiting disclosure to price ranges or averages, while permitting providers to predatorily bill each person a different amount, unfairly benefits providers at the expense of all patients.

The solution is for Congress to require healthcare providers to publish actual prices, just like all other businesses. All patients, insured and uninsured, should be billed the same published rate for the same service. Hospitals, physicians and labs should have continued freedom to set their own prices, but predatory pricing — a different rate for each patient — must end.

When rates are set, patients will be able to shop for good healthcare value. Providers will be forced to compete based on price, quality and service. Healthcare costs will plummet.  The cost of health insurance, which is simply a direct function of underlying medical costs, will plummet as well.

Requiring actual healthcare pricing — the essential ingredient of a free and competitive market — is the only thing necessary to instantly cure our sick healthcare system.  It really is simple.

Public pressure on politicians is essential to bringing this horrendous abuse to an end.

 

Comments

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I spent 3 days in the hospital all because my blood pressure was low and they claimed they couldn't find a reason for it, i got exrays,catscans,and an MRI.i saw a orthopedic doctor, a cardiologist,an ear,nose and throat guy,a hospitalist (what ever that is ) nurse practioners,phlebotomists , physical therapists etc.... 27,800 dollars all for....as it turned out to be low potassium levels caused by medication prescribed by my physician.as my company is self insured, they are exempt from any rules that applies to insurance companies, i ended up paying 4,000 out of my own pocket because some of these procedures were deemed not necessary.

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I worked for a non profit hospital and your account is not accurate of a non profit. They only get paid a fraction of what the bill is worth especially from medicare.

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Three years ago I was in hospital for three months,Three operations and a month in rehab. Medicare and Blue Cross billed a total of 500,000 dollars and were paid over 300,000 dollars.Doctor care saved my life. How much is a life worth?

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Just look at how Healthcare systems work in other economically advanced countries. Their systems may not be the best way, but they must have some wonderful aspects about them. The United States health care system is famous for prices that go way through the roof, and can put regular families into sudden, unexpected poverty. In my case, we are still making ends meet, but who knows for how long? Health insurance for my family of 4 costs privately more than a monthly morgage payment ($1500/mo.), or through employer ($500/mo.), plus a $6,000 (privately) or $3,000 (through employer) deductible per year! Not to mention, that doctors' hands are tied. God forbid a woman would get breastfeeding cancer in her 20's! The doctor can't call for a mammogram until the patient is at least 40. God forbid a patient get chrohn's disease or colon cancer in their 40's! The doctor can't call for the colonoscopy until the patient is 50!
Please, make prices of each doctor and facility known, so that patients know whether their insurance will cover it. Please make prices of each doctor and each facility known, so that patients know, that when insurance denies, they can still cover the bill. Please!

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So patients know prices? What does that say about quality or necessity?

Posting prices is the easy bit. Determining quality much harder. I worry that standard pricing will invent providers to perform more unnecessary care!

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You have identified a part of the puzzle. But insurance companies, predatory pharmaceutical companies and over compensated, redundant administrations contribute as well. The American public is being financially abused by our healthcare system in a multitude of ways.

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Even if one dies, hospitals will try to collect exhorbitant charges billed to uninsured patients by filing claims against that person's estate or Trust. If the hospital is publicly owned and operated, that bill might become a lien against any property owned by the deceased and heirs or beneficiaries of the deceased often have no recourse and are forced to pay charges that have routinely been marked up (often for services which in reality cost only 10% or less of the amount which was charged). In any other context this would be called highway robbery.

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Great article but needs to go more indepth and not totally accurate... many of the comments have added quite a bit of clarity to the situation. The whole problem with the ACA was that the insurance industry was allowed to write it in their own best interests! Only in 'merica. The predatory natures of the pharmaceutical and insurance industries is just incredible. Why are we even allowing advertising of medicines on tv on a constant and frequent basis, with the 'advice' to "talk to your about 'drug x'"? Since when should a patient suggest what drug they should be prescribed and in what world does that make sense? How about that advertising money go for R&D instead? How about a cap on profits to keep costs down? We truly need to follow more of the policies that are being used in Europe and more developed countries... we're falling hideously behind in infant moralities, and healthcare in this country in general. We should all be incredibly ashamed at the state of healthcare in this country. I'm a former Medicare educator and have been watching all this very closely for a long, long time. And I profited nicely from company stock of insurance companies (especially when there was a huge merger of 3 of them)... so don't tell me they're not making money hand over fist. FORCE all healthcare involved entities to act ETHICALLY if they can't do it for themselves.

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I agree totally with the points made by Mr. Weissman and wonder if anyone knows why, for example, if one has United Health Care in one state (Utah), with a list of "preferred providers" then one compares "preferred providers " in Colorado, the system won't let me use a Colorado preferred provider, stating "out of network". This is a nationwide company. If a company has a network, then a member should be able to go to any provider nationwide, regardless of the state they live in.
I also fail to understand how when I call to verify if a facility is on "the list" I am told, "well the facility is an in network provider, but none of the doctors working there are contracted with us." !!!???
And why can our price-gauging hospital here get away with charging five to ten times more for a basic lab procedure then if I go to Grand Junction or have my doctor utilize a different lab (which he does, knowing how ridiculous the pricing is at the local hospital)?

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While this is important, there are many reasons why U.S. health care costs are so high - but chiefly it is that the health care industry is a cartel that has locked out all competition. The price gouging is just one (major) symptom of that disease.

As another example: the cartel has purposely kept the number of doctors low in order to keep wages high. Even Americans who train in medical schools overseas that were established and operated by American doctors with classes taught by American doctors to the exact same standards as the doctors who graduate from the limited number of slots in American medical schools, find it difficult to actually practice in the U.S. For example, the doctors who graduate from U.S. schools typically get paid something like 30K or 40K per year during their residency, but American graduates of these overseas schools who were educated to the same standard have to PAY 30K to 40K per year in order to get the residency that is required by law before they can operate as a doctor on their own.

But that is still just a small part of it - the whole industry is a scam.

Meanwhile, there is one part of the American medical system where costs have declined 50% in the last few decades: elective procedures of any kind.

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They took a few drops of blood from my 2 yr old son's index finger, and charged about $1000 for drawing the blood. Lab charges were different and Lab bill directly came from the Lab. And then I found out that they ask for charity at Costco and other places. Completely shameful. Some stupid guys volunteer to work there and distribute coffee to patients.

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As long as big Pharma can advertise their drugs on television and pass the costs on to the consumer, drug prices will continue to soar. Big Pharma should not be allowed to advertise. We don't need consumers telling their doctors which drug they want to take. Politicians and big Pharma get rich at the expense of the common people.

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Equality is something i hear alot of, but i see very few people who can put those words into action when dealing with people.. The solution to many problems is 100% SIMPLE!!!!

Universal Health Care for Every US Citizen means who ever makes that decision truly cares about people outside his circle of benefactors and family needs.

2 Traits that i've seen in every human being i've encountered in my short life of 40yrs..

Those who have no independent thought and conform to anything forced upon them and those who have plenty of independent thoughts about various complexities of life.

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What would Jesus say and do about this type of organize legal on paper crimes against humanity is this freedom and what is true freedom is illegal underworld above ground ?

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Um, sure there are bad or corrupt health care providers either getting paid by pharma to prescribe expensive drugs that are no better than cheaper ones, creating fake charges or otherwise gaming the system, but our pricing is more or less set. Some of us, especially us academics, are salaried and must disclose all conflict of interest. Personally, I prescribe expensive stuff only when the cheap stuff won't do or there is no cheap alternative - the new, once only dreamed of gene therapies for neuromuscular disease are a case of the latter. And then we go through paperwork hell and even court hearings if we want our patients to actually get these things that we only dreamed of 10 years ago, and we do NOT get paid a penny to do that.

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Knowledge is the other root cause problem.
We don't know which body inputs affect body outputs.
If someone knew them, disguised them as something else, and talked about health benefits at the end, everyone would be duped.
Ask your doctor.

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