The profit motive may work for some kinds of business, but its role in U.S. medical care has led to price gouging and obscure billing practices that can be difficult if not impossible to understand, driving some to poverty or bankruptcy.
That’s the view of a prominent writer and activist, Elisabeth Rosenthal, who spoke last week at the Bankhead Theater in Livermore. Her talk was part of the Rae Dorough Speaker Series.
Rosenthal told the audience that while there is no single, simple solution to the problem, all of us can contribute to improvements by taking personal actions like insisting on being treated only by medical professionals within our own insurance networks and by asking doctors to find low-cost laboratories for blood tests.
Rosenthal is a Harvard-trained physician who spent more than two decades writing health-related articles for the New York Times and other national publications.
Today, she is executive editor of Kaiser Health News, a nonprofit, Washington-based news service that is part of the Kaiser Family Foundation and not affiliated with the Kaiser Permanente medical care system.
Early this year, she published An American Sickness, a book that details the evolution of the American healthcare system from a small, experimental health insurance program in Texas more than a century ago to today’s healthcare giants, focused on profit more than on health.
The theme of both her book and her talk was summarized in the opening sentences of the book’s introduction: “In the past quarter century, the American medical system has stopped focusing on health or even science. Instead it attends more or less single-mindedly to its own profits.”
The book included some of the thousands of stories of skyrocketing drug prices and unaffordable medical bills that she accumulated in her medical reporting.
The stories came from doctors as well as patients. She described them to the Bankhead audience as “a litany of all the ways in which American healthcare is failing patients today.”
As if on cue, as the Independent was going to press with this article, the Washington Post reported on the drug daranide, prescribed for a rare genetic illness called periodic paralysis, whose price rose from $50 for a bottle of 100 pills to $15,000 after a company called Strongbridge Pharma acquired it.
That was not one of Rosenthal’s stories, but she told others like it.
There was the German visitor who was billed $10,000 for trauma team activation after being seen at San Francisco General Hospital for minor injuries suffered while bicycling.
There was a New York City high school teacher with severe autoimmune disease who could not function without a medical infusion costing $19,000. When his physician moved to a different hospital a few blocks away, he moved his infusion treatments there and discovered that the same procedure now cost $110,000.
There was a Houston city worker who complained about the high cost of a prescription drug called Duexis, which is simply a combination of two common nonprescription drugs, the painkiller ibuprofen (often sold as Advil or Motrin) and stomach-soothing famotidine (sold as Pepcid.)
Rosenthal estimated the monthly cost of the easily available ingredients at $11, but the small drug company Horizon Pharma obtained needed patents, got FDA approval and was selling the drug at $1,600 per month.
In many of these cases, Rosenthal said, insurance companies cover some if not all of the cost, so the patient may feel relieved.
That’s understandable, she said, but people should speak up. “Too many of us open the bill, find something that doesn’t seem right (but) our out-of-pocket response isn’t that high so we think we have dodged a bullet.
“It’s really important that we speak out on these issues. ‘If you see something, say something,’” she said, mimicking the national anti-terrorism slogan in the context of healthcare economy.
The extreme prices contribute to radical inflation, she pointed out. In some cases, the insurance companies may simply be paying because other companies are doing so, and they don’t want to lose business from major medical providers.
Costs rise because of the counterintuitive practice of “sticky pricing,” she said. Where there are competing companies, we would expect one company to promote its lower prices for greater sales if another company raised its prices dramatically.
In healthcare, however, it seems that if one pharmaceutical company raises its drug price tenfold, another company will do the same.
Rosenthal herself was the daughter of a physician. When she entered medical training, moved on to medical practice and later to journalism, she took it for granted that U.S. healthcare was focused on patient care.
By the time she wrote her book, she told the Bankhead audience, “I felt like I didn’t understand… I didn’t understand how, in my lifetime… American medicine has gotten so out of whack.”
As she wrote the book, she realized, “What has happened over the past 25 years of my lifetime is a gradual shift of focus from patient-centered, evidence-based care to a business. Healthcare has been slowly hijacked or diverted by business interests.”
She emphasized that she is not opposed to all profits in healthcare. She did say, however, that the values of businesses – “their return on investment, their efficiency, their profits — are not the values of healthcare.
“I think those (profit-focused business values) have gotten on the front burner while caring and curing and treating are on the back burner.”
She had several recommendations for patients to reduce the risk of surprise bills and overpricing and to combat medical cost inflation.
For one, she said, beware of ambulances, which in the U.S are increasingly “run by venture capital companies because they are good business; they charge and they are not in the network in many cities anymore.”
For another, ask your physician to have blood tests done at commercial labs that operate inexpensively. A blood test sent to a hospital may cost literally 20 times what it costs in a commercial lab.
She advises asking the doctor to look into the comparative costs of local radiologists to be able to order any necessary X-rays at a reasonable cost.
“I think it’s every physician’s responsibility to know…To say to the guy who is charging $1,000 rather than $100, I’m not going to send my patients to you anymore because you’re ripping them off. A lot of them have high deductible plans and they’re paying for this.”
She advises people facing hospital stays to insist that they not be treated by anyone outside their insurance network. “When you get that form that says you agree to pay for your care, I always tell people to write in, ‘So long as it’s in my insurance network.’
“My goal in a hospital is to make sure that everyone who touches me while I’m there is in my insurance network.”
She said the problem of receiving surprise out-of-network bills does not generally occur with Kaiser Permanente, which is a unified system. “However, that is not generally true in the rest of the country.”
She also thinks it is important for hospitals to publish the services and costs that patients may encounter: the so-called “Chargemaster” list.
Californians are fortunate to live in the only state that requires Chargemaster publication, she said. Under a 2003 state law, sometimes called the Payer’s Bill of Rights, every California hospital must make the list public.