The Chargemaster

billsOne of the several magazines I subscribe to is Time. It’s skinnier than it used to be and it doesn’t provide as extensive a coverage of the nation’s culture as it used to aspire doing, but it does produce writing of superior quality. At least that’s my opinion. It’s latest edition is devoted largely to a serious and comprehensive investigative report on the nation’s broken healthcare system, an article in four parts by investigative journalist Steven Brill entitled “Why Medical Bills Are Killing Us”.

It is not my intent to parse the article here – it’s extensive, but I will say that it’s written in plain English and with interesting case studies that most can understand and sympathize with.  It is my hope that this serious, ground-breaking treatise will make the word “chargemaster” a household name.

Brill’s aim is to answer the question of why America’s healthcare costs too much, which of course it does. He says,

Taken as a whole, these powerful institutions and the bills they churn out dominate the nation’s economy and put demands on taxpayers to a degree unequaled anywhere else on earth. In the U.S., people spend almost 20% of the gross domestic product on health care, compared with about half that in most developed countries. Yet in every measurable way, the results our health care system produces are no better and often worse than the outcomes in those countries.

If you dear reader are, like I am, covered by good health insurance, you will be perhaps interested but not avid in this subject. But if you are one of the millions of uninsured or the inadequately insured (despite ObamaCare), then you should be avid, nay, even terrified by what Brill has to tell us because the system we have today will invariably and by design lead you to penury if you get seriously sick. What we have is not what a health care system should be and he offers common-sense solutions to fix it, if only we can find the political will to do so. You will be surprised, I predict, that he lays blame wherever it belongs and it lands on both parties (although one is more to blame than the other).

This is a nationally important report that I predict will be discussed and referenced for many years to come and I was delighted to find that it, unlike some from Time in the past, has been made available online.

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About Jim Wheeler

U. S. Naval Academy, BS, Engineering, 1959; Naval line officer and submariner, 1959 -1981, Commander, USN; The George Washington U., MSA, Management Eng.; Aerospace Engineer, 1981-1999; Resident Gadfly, 1999 - present. Political affiliation: Independent, tending progressive as the GOP recedes from its Eisenhower roots.
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52 Responses to The Chargemaster

  1. This was a great article and I highly recommend it to anyone who hasn’t read it. He had a great interview on the Daily Show, if you or your readers are interested:
    http://www.thedailyshow.com/extended-interviews/424076/playlist_tds_extended_steven_brill/424058

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    • Jim Wheeler says:

      Thanks for that link to a terrific interview, Jennifer. It makes a great introduction to Brill’s article and I hope it will inspire others to actually read it. I woke up this morning and realized what a poor title I had, so I’ve changed it to “The Chargemaster”. You know, I’ve been blogging on this subject for more than two years and I can’t believe I never heard the term before. As far as I’m concerned, familiarity with “chargemaster” and its implications is the sine qua non for discourse on medical costs. If you don’t know what it means, you don’t know beans.

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      • I think that highlights the confusion and bureaucracy of the health care system in this country. Honestly, I feel like the system is intentionally confusing to keep us from really understanding what is going on here.
        I liked that he highlighted the fact that it is really impossible for an individually to “shop” for health care and services. The reality is that prices are not “fixed” and authority for pricing lies in several different hands – and many of us don’t know where that is.

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        • Jim Wheeler says:

          Right, Jennifer. But when you say that ” . . . authority for pricing lies in several different hands . . . ” I hope you are not implying some kind of accountable responsibility for pricing. Because of the chargemaster concept there is no basis for medical pricing – none. The price is whatever the patient’s choice of remedy decides sounds good – to them that is, not you. As Brill says,

          But for patients, the chargemasters are both the real and the metaphoric essence of the broken market. They are anything but irrelevant. They’re the source of the poison coursing through the health care ecosystem.

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  2. ansonburlingame says:

    And you, Jim, and I have been “discussing” HC for at least that long with no substantial agreement in sight, yet.

    While HUGE, I believe the problem of HC in America is relatively simple, at the fundamental level. It simply costs too much money to be provided to every American to the extent demanded by most Americans. You (and I) as you pointed out are doing just “fine” with the cost of HC however. But many others are not so fortunate, for sure.

    OK, now drop back 50 or so years, to your childhood days. Did you or any of your friends growing up lack adequate HC? I didn’t for sure and my parents were not in any way “rich” or priviledged in any way. And even the really impoverished in my home town, the blacks, did not lack “adequate” HC either that I ever saw. I NEVER heard of or for sure observed anyone die an agonizing and untreated, untimely death caused by lack of “adequate” HC, in those days. Did you?

    So what has changed over those intervening years, at a fundamental level? Maybe it is the definition of “adequate”. People died “back then” from heart disease, probably near the same rate as they do today I would suspect. As well people died of cancer back then, but maybe it was undiagnosed back then, at least until near the end of their lives.

    The cost of “adequate” has gone out of sight for sure. Well I am all for improving “adequate” as long as such a new standard can be achieved financially. Today “adequate HC” can be defined rather quickly, technically, but NO ONE has been able to figure out a way to pay for it, in America at least. Not by a long shot since around 1965 when “you know what” came into effect, government payment for adequate HC for old people, that now grow much older today.

    But I wonder if those older folks today are any happier than in our time growing up.

    I understand, rather completely I think, that you believe we CAN pay for adequate HC in America as it is now defined. You believe the “rich” can provide the resources needed to do so. If only “someone” would “pay a little more” then…… in terms of HC.

    In my view there are far too few “someones” and the need is HUGE, not a little bit more.

    And therein is our national dilemma today.

    Anson

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    • Jeff says:

      I don’t want to get drawn into this discussion at the moment, but I will quickly point out that every other first world country in the world is doing a better job at controlling health care costs than the US. There is no point in talking about how much better we are doing than we think we are when US is firmly in last place, and there is no point in saying something won’t work unless you find some money for it when it *is* working, all around the world, on a smaller per capita budget than we are on now. These are basic points, and until we reach agreement on them, any discussion of extra taxes, etc. is idle speculation.

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      • Jim Wheeler says:

        @ Jeff,

        1. By commenting you are already in the discussion.
        2. You are absolutely right that Americans are getting less for their healthcare dollar than the citizens of other developed countries – a lot less. And that’s one major point of the report, there is no objective basis for the pricing.
        3. When you say “find some money for it”, you are missing the point. If you will (please) read the Brill report you will understand.

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  3. ansonburlingame says:

    OK, I feel compelled to give a more concrete example. Medicare as we know it today.

    Medicare, adequate HC for old people costs in the range of $550 Billion each year but is not paid for completely by anyone, old, young and in between, unless you think borrowing equates to paying for something on a sustainable level.

    So fix it I say, raise the needed revenues to pay for Medicare as we know it today, adequate Medicare for JUST old people. Go ahead and cut the cost to Medicare to bare bones if you like and see how “adequate” such HC becomes in the near term. But after you cut it enough, raise the needed revenues to keep it adequate as well.

    Do that, politically, and THEN we can talk about how to expand Medicare to ALL Americans as a matter of priority. But in doing so, tell me the revenue streams to achieve such results as well.

    MAKE Medicare both the technical and financial model for adequate HC and THEN, after it is proven to work right, try to expand it further and still pay for it. My guess is that you will never even make Medicare right for EOL care, much less the much larger package, technically and financially, for just old people, much less all Americans.

    Anson

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    • Jim Wheeler says:

      Anson, your comments indicate to me that you didn’t read the report. I recommend you do – it’s just possible you could learn something new – I did.

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    • Jeff says:

      Ok. The average American spends $4000 a year on taxes for health care and then another $3000 a year on premiums and service. The average Canadian spends $4000 on health care in taxes and then they are done. I would say the average American could afford to switch places with the Canadians.

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      • Jim Wheeler says:

        Yes, Jeff, yes. In Canada the government holds down the pricing, just as our government does for Medicare and Medicaid, at least to the extent Congress permits. (Incredibly, Congress has prohibited Medicare from negotiating drug prices with Big Pharma.) Read the report, please.

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  4. henrygmorgan says:

    Jim: I have a very good friend who is the Chargemaster (the official title) at a local hospital. She says that the charges are predicated to a great extent on the effort to balance the expenses hospitals incur by treating uninsured patients, free of charge, which they are obligated to do by law. They are obligated to soak those who do have insurance in order to cover those who don’t. I have heard many politicians argue that there is no medical crisis because anybody can obtain medical services free at any hospital. This is a prime argument against providing single payer insurance programs administered by the evil, tyrannical Federal Government. I doubt that any physician or hospital administrator would agree.

    The black helicopters are coming! The black helicopters are coming.
    Bud

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    • Jim Wheeler says:

      Bud, I would love to talk with your Chargemaster friend, but I doubt if she would welcome the conversation. She is right of course to point to un-collectable bills as a reason for high pricing. The EMTALA law does ensure that hospitals can not refuse emergency care to any citizen, and I am well aware that many take advantage of that. It is not well known, I think, that EMTALA does not erase any legal financial obligation and that hospitals still attempt to collect, including “selling” the obligations to collection agencies.

      If hospital charges were actually related to real costs by any understandable formula, even if adjusted for EMTALA and incidentals, her hospital would have my sympathy, but I would be astonished if that were the case. Brill’s report indicates he hasn’t found any such.

      Thanks for your input, Bud.

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  5. Silly me — I saw the title Chargemaster — a term unfamiliar — and the picture of the cat scan — and thought this was going to be about some new technical medical device/machine called a chargemaster — wow, have I got a lot to learn. It’s the photo of the cat scan that threw me off, but I should not so easily be thrown, especially since I know that your posts are always worth scrutiny.
    We no longer get Time (we used to). I appreciate the link. Will read it more carefully. Why can’t Americans figure out how to solve a problem the rest of the world has already got right, or closer to right.

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    • Jim Wheeler says:

      Helen, I know that unlike one commenter below I can count on you to actually read the ground-breaking Brill article. After that you will never mistake the term “chargemaster” again. Guaranteed! Thanks.

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  6. ansonburlingame says:

    An EMTALA example, if you will.

    I have a friend with no insurance and little income by “normal standards”. He endured kidney stones and after 3 days of pure agony went to the ER. Total billed cost was about $4,000. His only possession of significance is his 10 year old truck. Had he not paid the bill he would have lost his truck. The bill got paid, by…….. (not me, but…..)

    My fully insured wife went to ER. Total bill was about $5700. Total, and I mean TOTAL, paid by Medicare and TCFL (military stuff) was $525, period. Bill “paid”, case closed.

    In my old line of work, the Navy, we called such things a Cluster F…… or something about monkeys and footballs!!

    Anson

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    • Jim Wheeler says:

      You still don’t get it, Anson. Or maybe you do, I’m not sure. I don’t see what this has to do with EMTALA because the bill was paid.

      I’ve never had a kidney stone but from what I read they are treated these days with ultrasound in a few hours on an outpatient basis, and probably with a machine that’s been paid-for many times over. So why the hell should that have cost $4,000? Maybe that’s your point – I hope it is – but if so, you’re preaching to the choir. The Brill report addresses just that – not who pays nor how to raise the money to pay but the more important question of WHY (at the risk of SHOUTING back at you) the costs of healthcare are so unreasonably HIGH. Your example is a good illustration of Brill’s other point too: NOBODY shops for healthcare! The capitalism marketplace does NOT apply – when you are in “agony” you do not shop around. There is only one way to deal with the problem sanely and that is to banish the chargemaster and have government control the costs. Read the report.

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  7. ansonburlingame says:

    When I support your views you tell me I don’t get it!!!

    EMTALA is a joke, a very expensive joke. So is “free HC for all” a joke as well. SOMEBODY must pay and the problem we confront today is NO ONE wants to be “somebody”, rich, poor or inbetween.

    It is the previous point made by me, NO ONE wants to pay for Medicare either, all of the money needed to pay for it. So we duck the issue and borrow from ….. to pay for Medicare alone.

    Now you tell me. HOW LONG can that go on as it has been “going on” since around 1965!!!

    But in your pleas for HC for All Americans you won’t even tell me how to pay for Medicare and seem to just want to pile on more and more government backed HC costs with NO ONE stepping up to the plate to PAY FOR THEM.

    I would add, now watch the public reaction to ACA in 2014 once “someone” starts “paying for” at least more (but certainly not all) HC costs. By 2016 MAYBE Americans will have figured out more details of “what is in that bill” once they start writing checks. SOMEDAY, chickens do indeed come home to roost.

    Anson

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    • Jim Wheeler says:

      I said I wasn’t sure whether you get it because your comment wasn’t clear.

      Yes, Anson, I agree that EMTALA is bad law, and that’s because it amounts to an unfunded mandate, a huge one, and yes, there is and always will be a resistance on the part of the public to pay for public programs like Medicare. But that doesn’t mean they can’t or won’t – the success of Social Security and, yes, Medicare itself, is proof that it can happen. But it is disingenuous to imply that Democrats want it for “free”, something you hammer on incessantly. That just isn’t true, it’s a straw man argument. I challenge you to cite one single instance where I or Duane have advocated not paying for it.

      One point made very well in the Brill report and one I have often made is that the cost of American healthcare can be halved, or better, by adopting some form of government system for everyone. The political challenge, one Congress is so far unwilling to meet, is to convince the body politic that it’s in their best interest to do that, and to pay for it.

      Have you read the report? It takes about an hour or hour and a half of dedicated reading. Are you up to it?

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  8. ansonburlingame says:

    I forgot to address kidney stones. I have never had them but my wife has so I have some experience along those lines. The patient is in agony, pure agony, worse than child birth I have been told, directly.

    The ultrasound you speak of is NOT an ER procedure. It is called a “lathtroscopy” or some such name. It requires full anesthisia and is performed in an operating room by a urologist. Takes a hour or so once they go to work and CAN cause all sorts of problems. It is like putting a high powered and active sonar against ones kidneys, to use a submarine metaphor and is a serious procedure to break up stones that will not otherwise pass, naturally.

    ER treatment is high fluid volumes and massive pain medication to relieve the agony and hopefully cause the stone to pass, naturally. Takes about 5 -6 hours but no specialist is required or operating rooms as well.

    ANYONE staying in an ER for 5-6 hours is going to get charged a bundle for sure and $4,000 was a “break” for the uninsured friend to whom I refered. But if he was only charged $525 just how long do you believe the ER would have remained financially “alive”? Just like my wife’s CAT scan was paid for at the rate of $66 total by Medicare/TCFL. Do that very long and no more CAT scans for anyone, in my view!!

    Anson

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    • Jim Wheeler says:

      Clearly, the Medical Industrial Complex has convinced you, Anson, that $4,000 was a reasonable charge for the sonic procedure, even a “break”. I couldn’t disagree more, it is chargemaster-outrageous. Read the Brill report.

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  9. Steven Brill is the guest right now on The Diane Rehm Show, talking about this Time cover story. You can listen live http://thedianerehmshow.org/ or listen to it later by clicking the date in her calendar. Brill is explaining the chargemaster. Anyone who didn’t finish this article is missing an opportunity to learn things we all need to know about our health care system. (I sent the link to a friend in Germany with the note, Europeans will never go through this.)

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  10. ansonburlingame says:

    And again,

    My point is NO ONE knows the “fair” price for an ER visit. Is $4,000 too much? Is $525 too little. But both were actually charged and paid.

    Several years ago, I purchased a Mercedes, a small one but still “expensive”. Recently I traded it in for a Prius and saved a lot of money, gas, car payments, maintenance, insurance, etc. in doing so. The point being of course was that I (and my wife) made our own CHOICE in the car we drove and what we could afford.

    Such forces were common place for HC when I was growing up. But since 1965 they are no longer made by HC consumers. Such consumers demand that government “fix it”.

    You say costs will go down by government decree, force if you will, if only we let government take charge, almost completely of such costs. My response is government STARTED doing so in 1965 and look what has happened to HC costs in the intervening years. Now you want government to complete that task, by and large and assume MORE government responsibility to pay for or “back up” the payment for all HC costs.

    You CLAIM they (HC costs) will go down if that happens. History in America tells me the exact opposite will happen. Government will take charge, so to speak, and what exactly will government borrowing look like, in the ten years after government completes its work? Far worse than it, borrowing, is today is my best guess.

    Anson

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    • Jim Wheeler says:

      You said,

      You said,

      NO ONE knows the “fair” price for an ER visit. Is $4,000 too much? Is $525 too little.

      Au contrair, Anson, this is not actually hard to compute, a fact you would know if you read the Brill article. I just looked up the cost of kidney treatment machines – they are called “extracorporeal lithotripters”, new and used (they’ve been around since the 1980’s). The highest cost listed was $100,000 but the average seems to be about half that. Here are my calculations for a generous charge:

      Assumptions:

      patients per day: 2 (conservative, I think)
      machine: $100,000, and estimating life of only 5 years, so $20,000 per year amortized, or $77 per work day (weekends excluded), so $38.50.
      technician: $50,000 a year plus 100% overhead costs equals about $48/hour times two hours equals about $100.
      doctor: assume 4 times the technician’s cost equals (being generous with 2 hours here) $400.
      profit: generous, at 25% (who makes that?)

      Sensible charge: $38.50 plus $100 plus $400 equals $538.50 times 1.25 equals $673.12

      Now, I’m sure we need to throw in a charge for a CAT scan for the diagnosis, something that takes the Dr. about 30 seconds to order. I haven’t researched that but having read the Brill article I know they are used like crazy and are virtual money machines. Let’s be generous and allow another $50 for that, so bring the total to $723.12.

      Now that wasn’t so hard, was it?

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    • Jim Wheeler says:

      By the way, relative to the lithotripter charge calculation, I can’t help noticing that if I were to reduce the Dr.’s time from two hours to one, which is probably more realistic (when has a Dr. recently spent more than 1/2 hour with you?), the total comes out almost identical to the Medicare number of $525. And I swear I didn’t try to do that, it just happened.

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  11. ansonburlingame says:

    The cost of the machine to perform a lithotriptoscopy is beside the point. It must be done in a full up operating theater, complete with all the attendant “actors” and it takes….. some time to do it, safely and effectively. Again, I don’t know what the cost should be, but that is beside the point, completely. My wife’s recent ER visit was for a blood flow problem, billed at $5,700. My friend had a kidney stone for which the bill was $4,000. They both spent about 5-6 hrs in the ER for two different problems. One paid $4,000 the other $525 ( actually zero cost to her or me).

    But as well my wife has had two lithotripses (spl?). One in Key West and one in Joplin over the last ten years. Both were done per an appointment schedule, not an ER visit and I have no recollection how much was billed and paid for either procedure. Why should I worry about such. The government paid for both procedures, lock, stock and barrel.

    There is a KEY point however. My wife (and I) paid zero for two operating room procedures that ulitmately relieved her pain and agony. My friend, had NO such procedures performed but his pain and agony was relieved as well during one ER visit which cost HIM $4,000. His stone passed naturally but my wife’s (twice) did not so pass and thus she needed……, later on after two ER visits, which again, she received at no personal cost.

    Everyone screams such is “unfair”. Some believe I don’t “deserve” my HC coverage, due only to my military service and a firm understanding that such HC would be paid for by government for the rest of my life. They propose to “take it away” from me and many others.

    Others want government to control the cost, even pick up the tab for my friend’s HC problems.

    And there we are stuck, right dead on top dead center in the national debate.

    Anson

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    • Jim Wheeler says:

      I frankly find it outrageous that you said,

      Again, I don’t know what the cost should be, but that is beside the point, completely.

      We are stuck in the national debate all right. If everyone in the public fails to heed the wisdom in the Brill report and stubbornly refuses to recognize that cost matters, as you do, then the American economy is doomed. I see now why you refuse to expend the effort to read the report – you aren’t interested, as you say, because it doesn’t affect you personally. I’m glad you clarified that.

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  12. Juan Don says:

    Jim,
    Thanks for providing the Brill link. Maybe one day (and hopefully soon) the country can have a reality-based conservation about our health-care system.

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    • Jim Wheeler says:

      Juan, I am frankly afraid that the public, to quote Jack Nicholson’s character in “A Few Good Men”, can’t handle the truth. If this historic report, clearly-written in plain English, can not because of political bias persuade educated professional people, then what hope is there? I think the problem is not so much a limited attention-span as that discourse has devolved into political warfare where emotion overwhelms reason. Thus, the will to consider alternate views is absent.

      I am currently reading “Hour of Peril” about Abraham Lincoln’s escape from assassination during his trip to his first inauguration, and it’s clear that the voting public then was probably even less literate and less perspicacious, than they are now. In 1861 the nation’s fate balanced on a knife edge and came down on the right side because of one unusual and superior politician. Then as now, racial bigotry was a principal factor. It could have gone either way, but chance favored the preservation of the nation. I think 2013’s situation is similar and I believe we have a chief executive who is up to the task, to the extent any human being can be. What I fear is lacking is the kind of luck we had back then that held the nation together. We are in the soup. Let’s hope I’m wrong and you are right because for now the Medical Industrial Complex is financially cannibalizing the country.

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      • Juan Don says:

        Jim,
        Unfortunately, discussions about the cost of health-care are hostage to partisan politics. An increasingly reactionary conservative movement derides the ACA, a market-based attempt to expand coverage and control costs, as socialism. As things stand today, it is difficult to see how anti-government radicals could ever endorse an expansion of Medicare or even begin to comprehend how adopting a single-payer system would free the private sector from unnecessary, exorbitant medical expenses. Stuck in an ideological rut, too many otherwise sensible people have succumbed to confirmation bias demagoguery.

        That said, the escalating costs associated with health-care are unsustainable. I’m cautiously optimistic that eventually the Medical Industrial Complex will implode under the weight of public scrutiny. Wouldn’t it be novel if our local paper published the Brill Report and solicited feedback from readers? At some point, defending the indefensible becomes a thankless task.

        BTW, “Hour of Peril” is on my book shopping wish list.

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        • Jim Wheeler says:

          I think the principal impediment to spreading the message of the report, John, is its own length. As beautifully written as it is I think it exceeds the attention span of even the average college graduate. I hope I’m wrong. Thanks for chiming in. 🙂

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  13. ansonburlingame says:

    Jim,

    You may either have missed my reply that I read the report of believe I am lying. As for the latter, just……!!!

    There is NO WAY that I can POSSIBLY determine the value of any medical procedure. You can’t do so either. I wonder if you have a spread sheet or even saved all your statements for the last ….. years for the amounts billed and paid by both Medicare and TCFL for you and Molly??? I haven’t done so for sure and thus have no factual idea how much Janet and I have “cost the taxpayers” over those years. I only KNOW it was FAR MORE than I have EVER paid into the “system” over both my working life and now retirement years. My guess is the same applies to anyone that has been on just Medicare (forget the other 20% paid for by TCFL in our cases).

    I cannot do the same calculation for auto insurance or homeowners insurance, either, figure out how much I have “paid in” to USAA over 50 years vs the claim payments received for various accidents or damages incurred over those same 50 years. But I DO get a “nice check” each year from USAA paying me an annual bonus each year out of their profits gained over the years and I bet you have done so as well. USAA makes a profit each year because I pay for insurance “peace of mind” each and every year, working and now retired. Do you now begrudge USAA for making such profits over the years? Is that a “greedy insurance company”?

    And Janet and I are not yet close to the real cost, the EOL costs as we continue to age.

    As well you and Molly are probably about 5 or 6 years older than Janet and me and thus have garnered a greater total for SS payments. Add them up (if you can) and compare that number to what you paid IN to the system over your working lifetime, just in terms of SS deductions from you paychecks over the years

    Paying in somewhere in the $2000 per year range for SS while working takes a lot of years working to pay for $20,000 per year (or so) in benefits after you turn 65 and live until you are……. That alone creates a huge negative number for a lot of people and is compensated only for those that “die young”.

    It would be interesting as well if both of us totalled up our entire federal income taxes paid over our lifetime and then deducted all of our military pay (active and retired) and the medical benefits (total cost) over the same years. For sure we would have taken far more from government (total) than we paid in over our lifetimes. That is the “cost of doing business” just in DOD spending alone and there are MILLIONS just like us today.

    Nothing you say or write these past few years have reached the level of outrage, as far as I am concerned. You have your views and I have mine and this is still a blog available to the public, therefore……..

    Anson

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    • Jim Wheeler says:

      Interesting. All this time you thought I was being concerned about our own little problems and not the country’s. You are applying it only to yourself and think I have somehow implied that people like you and me are undeserving of the deeply subsidized healthcare benefits our military careers supplied. That was never my intention, nor of course is it Steven Brill’s. This post is about the country, not you and me. How strange I should have to point this out. You need to expand your horizons, Anson.

      I’m glad you read the report and no, I did not see you say so, but given that, I don’t see how you can miss the central point which is that the costs for folks not as fortunate as we are unnecessarily bankrupting the country. My cost example wasn’t intended to mean that you personally should try to cost-analyze procedures you or Janet undergo – that wouldn’t make any sense, and no, I don’t do that for us. The point was that such analyses are not hard to do and can be used by the government to control the costs that are completely out of control now. Indeed, this is what Medicare now does, to the extent Congress will allow them. And, given that you have read the report, you must surely realize that chargemasters have no objective basis. The Medical Industrial Complex is skinning the country.

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  14. ansonburlingame says:

    OK Jim, back on track, maybe,

    Now go read Reich’s column in Sunday’s Globe. He makes the same point (unintentionally) that I am trying to make. Say a “guy” makes an average salary of $100K over a lifetime of working (or $50K a much better “average” estimate). We would contribute 6%, $6000 per year for 40 years for a total of $240,000 ( or $3000 per year and $120,000 total) for SS and Medicare.

    Just pay “him” SS benefits at around $20K per year. I will only take 12 years (6 years) to completely pay out all the money paid in over his working years. And that does not include ANY Medicare payments after “he” becomes 65 years of age. I don’t care what interest rate the “savings account” makes, “he” will quickly out spend any retirement benefits paid in over his working lifetime.

    That shows that simply because we all “paid in” does NOT mean the money is there to “pay out” for the rest of our lives, without government deficits incurred our of the “lock boxes” of SS and Medicare. So the money must come from elsewhere, in large amounts, $ Trillions if you will, for old age benefits to keep pace with such spending programs.

    In fact, as Reich points out, the money being paid in by current workers must go up to only continue to pay for “you and me” (and our wives and in my case ex-wife as well). To force contributions of the current work force AND “you and me” would be astronomical if that money was planned to cover the future requirements of the current work force as well.

    So again, the money must come from somewhere or the programs must be changed, period.

    My suggestion has been to raise the “rates” charged to participate in such programs to BEGIN to make them financially sound. And when unable due to politics to raise the rates charged high enough, in other words be unable, politically, to raise taxes high enough to pay for demands, well the only thing left to do is change the programs or eventually go bankrupt.

    Note I was able to make that very simple point without a word of “outrage”, etc. Pay as we go is what is needed in America, individually and collectively, it seems to me.

    Anson

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    • Jim Wheeler says:

      Robert Reich is not saying that SS and Medicare shouldn’t be fully funded, Anson, he’s saying that a sensible policy to expand legal immigration is the right way to get that done, at least for our lifetimes. What has been impeding that, despite even GOP leaders like George W. Bush and John McCain at times advocating it, is persistent right-wing paranoid thinking that all aliens are coming to take their precious jobs and rob them.

      Like

  15. ansonburlingame says:

    Jim,

    Reich pointed out a PROBLEM, the inability of current workers to sustain SS for “us”. I agreed with the statement of the problem, too little money coming in to continue to pay for SS in the future.

    Of course I object to his solution to such a problem, more immigrants. But that is a whole new discussion as to why I disagree with such a proposed solution.

    The money coming in for both SS and Medicare is not enough to keep the two programs sustainable. Solution? Get more money coming in or change the program and the differences (money in and money out) are HUGE over the coming years, $ Trillions (probably upon more $Trillions).

    Whole different subject, but….., I hope you watched 60 Minutes last night. The story of the pending “housing bubble” in China was remarkable, was it not, and scary as all get out for Chinese, who probably were not allowed to watch it. Talk about government spending run wild!!!

    Anson

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  16. Jim Wheeler says:

    The Steven Brill report “Bitter Pill” takes up most of the Time magazine issue and may be too lengthy for some readers, so if you are one such I would like to recommend an interesting (guaranteed) pod-cast that is about 20 minutes long. (Click on the large arrow at the top of the page to listen.) In this interview, author Brill summarizes his findings and also talks about some of the more interesting letters and emails he’s gotten since his ground-breaking article was published.

    Like

  17. ansonburlingame says:

    Ok, I labored through the article and now the podcast. Problem: Medical care costs too much but only for “some”. Solution: Everyone pay the same for all medical care, rich, poor and in between.

    How do “we” go about doing so, get medical charges equal for each and every patient so a “blood test” costs exactly the same for each and every patient, whether a “walk in” or a hospital patient experiencing EOL care in intensive care?

    Easy, some say, just let government negoitiate the cost of a “blood test”. Actually government has done that, sort of. If I am a Medicare patient, government only pays $X for a blood test, I would assume. So charge that same amount for everyone, by law, right?

    See how many hospitals remain open when that is taken care of is my retort or how many doctors still practice medicine.

    Sure an act of Congress COULD replace the “chargemaster” in each and every hospital, clinic, doctor’s office, etc. with ONE government approved chargemaster book. Just make it THE LAW!

    Then we can do the same for say automobiles which are too expensive as well, right, or big screen TVs, etc. as well. But I KNOW, autos are a choice but HC should not be such. People don’t need equal autos but they need equal HC or so you say as a liberal.

    But such a quest for equality did not even work under communism. Imagine every American today getting the HC provided in the Soviet Union for “the people”. Unless of course some of the people happened to be big shots in the communist party. You know as well as I do that such practices would NOT work in America. Implement equal HC for all across the board in America and just listen to the screams. Then we could read your blog about what say Billy Long gets for HIS HC, or Mitt Romney, etc.

    By and large, Jim, Americans pay around $2.8 Trillion per year for HC because they CHOOSE to pay that amount. Call it a market driven cost grudgingly paid, but screaming about it along the way as well. The call is for government to “do something about it”. In your scenario government will in fact bring that cost down to, well what exactly, maybe $1 Trillion or $1.5 Trillion, etc.

    Then sit back and listen to more screams or trips to Canada to get immediate relief instead of ……?

    I simply do NOT trust government to make those kind of choices for me or my family and I laid my own “plans” long ago to be able to make my own choices when the needs arose. I think that is called planning ahead and not just waiting for an emergency and scream for government to take care of it for me or my family.

    If some “kid” today THINKS ahead for about a “minute”, he or she should KNOW that HC is a BIG DEAL in a “minute or so” and make plans to confront that challenge NOW (Like staying in school, etc.) and not just expect government to “do more” so they don’t have to plan ahead.

    I did it, my kids did it my rather “poor” (financially only) friend Floyd did it, so I don’t really understand why “others” can’t “do it” as well without recourse to government doing it for them.

    I still await someone explaining to me why Medicare payment of $66 for a full CAT scan was “fair” as well. You see the whole “chargemaster” thing cuts in both directions. And no one knows the “right amount” to charge, for anything (except that “terrible” thing called a Market)

    Anson

    Like

    • Jim Wheeler says:

      Anson, I’m really glad you managed the onerous task of “laboring through the article and now the podcast”, but I can see you missed a significant point strongly made in both, i.e., that the nature of healthcare is not amenable to the capitalist market, something you choose to lecture me on as if we haven’t discussed it many times before.

      Are you saying the author is wrong when he says he isn’t inclined to go shopping for the best price when he has a heart attack, or when he seeks a diagnosis? That’s absurd. Nobody does that, Anson, nobody except those without decent health insurance that is, and they don’t bother to shop because they know in advance that fair prices don’t exist. Those either just do without or abandon themselves to EMTALA and a life of hopeless debt. And when you say,

      ” . . . Americans pay around $2.8 Trillion per year for HC because they CHOOSE to pay that amount. Call it a market driven cost grudgingly paid . . . “,

      you are ignoring reality, just as you did when I showed you how Medicare determines a fair market value. By the same token you choose to ignore the evidence Brill presents that the system loves Medicare, government rates and all, and takes all they can get of it.

      Fine, you are of course welcome to your opinion, as always, but I’d like you to know that I’m not inviting any more condescending tripe from you on this subject, including your inferences that I’m some kind of communist for advocating single-payer healthcare. I’m sure some of your many Conservative correspondents might enjoy a meal of it on your own blog. Go feed ’em.

      Like

  18. ansonburlingame says:

    A “wise person” shops for the best insurance money can buy long before the heart attack hits. Some people get such insurance for “free”. I recently went from two cars to one in our household, lowering car insurance costs was part of that motivation. And I haven’t had an auto claim in years!!

    Anson

    Like

  19. PiedType says:

    I can’t speak to the Brill report because I failed to get a printed copy and am loathe to tackle that much reading on the screen. However, several things occurred to me while reading the above discussion:
    1. Charging what the traffic will bear. That’s what profit-making industries do. “Actual cost” has little to do with it.
    2. Profit. Calculations of “actual cost” don’t include profit margin, but you can bet your bill includes it.
    3. Overhead. There are unseen costs the consumer can’t calculate, like the cost of electricity to power the hospital and everything in it.
    4. Shop around for health care. How does one shop around when the prices aren’t posted?
    5. Brill’s report. Groundbreaking, extensive, carefully researched, etc. But it’s still unlikely any one man has all the answers.
    6. Political will. That’s the real hang-up, isn’t it? Until the majority of politicians agree and then develop the political will to change the system, it’s not going to happen.

    Like

    • Jim Wheeler says:

      Thanks for your thoughtful comments, PT. I’m disappointed that the length of the report is onerously long for you but I’m positive you have a lot of company in that regard. But I suggest three points worthy of emphasis:

      1. Hospitals’ chargemasters have no objective basis. The price is whatever they arbitrarily decide.
      2. The marketplace for healthcare pricing simply doesn’t apply. Nobody shops for price when they’re hurting and desperate.
      3. Powerful lobbys are effective and healthcare companies have some of the most powerful. Politicians will be swayed by them and only a powerful surge of public awareness and opinion will change that.

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  20. Thanks for the post Jim. I am heading over there next to read the article. I am a long time medical professional with JRSmedical, and I am always looking at ways to sharpen my saw as it were in all things health care related. If the article is nearly as good as you claim it to be , I can’t wait to sink my teeth into it.

    Like

  21. I thought you would find this information interesting (recently released by the current administration): http://www.hhs.gov/news/press/2013pres/05/20130508a.html

    Like

    • Jim Wheeler says:

      Thanks, Indiana. I see this as a very promising development, needless to say. However, I’m frustrated because I can’t open the data set. It’s “too large” for my computer. What they need, obviously, is a web site on which consumers can search specific MS-DRG’s for their local hospitals. Until they get that, this is going to be wasted.

      I sent an email to one of the HHS public affairs people to this effect. Maybe if we all yell . . . ?

      BTW, nice to hear from you – hope all is going well in your new job.

      Like

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