7 massive problems with our health care system

A $21,000 bill for heartburn? Health care is bankrupting the country, and there's little we can do about it. Here's what caused this crisis.

By Kim Peterson Feb 22, 2013 3:27PM
The new American gold rush is at hospitals, where everything from X-rays to drug injections get marked up far beyond their actual value, Steven Brill of Time magazine reports in an amazing cover story out this week.

The prices we pay for health care are outrageous, and for those without health insurance, the costs are out of control. Consider the Connecticut woman who went to the hospital last year for chest pains only to find out it was a bad case of heartburn. She didn't have insurance, and Time reports that she got a bill for $21,000 -- $1,000 for the ambulance ride, $3,000 for doctors and $17,000 for a three-hour -- yes, three-hour -- hospital stay.
Her bill included charges for three protein-related blood tests at $199.50 each. Medicare would have paid $13.94 for each test at the same hospital, Time reports.

America spends 20% of its gross domestic product on health care. That's by far the most of any other country in the world.

How did things get this way? Why does medical help cost so much? Here are seven ways the system went off the rails:

1. No consistent pricing. Every hospital has an internal price list called a chargemaster, and none of those are consistent with each other, Brill reports. The prices keep going up almost automatically, a hospital executive tells the magazine.

2. Hospitals are consolidating.
They're also buying doctors' offices, which means they can have more leverage over pricing.Image: Surgeon with paperwork (Creatas Images/JupiterImages Corporation)

3. They use the expensive technology first. That heartburn patient received an $8,000 CT scan first instead of a regular stress test that the hospital bills at $1,200. Did the doctors need to go straight for the pricey stress test? By the way, the cardiologist reading that test charged $600 just to do that.

4. They test too much. Doctors in the U.S. run far more tests on patients than in other countries. One doctor describes it as "giving out CT scans like candy" in the emergency room.

5. They're scared of lawsuits. No one complains when a test ends up solving a mystery illness or improving medical care. But boy, doctors will hear about it if they pass on a test that could have helped. So doctors overtest to guard against potential lawsuits. "We can't be sued for doing too much," one doctor told the magazine.

6. We let it happen. As Brill noted when he went on The Daily Show this week, patients generally green-light the tests without knowing the costs and accept all of this because they have little choice. "You're an involuntary entrant into the marketplace," he told host Jon Stewart. "There is no marketplace in the most important sense of the definition, which is, does the buyer have any power at all?"

7. Congress is weak. The pharmaceutical and health care industries have spent $5.36 billion since 1998 on lobbying Congress, Brill reports. There's no better way to force the government to buckle under your will.

The 36-page Time magazine piece is one of the most important articles to come out in years. It's well worth a read.

More on moneyNOW



220Comments
Feb 22, 2013 4:27PM
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A major reason health costs in America are so high, is the high cost of malpractice insurance.  To safeguard themselves and keep their premiums as low as possible, doctors and hospitals have been forced to run all the tests and procedures on patients to avoid being sued.  When Congress or the courts or whoever is in charge puts a reasonable cap on damage awards, then you may start to see the costs go down, but it is doubtful.  Of course they will charge everyone else $200 for a test medicare pays only 14.  The real cost/value is probably somewhere in the middle, but they have to makeup for the underpayments they receive from the 900 gorilla...government.

 

This is also a major reason you skiers have to pay so much for your lift tickets these days.

Feb 22, 2013 4:22PM
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How much has the trial lawyers spent lobbying? The Dems are always pushing us toward Western European Socialism, however they never point us towards their legal system where the loser of a lawsuit pays attorney fees for both sides (which ends many frivilent lawsuits).
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Geez Liberal reporter????

Like the hospitals and doctors aren't ripping you off.

Everyone is affected, so stop acting like this is a liberal complaining about their bills.

Pray you never get sick or anyone you know goes broke due to just getting sick

Feb 22, 2013 4:18PM
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And all of you think its Obama? This S*** has been going on for way to long.
Feb 22, 2013 4:17PM
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Even the most ignorant and freeloaders are starting to understand the implications of Obamacare. Higher costs, reduced access, less treatment and the ones who thouht it would all be free are realizing illegals ar crowding them out of the emergency room.

The uneducated are also starting to wise up on how the current admin does math- most of them can add and subract at that level.

Feb 22, 2013 4:15PM
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Inflated prices on a sliding scale are just the start.
Even with Medicare, hospitals are finding and using "loopholes" to bill patients unreasonable amounts of money.

Feb 22, 2013 4:12PM
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LMFAO!!

"Daily Show"?  LOL!   Time Magazine!  LOL!  LOL!

This liberal reporter should find a new line of work!  LOL!
Feb 22, 2013 4:12PM
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Over 30 other nations learned a long time ago the only solution to skyrocketing costs was a Universal Health Care system. France today has the #1 rated health care system in the world for quality and affordable costs of care. They pay much less because they cut out the middle man, just $3,696 per year, while we pay on average $7,538, more than double for the same treatments. A Harvard university study estimates that 48,000 Americans die each year from treatable diseases, but without insurance they can't afford the care, this is the true American Death Panel, 48,000 per year.
Feb 22, 2013 4:09PM
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This is the one place where ObamaCare absolutely failed. I would have supported that legislation if it had done anything - anything at all - to address the cost of the services, rather than simply focusing on who's going to pay.
Feb 22, 2013 4:01PM
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Democrats, Socialist, Illegals, Lawyers, Medicaid, Medicare, HMO's
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