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



221Comments
Feb 25, 2013 1:23PM
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One of the major problems is that medicare and medicaid pay pennies on the dollar for all care and procedures.  Private insurances base their payments on what medicare and medicaid pay.  If hospitals and doctors are living only off these types of payments, they can't make a living.  Take, for instance, the blood tests mentioned in the article.  The doctor has to order the tests. Someone has to draw the blood and get it to the lab.  Someone in the lab has to actually run the tests (using very expensive equipment).  Yet, the government only pays $13.94 for each tests. ( How can Obama justify raising the minimum wage and simultaneously decrease medicare and medicaid payments? that's for another comment)  The hospital cannot pay everyone in this situation and stay in business with these payment levels.  So it passes the costs on to private pay consumers. 
Feb 25, 2013 12:50PM
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My wife had surgery for a serious case of ulcerative colitis. 5 days in hospital with insurance was $68,000 and I had to pay a $5,000 deductable before anything was started. OK....

 

Here is what is COMPLETE BULLS###! When I looked over the bills coming in, it was absolutely amazing the frivilous and complete fraudulent charges from some of the doctors. There was several individual charges that were for $2,500, just for a doctor to come in and say "hello, how are you doing today, everything going good? How you feeling?" WHAT? $2,500 for what?

 

This IS what is wrong with the system!!! These doctors will falsely inflate, and manipulate, for their gains. This kind of crap IS what the government should be investigating and changing. NOT ObamaCare garbage that is going to bankrupt the country.

Feb 25, 2013 12:17PM
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Here's a thought - americans need to take responsibility for their own health and do a little preventive care.  Eat better, move more and quit blaming the government for not doing enough.  I know that won't take care of it all as disease is disease but please - don't wait for the government to bail you out when you've abused, smoked, drank and ate your way to what ails you!
Feb 25, 2013 11:26AM
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Go to prison.You and your family get 100% free healthcare, no co-pays,no deductibles.Meds

are free.

Feb 25, 2013 11:21AM
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Eliminate insurance and prices will drop like a rock...Oh wait, we just added 15 million non-payers to the the insurance rolls...  Dig deeper America!
Feb 25, 2013 9:53AM
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healthcar will never be fixed until this country "fixes" the income of medical doctors. currently the US is the only country an MD can routney become a milionaire. hence all the foreign MDs
Feb 25, 2013 9:02AM
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The AMA is the biggest union in the U.S. There is no competition, which means it's a monopoly. The only way to stop this rip off is to ban insurance altogether. When people have to pay cash, the prices will come down or the doctors will starve.
Feb 25, 2013 8:04AM
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If the weird weather is cuz God is mad...it is more likely because of the way we treat poor people not because of people sexual orientation
Feb 25, 2013 8:01AM
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But we are free, universal health care is like frogs in boiling water, don't let the commies get their hands on...huh?...what? this isn't Fox? oh....
bye...
Feb 25, 2013 3:40AM
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"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."

Very similarly, two years ago my doctor added a Vitamin D test to the other twelve tests in my every-three-month diabetic blood test.  The lab got my BCBS ID # wrong, their computer assumed I was uninsured and I got a $256 bill for that one test.  A 60-second phone call straightened out the problem and I soon got my Explanation of Benefits letter from BCBS: they had paid the lab in full $13 for the test.  And I have no copay for blood tests.
Feb 25, 2013 1:51AM
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The health-care problem has nothing to do with Obamacare, this problem has been going on for years and it's not going to get any better because congress do not have the balls to wright legislation that would cap and regulate the health-care industry. When you look at the two most important industries, The Financial Industry and the Health-care industry they both have a license to steal from the American public while our law makers do nothing accept make excuses for them. This country has lost it's moral obligation to greed. Our banks are stealing and our hospitals are dealing. And President Obama is the only one who even made an attempt to fix health-care while being challenge by our very own law makers because they are part of this scam.
Feb 25, 2013 12:21AM
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Bingo (Do What You Love), It is Healthcare reform we needed but Insurance reform we are being forced to accept. The healthcare problem just got worse not better. To (cd 1000), your statement “ a mindset that says we have to have whatever we want and the best of everything needs to be eliminated” is the most broken logic I have ever read, but the logic that Cuba, North Korea, most of China and Russia have pursued for decades.

 

The only people trying to eliminate choice, options and the free market forces are the lobbyist, they make great communist.

 

We have the technology, we have the brilliant minds, we have the mindset that built this Nation ‘better, faster, cheaper” We have the greatest American asset of all, a free society that embraces competition and problem solving-find a need fill a need. But all of this is being derailed by a Healthcare industry operating like a Healthcare dictator.

 

We can make more outstanding Doctors, we can build more state of the art hospitals, we can give every American the best Health care possible because most everybody stays healthy for a long time, but for the small percentage of Americans needing care at any given time it can be there and should be there-We CAN DO IT!

Feb 24, 2013 11:07PM
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Layers of lawyers upon lawyers then judges, then again lawyers.  And what is the most popular profession of politicians?  Yup lawyers.  America has 100 times more lawyers per capita than any country in the world.  How many lawyers does each senator or congressman have on their payrolls? Nothing legal is any longer accepted in this country unless it has been blessed by lawyers.  But lawyers can't even come close to guberment and what they extract from every medical transaction. I saw a girl buy a pack of cigs in the grocery line.  $9.29 and how much of that is the cost of producing that pack/  A gallon of gas?  A cable or cell phone bill?  It is all the guberment everywhere you try and conduct business. 

Feb 24, 2013 8:55PM
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We should refuse to pay and if they sue then we can sue them in a class action suit. No jury will force us to pay that prices.
Feb 24, 2013 8:40PM
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The healthcare system will never get fixed in this country.  There is too much money flowing into the politician's pockets.  One day there will be a revolution and when that happens I bet that the new constitution will dictate that healthcare costs be more uniform and more reasonable.  That is when it will get fixed, when this country ends and another takes its place.
Feb 24, 2013 5:07PM
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MXCROSS...I really don't think you have to wait for illegals, to get free healthcare...??
Feb 24, 2013 5:06PM
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Nobody wants to be Number # 200...?  Well okay, I'll break the jinx.

 

I say sue the Lawyers, Doctors, Hospitals and Insurance Companies.

Feb 24, 2013 3:39PM
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Number 7 should include the lobbying by the trial lawyers. Get rid of them and the doctors could do a better job.
Feb 24, 2013 10:48AM
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Comments about European "socialized" medical care made by the world traveler (above) are correct.  I remember years ago that we had to send patients who could afford to travel to France for a certain type of heart surgery not available here, to Switzerland for angioplasty and to Canada for certain drugs not approved in the U.S. yet (amiodarone). If you needed a long stent, they were available only outside the U.S. The "Time Magazine" description of the major reasons for our highly defective health care "system" are also very accurate. However, the person who faulted the AMA for this is just wrong.  No, I am not a member of the AMA. The AMA has very little influence in government relative to the hospital and pharmaceutical and insurance lobbyists.  The fault lies with our grossly corrupt Congress.  The prime goal of the members is to be re-elected not to serve the people. Since campaigns are of unlimited duration and not publicly financed, they always have their hands out for the bribes that the hospital industry, the insurance racket and the drug monopolies are eager to supply.  After all, it's your money that they spend. The best thing that could possibly happen in this Country to make our health care system more rational is to have universal Medicare.
The large, relatively healthy base of younger people who would use fewer of their premium dollars would sustain the system indefinitely. Congress, however, would have to allow Medicare to negotiate drug prices. The Republicans prevented Medicare from doing this. As to trial lawyers and frivolous law suits, I have yet to see a judge allow one to move forward. The very few that result in out-sized judgments are almost always set aside on appeal. 
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