America’s healthcare prices are absurd. So, now what?
NYT’s Elisabeth Rosenthal “start[ed] a very loud conversation” she hopes will be “difficult politically to ignore.” How did she do it?
It might be said that last year Americans finally began paying attention to the price of their healthcare. Maybe it was the focus on Obamacare, or the Great Cost Shift and the realization they now had to pay more of these out-of-the-ballpark prices themselves. But journalism deserves a lot of credit, too, for shattering that long-held, erroneous belief that whatever we pay is justified because we get high quality care in return. From work in legacy media—like Elisabeth Rosenthal’s ongoing New York Times series,“Paying Till It Hurts” and Steven Brill’s 2013 opus in Time—to social media like Reddit—from which a 20-year-old outraged Californian’s $55,000 bill for an appendectomy went viral late last year—journalism is helping the public realize the cost of care is simply too high.
I sat down with the Times’ Rosenthal, herself an emergency room doc, to talk about what journalists and the public can learn from her series, which began early last year and so far has included six major pieces and more than 10 follow-ups.
What inspired the series?
I was covering international environment and had just returned from the Arctic when editors asked if I wanted to cover the Affordable Care Act during the 2012 election. I didn’t want to do that and said so since I was pretty passionate about environmental issues and few others were covering them. But I said if you let me do a series on pricing and costs and why American medicine costs so much compared to the rest of the world, I’d drop everything to do it.
How does the public tend to look at medical costs?
People tend to look at the price tag for big ticket items such as the half million dollar cancer drug and express amazement; but then they just hope it won’t happen to them. I didn’t want to look at rare medical events but instead at encounters that everyone relates to. I wanted to get people energized to understand the costs and financial incentives. So I focused on ordinary procedures and conditions like colonoscopies, asthma, pregnancy, having a minor skin cancer removed, and getting stitches.
What was the main take-away you wanted for your readers?
I wanted them to understand the incentives that underlie the system and that inflate costs and force us to choose the most expensive way of doing things. I put a lot of thought into those market failures and how we got there. Someone once said we got the system those financial incentives were designed to create. My series started from there.
Forget ObamaCare
Vermont Wants to Bring Single Payer to America
by Sarah Kliff
April 9, 2014
Saskatchewan is a vast prairie province in the middle of Canada. It’s home to hockey great Gordie Howe and the world’s first curling museum. But Canadians know it for another reason: it’s the birthplace of the country’s single-payer health-care system.
In 1947, Saskatchewan began doing something very different from the rest of the country: it decided to pay the hospital bills for all residents. The system was popular and effective — and other provinces quickly took notice. Neighboring Alberta started a hospital insurance plan in 1950, and by 1961 all ten Canadian provinces provided hospital care. In 1966, Canada passed a national law that grew hospital insurance to a more comprehensive insurance plan like the one that exists today.
Saskatchewan showed that a single-payer health-care system can start small and scale big. And across the border, six decades later, Vermont wants to pull off something similar. The state is three years deep in the process of building a government-owned and -operated health insurance plan that, if it gets off the ground, will cover Vermont’s 620,000 residents — and maybe, eventually, all 300 million Americans.
"If Vermont gets single-payer health care right, which I believe we will, other states will follow," Vermont Gov. Peter Shumlin predicted in a recent interview. "If we screw it up, it will set back this effort for a long time. So I know we have a tremendous amount of responsibility, not only to Vermonters."
When Shumlin ran on a single-payer platform in 2010, it was unprecedented. No statewide candidate — not in Vermont, not anywhere — had campaigned on the issue, and with good political reason. Government-run health insurance is divisive. When the country began debating health reform in 2009, polls showed single-payer to be the least popular option.
Shumlin just barely sold Vermont voters on the plan (he beat his Republican opponent by less than one percentage point). Then, he got the Vermont legislature on board, too. On May 26, 2011, Shumlin signed Act 48, a law passed by the Vermont House and Senate that committed the state to building the country’s first single-payer system.
Now comes the big challenge: paying for it. Act 48 required Vermont to create a single-payer system by 2017. But the state hasn’t drafted a bill that spells out how to raise the approximately $2 billion a year Vermont needs to run the system. The state collects only $2.7 billion in tax revenue each year, so an additional $2 billion is a vexingly large sum to scrape together.
Shumlin knows what he’s up against. "I don’t underestimate the challenge," he said. "I know how hard this is, getting to the finish line. There are a thousand swords that could stab us in the heart. My question to the folks who wish for that to happen is, what’s your idea?"
Vermont’s case for single-payer health care can be summarized in one number: $82,975.
How does one doctor earn $21 million from Medicare?
One percent of doctors got more than 15 percent of Medicare payments
One percent of the 880,000 medical providers included in this study netted more than 15 percent of all Medicare payments in 2012, according to the New York Times' analysis of the data. That means fewer than 9,000 doctors managed to make more than $11 billion off Medicare.
That's an incredible concentration figure. The question is whether it represents great doctors meeting demand for their terrific work or providers who are bilking the system or overtreating their patients.
"Some of the scrutiny of the highest of the highest paid will focus on overuse," says Ethan Halm, a professor at the University of Texas Southwestern Medical Center, whose research focuses on health care quality. "If these small handful of eyeball surgeons are the highest paid, that could be a harbinger of overuse.
"But should we be surprised if the world's best pancreatic surgeon makes a lot per case, and does a lot of cases?"
What's new here: for the first time, we know what doctors actually spend their day doing.
By combing through the things that doctor asks Medicare to pay them for, you can see what your doctor is up to each day (yes, your doctor! The Wall Street Journal has a searchable database here).
"If I'm an internal medicine doctor, you might come to me for anything imaginable," says Bob Kocher, a former health care advisor to the White House. "Some poor psoriasis patient might come to me, and I've only seen seven people with psoriasis. Now, as a patient, you'll be able to use this data – or at least use tools built with this data – to know what does the doctor I'm about to visit actually do."
We have no idea why some doctors earn so much money
Seriously. No idea. This is the most important take away.
We do know huge variation in how much Medicare paid doctors in 2012. The highest-earning doctor was an ophthalmologist in West Palm Beach, Fla. who earned just shy of $21 million seeing 894 patients. The lowest-paid provider was an osteopath in Arizona who appears to have earned $2.29 (possibly a reconciliation payment to claims submitted last year).
Experts say we should be skeptical of the outliers, the people who say they're seeing way more patients than anyone else in their specialty. "If you're doing 100 times more of a procedure than any other doctor, that's a red flag," says Jennifer Schneider, who runs strategic analytics at transparency firm Castlight Health.
But for most other doctors, this data doesn't tell us whether high-earners are standouts in their profession – people who excel at complex surgeries, for example, – or if they're bilking the system.
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