Cancer Can Be Cured and Is Cured.
US HealthCareAs Brill discovered, each hospital has an internal price list called a
chargemaster, which contains every single item you may be given or come in
contact with during your hospital stay. That includes the little white paper
cup you get your medicine in, every box of tissue and band-aid, even a toy to
a child (which many mistake as a “gift”) can be billed at upwards of $200.
The problem is, no one quite knows how the prices in the chargemaster are
“It would seem to be an important document. However, I quickly found
that although every hospital has a chargemaster, officials treat it as if it
were an eccentric uncle living in the attic. Whenever I asked, they deflected
all conversation away from it...
I soon found that they have good reason to hope that outsiders pay no
attention to the chargemaster or the process that produces it. For there
seems to be no process, no rationale, behind the core document that is the
basis for hundreds of billions of dollars in health care bills... No
hospital’s chargemaster prices are consistent with those of any other
hospital, nor do they seem to be based on anything objective – like cost –
that any hospital executive I spoke with was able to explain. 'They were set
in cement a long time ago and just keep going up almost automatically,' says
one hospital chief financial officer with a shrug.
...That so few consumers seem to be aware of the chargemaster
demonstrates how well the health care industry has steered the debate from
why bills are so high to who should pay them... [T]he drag on our overall
economy that comes with taxpayers, employers and consumers spending so much
more than is spent in any other country for the same product is
unsustainable. Health care is eating away at our economy and our treasury.”
There is no real marketplace as such, as you the buyer is completely
separated from the seller. There’s absolutely no market feedback to regulate
and control the prices that are charged. For the most part the hospitals
charge as much as they want, which plays a large role on why these charges
have gotten so outrageously out of control. This simply doesn’t happen in
countries outside of the US.
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Nonprofit ProfitmakersAbout the only defense for the chargemaster rates Brill was able to get
was that it has to do with charity. John Gunn, chief operating officer of
Sloan-Kettering told Brill:
“We charge those rates so that when we get paid by a [wealthy]
uninsured person from overseas, it allows us to serve the poor.”
If this strikes you as nonsense, you’re not alone. Brill found two major
holes in that argument. The first one is the most obvious: The hospital is
not only charging those rates to wealthy medical tourists or “Saudi Sheiks,”
as Brill puts it. These chargemaster rates are billed to average uninsured
Americans who aren’t poor enough to qualify for the hospital’s financial
assistance program, and don’t qualify for Medicaid.
So in essence, middle-class Americans are being bankrupted to help pay
for the poor and the elderly while still allowing the hospital to rake in
massive profits and paying their executives some rather astounding salaries.
For example, at Montefiore Medical Center, a large nonprofit hospital system
in the Bronx, its chief executive has a salary of $4,065,000, the chief
financial officer of the hospital makes $3,243,000, the executive vice
president rakes in $2,220,000, and the head of the dental department makes a
not-so-shabby $1,798,000 per year. Similarly, 14 administrators at New York
City’s Memorial Sloan-Kettering Cancer Center are paid over $500,000 a year,
including six who make over $1 million.
“Second, there is the jaw-dropping difference between those list
prices and the hospitals’ costs, which enables these ostensibly nonprofit
institutions to produce high profits even after all the discounts,” Brill
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“...[N]o matter how steep the discounts, the chargemaster prices are
so high and so devoid of any calculation related to cost that the result is
uniquely American: thousands of nonprofit institutions have morphed into
high-profit, high-profile businesses that have the best of both worlds. They
have become entities akin to low-risk, must-have public utilities that
nonetheless pay their operators as if they were high-risk entrepreneurs.
As with the local electric company, customers must have the product
and can’t go elsewhere to buy it. They are steered to a hospital by their
insurance companies or doctors (whose practices may have a business alliance
with the hospital or even be owned by it). Or they end up there because there
isn’t any local competition. But unlike with the electric company, no
regulator caps hospital profits.”
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