Skyrocketing Health Care Costs Caused by Political Corruption

By Steven I Weissman. For Center for Health Journalism.

I am going public to reveal the astonishing truth. There is a simple way to instantly, with ease, end our nation’s health cost misery!

When the founder of a Miami area hospital, who was a longtime friend and client died, I became interim president. The insider’s view of the healthcare system is enough to make anyone sick.

Healthcare is the only industry exempt from the rigors of the U.S. free market system. Ask the price of any healthcare service and you will always receive the same answer: “What insurance do you have?” Billing is determined by how much can be extracted from each patient on a case by case basis. It is a predatory system that is built on the destruction of free market economics through political influence.

Value and market price are entirely irrelevant concepts. Patients who are out of network or uninsured are routinely charged 10X more than “normal” rates. This is fraud in any business – except health care.

Because there are no actual prices for medical services, there is no price competition. Without price competition, there is little resistance to charges that continually skyrocket far in excess of the inflation rate.

Price gouged consumers have no practical way to defend themselves against unreasonable medical bills. Litigation entails retaining an attorney plus an expert witness to testify regarding the reasonableness of the amount billed. In virtually every case, the cost of litigation makes defense against medical price gouging impractical. The result is health costs are the leading cause of personal bankruptcy.

Last summer, the New York Department of Consumer Affairs made national headlines when it forced Whole Foods to admit the company short-weighted customers. Our government employs thousands to protect consumers from being bamboozled on an ounce of ham, gasoline or for a fraction of a percent on a mortgage or credit card loan. However, when it comes to healthcare pricing, consumers are abandoned and health providers are shielded from free market competition.

How did we end up with predatory healthcare pricing? Pricing has been rigged by the industry that pumps, by far, the most cash into Washington. The healthcare industry spends more on lobbying than the defense, aerospace, and the oil and gas industries combined. Morally corrupt politicians have allowed the industry to foist upon our nation the highest cost medical care on earth, by a margin of at least 50% per-capita, while providing significantly lower quality than exists in other wealthy nations.

The currently fashionable concept of price transparency will not ameliorate the health cost crisis. A simple blood test for cholesterol can range from $10 to $400 or more at the same lab. Hospitalization for chest pain can result in a bill from the same hospital for the same services ranging anywhere from $3,000 to $25,000 or more. Transparency would merely show that each healthcare provider charges extraordinarily wide-ranging different prices for each service it provides and continue to sow price confusion.

Laws requiring health providers to publish price ranges or average prices are growing in popularity. Such so called “price transparency” serves as a public relations gimmick to relieve ever mounting public pressure on elected representatives. Simply put, each of us is entitled to know the actual price we will be charged for our healthcare. Limiting disclosure to price ranges or averages, while permitting providers to predatorily bill each person a different amount, unfairly benefits providers at the expense of all patients.

The solution is for Congress to require healthcare providers to publish actual prices, just like all other businesses. All patients, insured and uninsured, should be billed the same published rate for the same service. Hospitals, physicians and labs should have continued freedom to set their own prices, but predatory pricing — a different rate for each patient — must end.

When rates are set, patients will be able to shop for good healthcare value. Providers will be forced to compete based on price, quality and service. Healthcare costs will plummet. The cost of health insurance, which is simply a direct function of underlying medical costs, will plummet as well.

Requiring actual healthcare pricing — the essential ingredient of a free and competitive market — is the only thing necessary to instantly cure our sick healthcare system. It really is simple.

Public pressure on politicians is essential to bringing this horrendous abuse to an end.

June 21, 2016

Steven I. Weissman is a former hospital president and an attorney practicing law in South Florida. He handles healthcare, complex commercial litigation and tax matters and is of counsel to the firm. In addition to his extensive litigation experience, Steve served as president of an acute care hospital during 2013-14 and practices law in Cooper City. He has written articles appearing in The Florida Bar Journal, Journal of State Taxation, and Trusts & Estates, and served as an adjunct professor at both the University of Miami School of Law and Nova University Graduate Management Program.

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