Despite President Barack Obama's sweeping health care legislation, medical costs continue to rise every year in the U.S. This week's TIME cover story "Bitter Pill: Why medical bills are killing us" takes an exhaustive look at exactly why the bills are piling so high for so many Americans.
According to the report, published in partnership with CNN, the U.S. will spend roughly $2.8 trillion on health care this year. That is 27% more per capita than most other developed nations, which amounts to an extra $750 billion. TIME magazine contributor Steven Brill joins “Starting Point” to discuss his story and break down the exorbitant health care costs.
In his research, Brill found that two economies exist in this country: one comprised of regular Americans, and the other is the health care economy. The health care economy 'is prospering, it's thriving, adding jobs all the time, everybody's making money,” Brill says.
“GE is making money on CAT scans, and your favorite local hospital you think is non-profit hospital is making tens and hundreds of thousands of dollars a year,” he says.
Early on in his article, Brill discusses the “chargemaster,” which is a “7,000, 10,000 item schedule of fees so everything that happens to you at the hospital whether it's outpatient or inpatient or even in a lab has a charge.” He explains, “If someone hands you a tissue that might be $1 or $2. If you get...a blood test that is totally routine, which costs the hospital basically nothing, that could be $150 at one hospital, it could be $250 at another hospital. Nobody can explain why.”
Brill says that besides the hospital and doctors, an insurance company will also get a discount off the chargemaster. “But your insurance company will probably get a 40% discount, maybe a 50% discount, but a 50% discount off of a $25 bill for Niacin is still a lot of money for the hospital,” he says.
Brill adds that “the hospital CEOs are making $2, $3, $5 million a year. The hospitals are making exorbitant profits and the fundraiser you go to probably accounts for one half of 1% of their revenue. The real revenue is from the Niacin pills but it’s also from the cancer drugs where they might charge the patient $10,000 or $11,000. It might cost them $4,000 and it might cost the drug company $100 or $200.”