EYES WIDE SHUT: Muckrakers down!

FRIDAY, AUGUST 16, 2013

Part 4—Plutocrats’ tone of voice: Why is no one talking about Elisabeth Rosenthal’s series?

Her reports have been appearing on the front page of the New York Times, a well-known American newspaper. Her first three reports have been very lengthy, quite detailed.

So far, this is the rundown:

Sunday, June 2: “The $2.7 Trillion Medical Bill.” 4165 words
Monday, July 1: “American Way of Birth, Costliest in the World.” 3176 words
Sunday, August 4: “In Need of a New Hip, but Priced Out of the U.S.” 3792 words

These articles deal with a very important topic—the massive looting of U.S. consumers which characterizes American health care. This looting helps explain a welter of major social and political problems—our nation’s growing income inequality; our stagnant wages; the failure to provide full medical coverage; the nation’s problems with federal deficits and debt.

But so what? Despite their high profile and apparent salience, Rosenthal’s reports have met with universal silence, except for last week’s Fresh Air.

In fairness, the pundit corps keeps feeding us our steady diet of weiner. The alert us to the misbehavior of the nation’s rodeo clowns.

Our “corporate progressive” TV stars cluck like chickens and fake townie accents. They issue clownishly pompous predictions.

They then get mocked on The Daily Show for the clownish prediction with which they have failed in the past.

They helped invent the phony facts about the Zimmerman trial, thereby pleasing our fake, phony souls. But Rosenthal’s name hasn’t even been mentioned on The One True Liberal Channel—not by Rachel; not by either Chris; not by Al (you can call his “Rev”); not even by the fiery Lawrence, with the manifest street cred he brings to his various breakdowns.

Why have none of these fiery figures even mentioned the Rosenthal series? It’s going to win the Pulitzer Prize—and it’s going to do so in silence!

Despite the high profile afforded this series, the silence has been general all over the press, which seems paralyzed, dead in life. At the end of this report, we’ll offer our own speculations about the resounding silence.

But some of the silence may result from Rosenthal’s strange tone of voice. In a break from traditional press practice, she has been obsessively deferential to apparent criminal conduct as she presents her reports.

Her August 4 report broke the bank. Consider what she seems to have said.

Rosenthal seems to have said the following, although we’re still not entirely sure, due to her lack of a pulse:

She seems to have said that it costs $350 to manufacture an artificial hip in this country. But she plainly says that when Al Shopenn of Boulder, Colorado shopped around for such a device, he was told he’d be able to pay “list price”—$13,000!

(According to what Rosenthal seems to have said, that would have been the charge to Shopenn for the device alone. Hospital fees would have added an additional $65,000 to his bill. And that wouldn’t include the surgeon’s fees, which Rosenthal didn’t estimate.)

According to Rosenthal, that $13,000 price tag would have been a bargain! “While Mr. Shopenn was offered an implant in the United States for $13,000, many privately insured patients are billed two to nearly three times that amount,” she wrote, seeming to describe a device which costs $350 to make.

Can that possibly be what Rosenthal said? Did she actually say it costs $350 to manufacture the hip, but patients may be billed $26,000, or more, for that very device? Did she really say that Shopenn would have been required to pay $13,000 for his?

That seems to be what Rosenthal said, but her tone is so impassive that we keep thinking we must be misreading her text. The text of her front-page report seems to describe a crime. But her tone of voice seems to come direct from Stepford Memorial.

As William Bennett used to say, “Where’s the #$%^& outrage?” We keep thinking of that quote when we read Rosenthal’s text.

Rosenthal seems to realize that her statements about that device require a bit of explaining. But as she continues, her tone of voice betrays no sense that she is describing a medical outrage—an act of medical looting that ought to shock the conscience.

Even as she poses her basic question, she seems to have no human sense of what it is that she is describing. On the brighter side, a human ear can perhaps discern the comedy found lurking here:

ROSENTHAL (8/4/13): An artificial hip, however, costs only about $350 to manufacture in the United States, according to Dr. Blair Rhode, an orthopedist and entrepreneur whose company is developing generic implants. In Asia, it costs about $150, though some quality control issues could arise there, he said.

So why are implant list prices so high, and rising by more than 5 percent a year?

A $350 medical item is being sold for $13,000 to $35,000. At the Times, Rosenthal adds an important point: Those prices are rising, by five percent a year!

Yes, you're allowed to laugh! When we read that, we felt we were listening to Siddhartha before he looked out past the palace.

As she continues, Rosenthal matter-of-factly explains the reasons for the vast financial scam she’s discussing. Her matter-of-tact tone of voice helps us see that she simply can’t register it as such:

ROSENTHAL: An artificial hip, however, costs only about $350 to manufacture in the United States, according to Dr. Blair Rhode...

So why are implant list prices so high, and rising by more than 5 percent a year?

In the United States, nearly all hip and knee implants—sterilized pieces of tooled metal, plastic or ceramics—are made by five companies, which some economists describe as a cartel. Manufacturers tweak old models and patent the changes as new products, with ever-bigger price tags.

Generic or foreign-made joint implants have been kept out of the United States by trade policy, patents and an expensive Food and Drug Administration approval process that deters start-ups from entering the market. The ''companies defend this turf ferociously,'' said Dr. Peter M. Cram, a physician at the University of Iowa medical school who studies the costs of health care.

Though the five companies make similar models, each cultivates intense brand loyalty through financial ties to surgeons and the use of a different tool kit and operating system for the installation of its products; orthopedists typically stay with the system they learned on. The thousands of hospitals and clinics that purchase implants try to bargain for deep discounts from manufacturers, but they have limited leverage since each buys a relatively small quantity from any one company.

In addition, device makers typically require doctors' groups and hospitals to sign nondisclosure agreements about prices, which means institutions do not know what their competitors are paying. This secrecy erodes bargaining power and has allowed a small industry of profit-taking middlemen to flourish: joint implant purchasing consultants, implant billing companies, joint brokers. There are as many as 13 layers of vendors between the physician and the patient for a hip replacement, according to Kate Willhite, a former executive director of the Manitowoc Surgery Center in Wisconsin.

Hospitals and orthopedic clinics typically pay $4,500 to $7,500 for an artificial hip, according to MD Buyline and Orthopedic Network News, which track device pricing. But those numbers balloon with the cost of installation equipment and all the intermediaries' fees, including an often hefty hospital markup.

That is why the hip implant for Joe Catugno, a patient at the Hospital for Joint Diseases in New York, accounted for nearly $37,000 of his approximately $100,000 hospital bill; Cigna, his insurer, paid close to $70,000 of the charges. At Mills-Peninsula Health Services in San Mateo, Calif., Susan Foley's artificial knee, which costs about the same as a hip joint, was billed at $26,000 in a total hospital tally of $112,317. The components of Sonja Nelson's hip at Sacred Heart Hospital in Pensacola, Fla., accounted for $30,581 of her $50,935 hospital bill. Insurers negotiate discounts on those charges, and patients have limited responsibility for the differences.

The basic design of artificial joints has not changed for decades. But increased volume—about one million knee and hip replacements are performed in the United States annually—and competition have not lowered prices, as would typically happen with products like clothes or cars. ''There are a bunch of implants that are reasonably similar,'' said James C. Robinson, a health economist at the University of California, Berkeley. ”That should be great for the consumer, but it isn't.”

”That should be great for the consumer, but it isn't,” Rosenthal quotes a professor saying. She is explaining why a consumer named Joe Catugno paid $37,000 for an item it costs $350 to manufacture.

Speaking of sterilized pieces of metal, be sure to focus on Rosenthal’s tone as she matter-of-factly explains this astonishing act of looting. Rosenthal goes on from there, further explaining a practice she calls “sticky pricing.” She quotes a long-time industry employee who bullshits about the reasons for the astonishing prices.

After that, we’re told that American hospitals pay an average of $8000 for Shopenn’s type of hip implant, while hospitals in Belgium pay $4000. This represents a tiny attempt to explain the (shocking) statistics with which this report began:

Shopenn would have paid $78,000 (plus surgeon’s fees) had he been treated in the U.S. In Belgium, the entire operation cost $13,660.

As you fight your way through Rosenthal’s piece, please note its measured tone. Rosenthal never betrays a sense that she is discussing a giant outrage—an outrage that is exponentially worse when we understand that it’s a medical outrage.

She isn’t discussing a mark-up on luxury cars, or on Jim Garland’s “pleasure yachts” (links below). She is discussing outlandish price-gouging on the ability of average people to walk.

But nothing gets this journalist’s gorge as this outrageous story unfolds. Very, very late in her piece, she manages to mention the matters which follow.

Note how quickly the buying of Congress is melded into something else. Note the astonishing industry practices this journalist decided to bury very deep in her piece:

ROSENTHAL: Device makers have used some of their profits to lobby Congress and to buy brand loyalty. In 2007, joint makers paid $311 million to settle Justice Department accusations that they were paying kickbacks to surgeons who used their devices; Zimmer paid the biggest fine, $169.5 million. That year, nearly 1,000 orthopedists in the United States received a total of about $200 million in payments from joint manufacturers for consulting, royalties and other activities, according to data released as part of the settlement.

Despite that penalty, payments continued, according to a paper published in The Archives of Internal Medicine in 2011. While some of the orthopedists are doing research for the companies, the roles of others is unclear, said Dr. Cram, one of the study's authors.

Although only a tiny percentage of orthopedists receive payments directly from manufacturers, the web of connections is nonetheless tangled.

Companies ''build a personal relationship with the doctor,'' said Professor Robinson, the Berkeley economist. ''The companies hire sales reps who are good at engineering and good at golf. They bring suitcases into the operating room,'' advising which tools might work best among the hundreds they carry, he said. And some studies have shown that operations attended by a company representative are more likely to use more and costlier medical equipment. While some hospitals have banned manufacturers' representatives from the operating room, or have at least blocked salesmanship there, most have not.

Are you kidding? “While some hospitals have banned manufacturers' representatives from the operating room, or have at least blocked salesmanship there, most have not?”

This astonishing statement appears in paragraph 44 of Rosenthal’s report. Earlier, the “lobbying” of Congress disappeared in less than one sentence.

Rosenthal’s pulse never starts to race as she describes this astonishing conduct. In truth, her pulse is rarely discernible. But by the normal traditions of American journalism, she is describing heinous behavior—heinous acts of looting, accompanied and enabled by heinous industry practices.

She’s also discussing the purchase of Congress. That’s covered in less than one sentence.

By normal traditions of American journalism, dating back (let’s say) to the muckrakers, Elisabeth Rosenthal’s bloodless report would have been handled quite differently. Those astonishing industry practices would have featured in the lede of the piece. The buying of Congress would have been cited there too—possibly even reported in detail, with some names included.

No one would have been forced to wonder if Rosenthal meant what she seemed to be saying—that Shopenn would have been charged $13,000 for a $350 device, just for the right to walk around. No one would have wondered what happened to Rosenthal’s pulse, and to her tone of voice.

What are the traditional practices of American journalism? In the week before this report appeared, Anderson Cooper was raking some muck on his CNN program. The loud Drew Griffin was on hand to embarrass some minor officials.

The traditional tone of American journalism could be discerned as Cooper began the second night of his report. Because he was dealing with rather small targets, Cooper could almost be strident:

COOPER (7/30/13): We begin tonight Keeping Them Honest, with part two in our special investigative series, "Rehab Racket." We're talking about shady rehab clinics filing bogus claims for phantom patients.

It's happening in the state of California, but because it involves federal Medicaid funding, we're all paying for it, nearly $186 million in state and federal tax dollars over just the last two years. A yearlong investigation by CNN and the Center for Investigative Reporting lays it all out, unscrupulous operators billing the government for bogus clients and getting away with it, but maybe not much longer.

In the wake of our reporting, we learned today that 29 clinics have been temporarily suspended, cutting them off from state and federal money and there is a state senator who after seeing last night's report is now calling for a full audit of the program. We will talk to him shortly.

But first, part two of the investigation, how teenagers say they were roped into the operation. Drew Griffin tonight, Keeping Them Honest.

Somehow, Cooper managed to identify “shady” clinics which were being run by “unscrupulous” operators. He knew a “racket” when he saw one.

He could see that those shady players were “getting away with” their scams.

At this point, Griffin began to thunder, piggybacking on Cooper’s tone. A cynic would say that Griffin’s strident tone was enabled by the small size of his targets.

CNN was right to go after those targets, of course. But Griffin was chasing $90 million per year and a few state officials. In Rosenthal’s series, she is discussing a much larger network of scams.

Rosenthal is chasing looting on the scale of more than $1 trillion per year! Perhaps for that reason, she has respectfully lowered her voice and pulled in her head like a turtle.

Next year, she will be handed a Pulitzer Prize. Out in the country, no one will know about her reports. Absolutely no one will care.

A few speculations:

Rosenthal’s lack of a pulse may be part of modern Potemkin journalism, in which very large journalistic interests bow to other sources of very large power. Her editors may have insisted.

For years, the New York Times and other big orgs have heroically avoided the gigantic topic this front-page series pretends to pursue. Now, the Times seems to be pursuing that topic in a modern, Potemkin manner:

This series seems designed to win the grand prize and to make nobody mad.

That said, why haven’t the fiery children on The One Channel rushed to tell you about this series? Why haven't they filled in the blanks, adding the appropriate sense of outrage?

We’ll explore such topics all next week in our award-winning series, “The Rodeo Clowns.” Just for today, we’ll offer a possible answer:

The fiery children are deep in the bag—and yes, that includes your Darling Rachel, with all her fucking barnyard sounds and all her self-adoration. Also Lawrence, with his unmistakable Boston/Dorchester cred!

Do the fiery children work for The Man? Are the kids, who possibly do want your millions, possibly running a bit of a scam?

Have they turned their backs on the muckrakers too? People, we’re just asking questions!

We don’t want your millions, Mister: To hear Jim Garland sing his song at Newport 1963, just click here, then click again.

Lyrics can be instructive too. For a version of same, click here.