MANUFACTURED THEFT: The $1.5 trillion question!

WEDNESDAY, JUNE 28, 2017

Part 3—Amazingly, Rosenthal asks: Right at the start of her widely-ignored new book, Elisabeth Rosenthal asks the question which virtually never gets asked.

She starts by describing the crazy way Americans get billed for medical procedures. "In no other industry do prices for a product vary by a factor of ten depending on where it is purchased, as is the case for bills I’ve seen for echocardiograms, MRI scans, and blood tests to gauge thyroid function or vitamin D levels," Rosenthal writes.

The passage appears on page 2 of her new book, An American Sickness.

"The price of a Prius at a dealership in Princeton, New Jersey, is not five times higher than what you would pay for a Prius in Hackensack," Rosenthal writes as she continues. "The price of that car at the very same dealer doesn’t depend on your employer, or if you’re self-employed or unemployed. Why does it matter for health care?"

At this point, we're still on page 2 of this book. On page 3, Rosenthal starts to resort to the language of corporate crime as she describes these peculiar billing practices.

As she does, she asks a fundamental, foundational question. It's a question which never gets asked:

ROSENTHAL (page 3): We live in an age of medical wonders—transplants, gene therapy, lifesaving drugs and preventive strategies—but the health care system remains fantastically expensive, inefficient, bewildering, and inequitable. Faced with disease, we are all potential victims of medical extortion. The alarming statistics are incontrovertible and well known: the United States spends nearly one-fifth of its gross domestic product on health care, more than $3 trillion a year, about equivalent to the entire economy of France. For that, the U.S. health system generally delivers worse health outcomes than any other developed country, all of which spend on average about half what we do per person.

Who among us hasn’t opened a medical bill or an explanation of benefits statement and stared in disbelief at terrifying numbers? Who hasn’t puzzled over an insurance policy’s rules of co-payments, deductibles, “in-network” and “out-of-network” payments—only to surrender in frustration and write a check, perhaps under threat of collection? Who hasn’t wondered over, say, a $500 bill for a basic blood test, a $5,000 bill for three stitches in an emergency room, a $50,000 bill for minor outpatient foot surgery, or a $500,000 bill for three days in the hospital after a heart attack?

Where is all that money going?

"Where is all that money going?" At this site, we've been asking that foundational question for years.

Already, on page 3, Rosenthal has asked that foundational question. Truth to tell, it's the most basic question in all of American governance.

That question lies at the heart of the basic problems our federal government can't seem to resolve. It's a question which, by common agreement, essentially never gets asked.

Warning! We're not saying that Rosenthal asks this question in the most skillful way. For our money, she presents that foundational question in a way which is hopelessly murky.

Speaking the language of corporate crime, she has already suggested that our health care systems is built on a foundation of "medical extortion." But she offers a clumsy account of the vast sum which is disappearing into the maws of this system every year.

Is our health care system really based on acts of "extortion?" As a doctor's kid, as a doctor herself and as a health care reporter, has Rosenthal really "had a lifetime front-row seat to a slow-moving heist," as she declares on page 4?

Do American hospitals constitute "an extractive industry" (page 24), whose behavior can be compared to that of bank robbers?
According to Rosenthal, that's where all that money is going! But on page 3, she does a fairly lousy job establishing her basic foundational question.

Where is all that money going? In the following passage, Rosenthal describes the money to which she refers—the money which is being looted out of our health care system. In our view, this is very murky work:

"The alarming statistics are incontrovertible and well known: the United States spends nearly one-fifth of its gross domestic product on health care, more than $3 trillion a year, about equivalent to the entire economy of France."

It would be hard to establish her basic question in a less compelling way. Let's note a few problems:

First, those alarming statistics are not well known among the American public. Go ahead! Stop a hundred pedestrians today. Ask them what portion of our "gross domestic product" is spent on health care each year.

Ask them how many dollars our nation spends on health care each year. Ask them to compare that amount to the entire economy of France!

You're going to get a lot of stares if you start posing those questions. Rosenthal does a terrible job describing the amount of money which is getting looted in the course of the "slow-moving heist" she admirably describes.

Rosenthal asks the foundational question: "Where is all that money going?" It seems to us that this would be a much better way establish the size of the problem:

Per capita spending, health care, 2015
United States: $9451
Canada: $4608
France: $4407
Japan: $4150
United Kingdom: $4003

Good God! Five thousand dollars per person per year is disappearing into the maws of that slow-moving heist! That's the mountain of missing money to which Rosenthal's question refers.

Those numbers dramatize Rosenthal's rather bureaucratic claim (see above): other nations' health systems "all...spend on average about half what we do per person." In the course of a 400-page book, Rosenthal never presents them.

At any rate, those remarkable data help us see why our nation has so much trouble providing health care to all its citizens. Because of all that looting, a year of health care costs more than twice as much in this country as it does everywhere else!

In our view, Rosenthal does a very poor job establishing the size of this looting. On the other hand, she aggressively asks the foundational question, the question which never gets asked:

Where's all that money going?

That is our government's foundational question. That question underlies our endless health care debacle and our federal deficit problems.

Rachel and Lawrence know not to ask it. Rosenthal asks the question straight out, right on page 3 of her book!

Having asked the foundational question, Rosenthal proceeds to an anecdotal answer. Her story starts on page 11, at the start of her Chapter 1.

Her story involves Jeffrey Kivi, a high school chemistry teacher in New York City with a potentially disabling condition called psoriatic arthritis. Absent treatment, the condition could leave Kivi "unable to work and even walk."

Enter our "extractive" health care system! Rosenthal starts her story in the fairly recent past:

ROSENTHAL (page 11): About fifteen years ago, important new arthritis drugs hit the market. His rheumatologist, Dr. Paula Rackoff, said he was a good candidate. The medicine worked wonders: every six weeks, a drug called Remicade was infused into his veins in an outpatient clinic at Beth Israel Hospital, where Dr. Rackoff practiced. The treatment cost $19,000 each visit, but Mr. Kivi, as a New York City civil servant, has excellent insurance under EmblemHealth. He paid nothing himself.

"The results were transformative," Rosenthal writes. Kivi was able to continue his life and his career.

For ourselves, we were already wondering, at this point, why a one-day, outpatient treatment would cost anything like that much. As it turns out, that shows how clueless we are.

In 2013, Dr. Rackoff moved her practice about fifteen blocks to NYU Langone Medical Center. Kivi began going there for the exact same treatments. Only one thing had changed:

ROSENTHAL (page 12): At first, [Kivi] was impressed by the Langone Center for Musculoskeletal Care, where services were distinctly more upmarket...

But the charges that started posting on his insurance Web site, as submitted by NYU, shocked him: the first three-hour infusion at the new hospital, in may, was billed at $98,579.98, the second in June at $110,410.82, and from July on they were billed at $132,791.04. It was the same dose as always, in the same form, prescribed by the same doctor.

Where was all that money going? Rosenthal describes what happened when she and Kivi tried to find out.

Why was a $19,000 treatment now being billed at $132,000? According to Rosenthal, "When Mr. Kivi complained to the NYU billing office, a patient-care representative offered a range of nonexplanations." She quotes Kivi describing the curious things he was told, then reports her own experience:

ROSENTHAL (page 13): When I tried to pick up the investigation where Mr. Kivi left off, the explanations got even less convincing. The public affairs department told me Mr. Kivi was an "outlier" because he was getting aggressive treatment and he is large. Remicade is dosed according to weight and, at over six feet and nearly four hundred pounds, Mr. Kivi does get a relatively large dose. But even so, the wholesale price of Mr. Kivi's dose of Remicade should have been about $1,200, a drug researcher at another hospital told me.

As we slid down the rabbit hole of medical pricing, things only got darker and darker...

The treatment had cost $19,000 fifteen blocks down the street. Fifteen blocks to the north, the billing price jumped to $132,000. The insurance company ended up paying $99,593.27 for each treatment.

According to Rosenthal, these are the types of "heists" which occur within our own homegrown "extractive industry." Presumably, she featured this heist because it's especially dramatic.

That said, when heist is piled upon heist, $5000 per person per year disappears within our health care system. As a result, our nation, alone among its peers, becomes a pitiful helpless giant.

We become a clownish society locked in clownish "health care debates" of the type we're currently experiencing. Clownishly, we can't provide universal health care, and we can't seem to get control of our federal budgets!

Despite their fiercely progressive views, Rachel and Lawrence won't talk about this on their popular "cable news" programs. Instead, they entertain us with a succession of chases, for example against a governor who once said that he enjoyed touching his girl friend's breasts.

Our darling Rachel won't talk about this. Does anyone understand why?

Tomorrow: Rosenthal ignored, disappeared