EYES WIDE SHUT: Did Elisabeth Rosenthal actually say that?


Part 3—In search of a pulse: By all accounts, the New York Times’ Elisabeth Rosenthal is on her way to a Pulitzer Prize in April 2013.

She’s doing this without blowing cover, and without a discernible pulse.

Rosenthal has published three lengthy, front-page reports about the massive looting which characterizes American health care. But with the exception of Terry Gross, no one in the far-flung press corps has said a word about this, not even the fiery, corporate-paid “progressives” on The One True Liberal Channel.

Rosenthal’s topic lies at the heart of various top-shelf progressive concerns. The massive looting she is discussing helps explain the rise in income inequality. This looting also helps explain the nation’s stagnating wages; the inability of many people to afford health insurance; and the nation’s ballyhooed problems with debt and deficits, which affect the government’s ability to finance progressive projects.

For the record, Rosenthal is describing a major act of looting, in which Americans spend two to three times as much per person on health care as citizens in every other large developed nation. But Rachel hasn’t mentioned her name. Neither have Lawrence, Al or The Puppy.

For that matter, neither has anyone else except Gross! As Rosenthal cruises toward her prize, silence has invaded the (upper-end) suburbs where all good pundits dwell. This morning, Lady Collins has returned to her steady diet of weiner while promoting the need for “summertime” columns. Monday night, on The One True Channel, Lawrence interviewed a man who was troubled by the antics of a state fair rodeo clown. (For background, click here.)

Let’s assume these are sensible topics. What explains the total silence surrounding Rosenthal’s work?

In part, the silence reflects an upper-end group agreement which holds that massive looting of this type simply will not be discussed. Indeed, Rosenthal herself seems to be trying not to notice the phenomenon she is describing. There is one statistic she constantly mentions—the $2.7 trillion Americans spend on health care each year. But in the course of three long reports about the mammoth size of American spending, she has never mentioned statistics like these:
Per person spending on health care, 2009:
United States: $7960
France: $3978
United Kingdom: $3487
Australia: $3445
Italy: $3137
Spain: $3067
Japan: $2878
Someone else will have to update those data. We’re tired of wasting our time presenting information here. But in that fairly recent year, the United States was spending two to three times as much, per person, as citizens of those other countries, while registering mediocre health outcomes.

Presumably, anyone with eyes and command of the language can spot the presumptive “looting” which screeches out from those remarkable data. Last September, the editors of Rosenthal’s paper even cited another (somewhat faulty) statistic which briefly made the rounds:
NEW YORK TIMES EDITORIAL (9/11/12): Waste in the Health Care System

A new report from a panel of experts convened by the Institute of Medicine estimated that roughly 30 percent of health care spending in 2009—around $750 billion—was wasted on unnecessary or poorly delivered services and other needless costs. Lack of coordination at every point in the health care system is a big culprit.
As we noted at the time, this panel of experts seems to have missed a major chunk of the waste. The experts said that 30 percent of our health care spending was wasted. This takes us only partway down to the level of spending found everywhere else in the world—in France, let’s say, which spends half as much as we spend per person while registering equivalent outcomes.

As she pretends to report on the high cost of health care, Rosenthal keeps failing to cite statistics like these. She keeps citing the total amount of American health care spending, a figure which has no meaning to anyone. (She might as well convert the amount into drachmas.) She omits the types of statistics which help us see the size of the looting which explains why our total spending came to $2.7 trillion last year, rather than (let’s say) $1.35 trillion, the amount of money we would have spent if we spent money like France.

That leaves $1.35 trillion we wasted. Just last year!

The $1.35 trillion we wasted could have been put to many uses. It could have gone into citizens’ pockets. It could have funded useful projects.

But Rosenthal keeps steering our eyes away from such data, and the kids on The One True Channel keep chasing Governor Ultrasound’s Rolex and that rodeo clown. As they do, they cluck like chickens, three times, and display their townie accents.

People, the news can be good solid fun, especially when the news is a scam!

This is the shape of corporate liberalism on this corporate news channel. By the way—the children themselves have excellent health care, and they are stuffing tons of bucks into their own fancy pants.

Meanwhile, Rosenthal keeps staying away from the big societal picture. Instead, she offers human interest.

On August 4, Michael Shopenn was the human in whom we were asked to take interest. With a dateline of Warsaw, Indiana, this is the way Rosenthal started her 3800-word report:
ROSENTHAL (8/4/13): WARSAW, Ind.—Michael Shopenn's artificial hip was made by a company based in this remote town, a global center of joint manufacturing. But he had to fly to Europe to have it installed.

Mr. Shopenn, 67, an architectural photographer and avid snowboarder, had been in such pain from arthritis that he could not stand long enough to make coffee, let alone work. He had health insurance, but it would not cover a joint replacement because his degenerative disease was related to an old sports injury, thus considered a pre-existing condition.

Desperate to find an affordable solution, he reached out to a sailing buddy with friends at a medical device manufacturer, which arranged to provide his local hospital with an implant at what was described as the ''list price'' of $13,000, with no markup. But when the hospital's finance office estimated that the hospital charges would run another $65,000, not including the surgeon's fee, he knew he had to think outside the box, and outside the country.

''That was a third of my savings at the time,'' Mr. Shopenn said recently from the living room of his condo in Boulder, Colo. ''It wasn't happening.''
Because he knew a guy, Shopenn could have purchased a hip implant for $13,000. without any mark-up. But he couldn’t install it himself. The whole deal would run him $78,000, not counting the surgeon’s fee!

As she continued, Rosenthal explained what happened next. At this point, a reader may think that he or she has already been gobsmacked:
ROSENTHAL (continuing directly): ''Very leery'' of going to a developing country like India or Thailand, which both draw so-called medical tourists, he ultimately chose to have his hip replaced in 2007 at a private hospital outside Brussels for $13,660. That price included not only a hip joint, made by Warsaw [Indiana]-based Zimmer Holdings, but also all doctors' fees, operating room charges, crutches, medicine, a hospital room for five days, a week in rehab and a round-trip ticket from America.

''We have the most expensive health care in the world, but it doesn't necessarily mean it's the best,'' Mr. Shopenn said. ''I'm kind of the poster child for that.''
Say what? In Brussels, the whole operation, including the surgeon’s fees, cost $13,660! That included the (Indiana-manufactured) hip joint, which by itself was going to cost Shoppen $13,000 in this country, where he was getting list price!

Can we talk? At this point, we’ve already seen evidence of a serious crime. Rather plainly, someone had tried to conduct a major scam at Shopenn’s expense.

Yet just as Shopenn needed a hip, Rosenthal seems to need a pulse. Quoting Shopenn, she again makes an impressive bid for an Absurd Understatement Award.

Shopenn is quoted saying that our health care is “most expensive in the world.” Based upon everything else we've been told, it seems he meant to say that it constitutes some sort of criminal enterprise. And as Rosenthal continued, she convinced us of a basic fact:

Perhaps at the direction of her editors, she seems unwilling to comprehend the size of the offense she’s describing. Please note her additional Vast Understatement bids, along with the very large elephant which has entered the room:
ROSENTHAL (continuing directly): As the United States struggles to rein in its growing $2.7 trillion health care bill, the cost of medical devices like joint implants, pacemakers and artificial urinary valves offers a cautionary tale. Like many medical products or procedures, they cost far more in the United States than in many other developed countries.

Makers of artificial implants—the biggest single cost of most joint replacement surgeries—have proved particularly adept at commanding inflated prices, according to health economists. Multiple intermediaries then mark up the charges. 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.

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.
Do medical devices “cost far more in the United States than in many other developed countries?” Based upon what we’ve just been told, we’d have to say that’s another bid for the Understatement Prize.

But as she continued, Rosenthal’s data brought our analysts out of their chairs, as did her lack of a pulse. Can Rosenthal possibly mean what she said? Can we be reading that right?

Can that possibly be what she meant? Rather plainly, she seems to say that the actual cost of manufacturing that artificial hip in the United States is just $350.

Can that possibly be what she meant? Hadn’t she told us, just moments before, that Shopenn was going to be charged $13,000 for that item—and only because he was going to get it at “list price?”

Others get billed two to three times that much. Isn’t that what she just said?

We’ve read Rosenthal’s piece again and again. We’ve read it again and again today. It seems to us that this is what she said.

It also seems that it can’t be.

No matter how many times we read that piece, it keeps coming out the same way. According to Rosenthal, it costs $350 to manufacture an artificial hip in the U.S.—and Shopenn was going to be charged $13,000 for his.

The hospital fees would have been in addition. That was the price he was going to pay for the device, by itself.

That’s what Rosenthal’s words seem to say. But Rosenthal’s affect says something different. She seems unable to grasp the fact that she seems to be describing a crime. A case of looting has been described. There’s no sign that Rosenthal knows it.

Our inner voice keeps telling us that we must be reading this wrong. “Where’s the outrage,” Bill Bennett used to say. In this case, we add, “Where’s the pulse?”

On cable, Lawrence rails at a rodeo clown and shows us his best townie accent. Rachel clucks like a chicken, three times, and hunts after Ultrasound’s Rolex.

None of these corporate rodeo clowns have said a word about Rosenthal’s series! Is this the way “liberal politics” looks when it’s scripted from on high, from high in the corporate boxes?

Tomorrow: How CNN sounds


  1. Look, we get charged $1-2 for a fountain soda at a fast food restaurant that costs about 35 cents (generously) to produce, including cup. Mark ups on almost everything we buy are huge, like that.

    Isn't this the price we pay for living in a free market capitalist economy? We are told that the costs of marketing, advertising, researching and inventing, are added to those of producing goods and services, so there is no connection between the two by the time it reaches the consumer.

    We are used to being looted for everything, so why expect special outrage about the looting in a health care context, which is more opaque than buying a soft drink? What is the alternative? Are we going to all of a sudden become a different kind of economy?

    Salaries are not rising at the same rate as the looting, so the rich are disproportionately rich, but salaries are higher in the US than in many other places with inexpensive health care. If we stop the looting will our wages go down?

    1. Calculate and compare the percentage markup on your soda and on the artificial hip.

      Also, your your wages aren't really so much higher than in other countries.

      This comment is a sort of whoa-there-let's-not-rush-into-fixing-things-that-aren't-broken defense of inertia.

      "What is the alternative?"

      There isn't just one alternative.

      But the whole world is basically doing it differently, better and cheaper than we are.

      We could learn a thing or three.

      "Are we going to all of a sudden become a different kind of economy?"

      Since our healthcare debacle is the outcome of the economy we have, that would probably be a good thing. But it will NEVER happen "all of a sudden," so your concern is quite misplaced.

    2. The commodity price of corn is less than 10 cents/pound, but a 1 pound box of corn flakes will cost over 30X that amount. And, yes, Kellogg's makes about a billion dollars/year. (Of course, that includes profits from Cheez-its and Eggos as well.)I don't think that makes Tony the Tiger a criminal.

      Rosenthal's reporting does, however, cover actual criminal behavior by device makers and points to device salesmen hawking their wares in the operating room. Her sober reporting style, softened with sympathetic real life examples, comes across as reasoned, sane and authoritative.

      There are plenty of outraged voices in the media, do we need one more? Should the NY Times get more shout-y and aspire to a tabloid style? If TDH finds Rosenthal's series persuasive, why won't others?

    3. "Why won't others?"

      I guess we'd have to ask them. But they sure are keeping quiet, aren't they?

      BTW, you aren't keeping the comparison fair: $350 wasn't the "commodity price" of the materials in the hip. It was the manufactured cost.

    4. Corn flakes to artificial hips isn't a fair comparison. There's not a whole lot of design, testing, compliance, and legal (look out for patent trolls!) expense to be layered on to corn flake production.

    5. Belgium also has a capitalist economy, original poster. So why doesn't Belgium mark up the hip replacement from $350 to $13,000?

      You also state something false: that in America we have a "free market" capitalist economy. That's precisely what we don't have. In a free market, hospitals, insurance companies, and medical parts manufacturers would not be conspiring among themselves to set prices. Which is what they do now. We have an utterly artificial market in healthcare.

  2. What is your basis for the claim that our economy is "free market capitalist"?

    1. Its values are -- that is the ideal toward which it aspires. I personally would prefer a more managed economy, but I do not see how this health care situation is not consistent with the goal of having free market capitalism, nor do I see why this is not what such an economy produces in all spheres. Presumably, the hip replacements available for lower cost elsewhere should bring down costs in the US via competition -- no? So what is the basis for outrage? Market forces should impose curbs on the current excesses.

      I personally do not advocate throwing sick people into this situation with the belief that the economy will sort itself out eventually, because their illnesses need to be addressed now and suffering is the consequence of letting the market find its own balance. But I really do not see how that can be true for health care and not for every other good and commodity that our economy produces.

      If you want to argue that this is somehow not a free market capitalist economy, fine, but how then is the looting occurring if we already have a managed economy? Are you suggesting that whoever is supposed to regulate this sort of thing is falling down on the job -- who exactly is that and how are they supposed to be addressing this looting?

  3. Easy to have low costs in a socialized system. Ration care tight enough and people will die before you have to do anything expensive on them! Only poor people of course, the rich and elite can afford to cut in line or travel elsewhere for their care.

    We're suffering the consequences the the wage and price controls of WWII that gave rise to the employer healthcare benefit system which distorted the market and started over pricing healthcare for everyone else. The socialism spree of the 60's has made the problem even worse.

    Today the prices have little to do with what care you get but is more dependent on who you are and the maximum amount that can be extracted from you. This isn't because if some nefarious looting plot, but because government regulations and the specter of lawsuits encourages the most expensive care possible, but discourages anyone but a select few from actually paying for it.

    So often the "normal" people are being over charged as much as possible to cover the losses from the uninsured emergency room walk offs and the medicare/medicaid patients treated at a loss.

    1. "Easy to have low costs in a socialized system. Ration care tight enough and people will die before you have to do anything expensive on them!"

      Is this what you think is happening somewhere else in the world? One of those countries in the comparative cost-of-care list?

      Oh, no? It's the US that's the socialized system, because of the '60s??!?

      So then how do you explain "actual" socialized medicine in the rest of the world, where care isn't rationed tight, people don't die younger and total per-person cost is lower?

      Your "distorted market" explanation isn't worth shit.

  4. Fair enough - but your employer and the government don't pay for your fountain sodas.

    1. So, when every day people have to pay for something it should cost a huge amount but when the government or an employer pays for it, the costs should be lower? My understanding is that is how it is now -- insurance companies pay lower amounts than regular people without insurance. How is that fair? No matter how you look at it, someone pays. The main difference is that regular people cannot afford health care out of their own pockets, no matter how it is priced. That means it must be paid for in some collective way that spreads the costs across many individuals so that they are manageable. It may be a fantasy that health care can be provided without high cost for some entity, but it is a reality that individuals cannot afford their own care, especially at end of life.

      I think government payment through taxation and entitlements is a more effective way of managing things than private insurance, because the temptation to skimp on care and increase profits is eliminated and because people will not be excluded from the pool because they have expensive conditions or cannot afford their premiums.

  5. Poo Poo Platter (Health Care Advice for Tired Authors)

    "We’re tired of wasting our time presenting information here."

    "not even the fiery, corporate-paid “progressives” on The One True Liberal Channel."

    "But Rachel hasn’t mentioned her name. Neither have Lawrence, Al or The Puppy."

    "Monday night, on The One True Channel, Lawrence interviewed a man who was troubled by the antics of a state fair rodeo clown."

    "the kids on The One True Channel keep chasing Governor Ultrasound’s Rolex and that rodeo clown. As they do, they cluck like chickens, three times, and display their townie accents."

    "On cable, Lawrence rails at a rodeo clown and shows us his best townie accent. Rachel clucks like a chicken, three times, and hunts after Ultrasound’s Rolex."

    "Someone else will have to update those data. We’re tired of wasting our time presenting information here."

    Perhaps a judicious avoidance of repetition would cure that tired, wasted feeling. That and some clucking chicken soup.

    1. The media isn't echoing Rosenthal's health-care story. It's a non-event.

      But what's more interesting is that Somerby repeated himself!!

      My Poop. You didn't ask for this daily diet, you don't want it, but I keep dumping it out of my ass. Eat up!

    2. Anon @ 12:20

      You don't share my concern for Bob Somerby's health? If he doesn't act to cure that tired, wasted feeling now, at his age, nobody will be available to remind us what happened in 1999 during that definitive debate on the structure of American health care that Krugdrumdionnistas have clucking never mentioned.

      You are as insensitive as a fiery corporate-paid progressive is about poor inner city kids.


    3. There was a Democratic presidential primary debate where two heavy-hitter candidates weighed in with their own stands on the issue, and Gore's suits got more coverage.

      In 2013 we are less than a year away from implementing a plan that most people know nothing about, only that it polls badly.

      And here's a poo-head on a blog trying to marginalize a blogger because the blogger frequently references his first-hand-once-removed knowledge of how the media short-shifted the 1999 candidate's policy positions to focus on bullshit. Poo bemoans this relevant reference even after he complained about the blogger's lack of focus on liberal concerns.

      I know that you've got your little troll assignment here, and that you and your fellow trolls try to dazzle each other with creative gas-bagging, but you should be ashamed. You have to ignore so much and compromise so much in order to punish a fellow liberal.

    4. CeceliaMc, you are the one, like the pundits Bob deplores, who invented the claim that I complained about the blogger's lack of focus on liberal concern's. I "complained" like Al Gore said he "invented."

      My complaint is that Bob uses the exact same tactics and techniques he deplores.

    5. No, Poo-Poo, your complaint is that you think Somerby gives aid and comfort to your enemies.

    6. And if I might challenge you, like Bob Somerby challenges Rodeo Clown Rachel, to name those enemies of mine, Cecelia, could you list them? Better yet, how many of them could dance on the head of a pin? That is a size you can grasp if there is a mirror handy.


    7. Hey Poo,

      If someone in a candy store correctly pointed out that another customer was stealing candy, but you found out that they had been stealing also, would the first customer's crime become less important? This is what you are implying. It is false.

      Do you think readers of this blog find it more important that there is some hypocrisy in Bob's posts than in the malfeasance of our press corps? You certainly seem to.

      Bob is clearly trying to help the larger discourse. What are you trying to do?

    8. No Anon @ 10:26

      The first customer's crime would not become less important. Nor would the second customer's crime be more important. But if you were the store owner, would you want to know only about the first, and think the second was a friend you should greet daily as an honest customer because nobody pointed out he was copping candy too.

      The key to your question, however, is the adverb "correctly." One part of Mr. Somerby's hypocrisy is his participation in this aspect of press malfeasance: misleading by exxageration or ommission of facts.

      Wouldn't it be better for all concerned if Mr. Somerby conducted himself in a manner
      other than one which he has devoted himself to deriding in others?


    9. Poo -

      You are incorrect in your assessment of what Bob has devoted himself to. You want what hypocrisy you can find to be central to his thesis, but it is not. He sees the NYT dumbing down and stealing the discourse that needs to exist for a functioning democracy. His blog is not hypocritical in that sense.

      As Lenny Bruce once said, "there's a big difference between a big piece of art with a little shit in the middle and a big piece of shit with a little art in the middle."

  6. Call me Isaac.
    There is no free market in healthcare. There is no agora where lots of providers encounter shoppers to transact healthcare. There is substantial imbalance in information and cultural power which is supposed to be balanced by professionalism, an ethical system, on the part of the providers. There are significant barriers to entering the market on the provider side in the form of regulation and licensing which makes any invocation of free markets laughable.
    The providers consequently operate the way oligopolies always do. When a input such as the hip prosthesis in this example comes along, the provider passes the costs along to the patients on a cost plus basis. What are the providers motivations to bargain down the price of the hip when they can simply mark it up by some percentage and pass it on to the patient?
    Another example of this effect is the price of a unit of blood which is $900 in the US and $100-150 in Europe. When you are in a position to need a unit of blood, you are not likely to be in a good position to bargain. Will your local hospital bargain on your behalf when they can simply mark it up and pass it on to you?
    Medicare provides poor vision and ental benefits. My parents kept a dentist and ophthamologist in Munich, paid cash, and saved enough for the trip.
    I will believe in a free market as soon as I see one. Am still looking for UFO's and bigfoot, too.

    1. Our health care system is certainly not an example of a free market system and I don't think that it ever can be in the way that free market is usually defined.

      However, there are ways to get people involved from the standpoint of owning their own policy, being able to bind together into co-ops that can help.

    2. Your parents fly to Munich every time they need to see a dentist?

    3. Don't doubt it. An acquaintance from Ireland needed a root canal so he flew home to get it. He said he saved enough money not only for the air fare, but to knock off a week of work and spend time with family there.

  7. Bob, don't jump so hard on poor Rosenthal. She at least had the energy and intelligence to WRITE this story. If she had indulged herself in verbal histrionics it's likely that the series would never have seen the light of day in the venerable New York Times. Also, I assume the final published version underwent an editor's revisions as well.

  8. Rand Paul was John Oliver's guest on Oliver's last stint as host of the Daily Show the other night. According to the aptly first-named Paul, the reason our health expenses are so high is that we don't apply free market principles to health care. He uses the example of lasik surgery to improve vision, which he says is not covered by insurance or presumably by Medicaid or Medicare, and because of free market competition, the cost has come down. He for some reason fails to also mention (and unsurprisingly Oliver was unprepared to catch him on it) all the other advanced countries where health care is regulated far more than in the U.S., at less than half the per capita cost, with better health outcomes.

  9. Elisabeth Rosenthal doesn't let fact get in the way of a sensational story. Better to sell newspapers than tell the truth. The truth wouldn't be shocking and outrageous so she distorts and lies. Elisabeth Rosenthal publishes garbage.

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