EYES WIDE SHUT: The silence continues!


Part 1—Plutocrat looting ignored: Amazing amounts of money get looted in the normal operation of American health care.

Way back when, in 2005, Paul Krugman tried to raise this issue with a series of columns in the New York Times. He may as well not have bothered. The rest of America's press and pundit corps is committed to avoiding this ginormous policy matter.

But along the way, Krugman offered the basic outline of a puzzling situation. On April 15 of that year—Tax Day!—he discussed the “amazing” state of American health care spending:
KRUGMAN (4/15/05): Britain isn't the country we want to look at, because its health care system is run on the cheap, with total spending per person only 40 percent as high as ours.

The countries that have something to teach us are the nations that don't pinch pennies to the same extent—like France, Germany or Canada—but still spend far less than we do...

Let me rattle off some numbers.

In 2002, the latest year for which comparable data are available, the United States spent $5,267 on health care for each man, woman and child in the population. Of this, $2,364, or 45 percent, was government spending, mainly on Medicare and Medicaid. Canada spent $2,931 per person, of which $2,048 came from the government. France spent $2,736 per person, of which $2,080 was government spending.

Amazing, isn't it?
“Now is a good time to ask why other advanced countries manage to spend so much less than we do, while getting better results,” Krugman said. That was eight years back.

In 2005, Krugman called our health care spending “amazing”—and he noted that the Brits spent only 40 percent as much as we spend, per person. But uh-oh! As of 2007, the United States was spending two to three times as much, per person, as all large developed nations, including the other countries Krugman had praised, also including Japan.

As of 2007, we were spending $7290 per person; France was spending $3601. (Great Britain: $2992.) An amazing amount of money was disappearing down some large, unnamed hole.

This is a remarkably large policy story, one the press and pundit corps struggles heroically to ignore. They give you tales about Hillary Clinton. They obsess about Anthony’s weiner.

They invent a range of facts to turn the Zimmerman case into Selma. But their heroic silence has been unyielding when it comes to the looting involved in this major policy area.

Even in the year 2009, the press corps and the pundit corps didn’t waver. August professors didn't step forward to explain those amazing numbers. As the Affordable Care Act was thrashed, the press corps pretended to spend a year discussing health care policy. But as we kept noting at the time, none of the major news orgs conducted any real reporting on The Case of the Missing Loot.

The NewsHour, the Washington Post, the New York Times? All three orgs pretended. They offered truncated, Potemkin reports about per person spending in the U.S. as compared to that in all other developed nations. Even that year’s ballyhooed book about health care—T. R. Reid’s The Healing of America—offered a truncated pseudo-explanation of where all that money was going.

Where does all that money go? For reasons which may be obvious, we can’t exactly tell you! But the size of this problem has become clear through the efforts of the handful of Irish monks who defy Hard Pundit Law and discuss this “amazing” problem. The gigantic cost of American health care helps explain stagnating wages. And as Dean Baker endlessly notes, federal deficits would disappear overnight if American per person health spending suddenly matched that of France.

The silence has been general all over the “press corps” concerning this massive looting. Wherever all that moolah is going, the boys and girls in that Potemkin assemblage haven’t wanted to “follow the money” this time. That of course is the basic nature of moral and intellectual paralysis.

That’s why the analysts came out of their chairs not so long ago! On Sunday morning, June 2, a new series made its debut on the front page of the New York Times.

PAYING TILL IT HURTS, the new series was called. Elisabeth Rosenthal started her first report like this, headline included:
ROSENTHAL (6/2/13): The $2.7 Trillion Medical Bill

Deirdre Yapalater's recent colonoscopy at a surgical center near her home here on Long Island went smoothly: she was whisked from pre-op to an operating room where a gastroenterologist, assisted by an anesthesiologist and a nurse, performed the routine cancer screening procedure in less than an hour. The test, which found nothing worrisome, racked up what is likely her most expensive medical bill of the year: $6,385.

That is fairly typical: in Keene, N.H., Matt Meyer's colonoscopy was billed at $7,563.56. Maggie Christ of Chappaqua, N.Y., received $9,142.84 in bills for the procedure. In Durham, N.C., the charges for Curtiss Devereux came to $19,438, which included a polyp removal. While their insurers negotiated down the price, the final tab for each test was more than $3,500.

''Could that be right?'' said Ms. Yapalater, stunned by charges on the statement on her dining room table. Although her insurer covered the procedure and she paid nothing, her health care costs still bite: Her premium payments jumped 10 percent last year, and rising co-payments and deductibles are straining the finances of her middle-class family, with its mission-style house in the suburbs and two S.U.V.'s parked outside. ''You keep thinking it's free,'' she said. ''We call it free, but of course it's not.''

In many other developed countries, a basic colonoscopy costs just a few hundred dollars and certainly well under $1,000. That chasm in price helps explain why the United States is far and away the world leader in medical spending, even though numerous studies have concluded that Americans do not get better care.
Good lord! Rosenthal was going where her colleagues had not gone before! As she continued, she began to discuss The Problem That Has No Name and Permits No Discussion. She even explained that headline:
ROSENTHAL (continuing directly): Whether directly from their wallets or through insurance policies, Americans pay more for almost every interaction with the medical system. They are typically prescribed more expensive procedures and tests than people in other countries, no matter if those nations operate a private or national health system. A list of drug, scan and procedure prices compiled by the International Federation of Health Plans, a global network of health insurers, found that the United States came out the most costly in all 21 categories -- and often by a huge margin.

Americans pay, on average, about four times as much for a hip replacement as patients in Switzerland or France and more than three times as much for a Caesarean section as those in New Zealand or Britain. The average price for Nasonex, a common nasal spray for allergies, is $108 in the United States compared with $21 in Spain. The costs of hospital stays here are about triple those in other developed countries, even though they last no longer, according to a recent report by the Commonwealth Fund, a foundation that studies health policy.

While the United States medical system is famous for drugs costing hundreds of thousands of dollars and heroic care at the end of life, it turns out that a more significant factor in the nation's $2.7 trillion annual health care bill may not be the use of extraordinary services, but the high price tag of ordinary ones. ''The U.S. just pays providers of health care much more for everything,'' said Tom Sackville, chief executive of the health plans federation and a former British health minister.
Can Elisabeth Rosenthal say that? On June 2, the answer was suddenly yes. And Rosenthal was saying these things on the front page of Gotham’s own New York Times, our most famous incompetent newspaper!

That first report by Rosenthal ran 4200 words—and she said more reports would be coming. “In coming months, The New York Times will look at common procedures, drugs and medical encounters to examine how the economic incentives underlying the fragmented health care market in the United States have driven up costs, putting deep economic strains on consumers and the country,” she wordily but brassily wrote.

And sure enough! On Monday, July 1, Rosenthal returned with a second lengthy front-page report: “American Way of Birth, Costliest in the World” (3200 words).

On Sunday, August 4, she was back on the front page again: “In Need of a New Hip, but Priced Out of the U.S.” (3800 words).

In short, Rosenthal has now done three massive front-page reports about The Problem That Dare Not Be Named. And sure enough! Her reports have produced zero discussion everywhere else in the “press corps!”

According to Nexis, Rosenthal’s name hasn’t been mentioned on The One True Liberal Channel, a clownish frat house which won’t touch a topic unless it gives Our People a way to drop R-bombs on Their People. This is now the pleasing shape of corporate-funded progressive politics.

But then, Rosenthal’s name has also been missing from CNN and the Fox News Channel. According to Nexis, she hasn't been mentioned on ABC, NBC or CBS or on the august NewsHour.

Last Wednesday, Rosenthal did a lengthy segment with Terry Gross on NPR’s Fresh Air. According to Nexis, that represents the only time her name has so much as been mentioned by any of the Potemkin “news orgs” we have mentioned above. (Search term: Rosenthal AND health.)

Those news orgs like to serve weiner. They keep distracting you into the future. But even with this major topic being thrashed right there in plain sight, the eyes of the Potemkin press corps have been kept wide shut.

Some of this silence may stem from Rosenthal’s style, a point we will explore tomorrow. But please feel free to savor the irony of this unfolding drama:

Elisabeth Rosenthal is going to win the Pulitzer Prize for a series of front-page reports about one of our most pressing policy problems. And her front-page reports have appeared on the front page of our most famous national newspaper!

But on the day she accepts her award, the communal silence will not have been broken! Not a word of discussion will have been generated by the reports which will be gaining the biggest prize our “press corps” has to offer.

Some of the silence we’ve seen this summer may result from Rosenthal’s style, which seems to plead for no further discussion. But has the complexity of our plutocracy ever been more “amazing?”

Tomorrow: Frankly, we were puzzled


  1. its not the press corp so much as it is the employers of the press corp, who for two reasons dont want to mess with the medical industrial complex:

    1.) they advertise . . . which means effectively they are the front peoples (the journalists) ultimate bosses.

    2.) the bosses of the front people, and some of the higher paid front people themselves, rub shoulders with the moneyed people and their tools. they go to the same country clubs and hope to have their children and grandchildren enrolled in the same upper class prep schools and ivy league universities. they want the friendship of the moneyed interests for themselves and their families to possibly win favors from them down the line .

  2. So Bob essentially we are at pack up the blog and shoot ourselves in the head mode right? I mean doesn't this illustrate that even if the msm gets their stories basically *right* (ie every other leap year) that it will then just be completely ignored? What's the point?

    1. Shedding light on things still tends to encourage reluctant change.

    2. What's your point, Marcus? Bob is presumably going to point out that our pundit and political class is mostly worthless--even when facts are laid out for them on the front page of the NYT (many years later than it should have happened), they still won't discuss it. So yeah, one response to this is to shoot ourselves in the head. Another is to start writing angry letters to politicians and newspapers and anyone else you can think of. People who actually know something about political organizing (which wouldn't be me) probably have better ideas. But it is at least a start knowing the problem.

    3. It's not the job of the guy showing you the problem to make you feel optimistic about solving it.

      Even if you aren't optimistic about solving it, that doesn't imply that surrender is the best strategy.

    4. Agreed, and my comment was not a criticism of Bob or this blog. It's just morbidly funny that 9/10 the NYT gets an issue laughably wrong, and the 1/10 it gets the basic facts right, the article is disappeared.

  3. The "Fresh Air" show was fantastic. It was very substantive, informative and much more interesting than a Maureen Dowd column. The only thing they didn't talk about are the doctors' fees. Maybe that will come in a future interview. I strongly recommend that you listen to that program. It convinced me even more that we need a universal healthcare system. That appears to be the only real way to tame the cost of health care and health insurance.

    1. If you are going to tinker with doctor's fees, you need to also change the way doctors are trained. It is unreasonable to expect students to spend 4 years in college (getting close to straight A's), 4 years in med school, 4-5 years in internship/residency and another 3-4 years doing a specialty fellowship before being able to earn a living. If education past undergraduate degree were subsidized and reasonable pay were provided during residency and fellowship, then perhaps it would be reasonable to expect doctors to spend the rest of their career at a lower income level. As it is, they must pay for private practice costs, malpractice insurance and pay down student loans out of those fees you consider exorbitant. Who else is expected to do that after postponing income-earning years a full decade or more after college graduation? This illustrates that when you start tinkering with the system, you need to address it as a whole and not just change parts of it that look wrong (out of context of why they are that way).

    2. Thank you, Doctor. Who said I thought the fees were exorbitant? All I said was that they weren't addressed on the "Fresh Air" program. I can say that the American costs for medical prosthetic devices, medical hardware and hospital treatment are, in fact, all exorbitant and we pay much, much, more for such goods and services than they pay anywhere else in the industrialized world, or the pre-industrial world for that matter. If we were to "tinker" with doctor's fees, I agree that there are many issues which would have to be addressed in order to be fair and equitable to the doctors as well as their patients.

    3. Now that I think of it, though, I'll bet there are plenty of doctors who have invested in the manufacturers of medical devices and in hospitals and other health care facilities. They may be making a nickel or two by that route.

  4. Here's an interesting passage from the piece linked.

    Had no idea there was such a series and am grateful for the info.

    "“In the U.S., we like to consider health care a free market,” said Dr. David Blumenthal, president of the Commonwealth Fund and a former adviser to President Obama. ”But it is a very weird market, riddled with market failures.”

    Consider this:

    Consumers, the patients, do not see prices until after a service is provided, if they see them at all. And there is little quality data on hospitals and doctors to help determine good value, aside from surveys conducted by popular Web sites and magazines. Patients with insurance pay a tiny fraction of the bill, providing scant disincentive for spending.

    Even doctors often do not know the costs of the tests and procedures they prescribe. When Dr. Michael Collins, an internist in East Hartford, Conn., called the hospital that he is affiliated with to price lab tests and a colonoscopy, he could not get an answer. “It’s impossible for me to think about cost,” he said. “If you go to the supermarket and there are no prices, how can you make intelligent decisions?”

  5. Speaking of NPR, I heard a phrase on Morning Edition last week that is so perfect for modern journalism: "nearly a dozen." The subject was violence in Chicago, and the audience was told that, during a weekend last month, there were "nearly a dozen" deaths in the Windy City.

    Does this not show a deep need to exaggerate? To not tell the simple honest facts, but goose it, just a little? Think about what that phrase means. It means eleven. Not ten, because ten is already a round number. If the number was ten, the writer would use "ten." It would be dishonest to use "nearly a dozen," if it meant forgoing "ten" to slip in the word "dozen." If the number was twelve, then it would just be, "a dozen."

    It makes me laugh, because it is such a small gain. You get the feel of a larger number, without quite getting there. It's like an eleven-year-old child, when asked how old they are, responding, "almost twelve."

    1. Well, there have been nearly a dozen comments on this post about the Potemkin series in our Potemkin press about our plutocratic plundering.

      Not quite as good a response as was provoked from the post on Chris Hayes which probed race.
      That produced over four score.

    2. That proves articles about health care attract fewer trolls than articles about race.

  6. Where the healthcare money goes is fairly well known and is occasionally presented in the media in pie charts or whatever. The answer is it goes many places; physicians, pharmaceutical companies, insurance companies, hospitals and several others. Most segments are more expensive in the US than elsewhere. So there is no simple solution to cutting costs; basically all parts of the system have to be made more efficient. A lot of money - about 8% of GDP - goes into this excess cost and this pays for a lot of lobbying and campaign contributions by all those industries (and the AMA).

  7. It's not quite true that there is NO reporting on healthcare costs, although Bob is right that there should be much, much more. There was an excellent piece in the LA Times a few months back about a man (I'm going off memory here so I could be wrong in some of the details) trying to figure out the cost of some medical procedure, either for himself or a family member, before it was done, so he could comparison shop. It was utterly impossible. Hospitals either wouldn't tell him, or couldn't tell him, and when he did get numbers there was an enormous range from higher to lower which was completely inexplicable.

    We need pieces like this every week in the MSM. I guess part of the problem is that reporters and newspaper executives and news producers have good healthcare and fairly reasonable co-pays, so they never really have to worry about something like facing a bankruptcy, or what the true cost of some procedure is.

    1. You can comparison shop for things insurance doesn't cover, I guess, like cosmetic surgery or dental/orthodontics. The other night on the Daily Show, Rand Paul told Oliver that the price of laser eye surgery went down from $2000/eye to $500/eye because its not covered by insurance so there is competition.

      How to comparison shop for the big ones like cancer treatment, stroke treatment, heart surgery, serious infections --- its way too expensive, $50 mouth washes and all, but theres no way as an individual to make comparisons of complicated treatment plans.

  8. I think also that now that Obamacare is the law of the land, news organizations think the healthcare issue has basically been "settled." They don't understand that all aspects of healthcare and insurance and health economics need to be reported on constantly.

  9. ". . . so they never really have to worry about something like facing a bankruptcy. . ."

    That's great as long as they have their jobs -- but reporters are dropping like flies as the print medium continues to die. Supporters of the ACA who focus attention on coverage of the currently uninsured have done an atrocious job of highlighting the fact that insurance will be obtainable at reasonable cost for everyone now employed even if you lose your job and even if you have had a health problem -- acne as a teenager?

    Anyone with half a brain should realize that assurance of being able to avoid bankruptcy and loss of life savings even if benefits are lost in a downsizing or whatever is a gigantic benefit of the law for everyone currently insured through an employer. What employees nowadays are sure their jobs are safe?

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