# An American Sickness - Elisabeth Rosenthal Synced: [[2023_11_30]] 6:03 AM Last Highlighted: [[2020_02_19]]  ## Highlights [[2020_02_11]] (Location 148) > ECONOMIC RULES OF THE DYSFUNCTIONAL MEDICAL MARKET More treatment is always better. Default to the most expensive option. A lifetime of treatment is preferable to a cure. Amenities and marketing matter more than good care. As technologies age, prices can rise rather than fall. There is no free choice. Patients are stuck. And they’re stuck buying American. More competitors vying for business doesn’t mean better prices; it can drive prices up, not down. Economies of scale don’t translate to lower prices. With their market power, big providers can simply demand more. There is no such thing as a fixed price for a procedure or test. And the uninsured pay the highest prices of all. There are no standards for billing. There’s money to be made in billing for anything and everything. Prices will rise to whatever the market will bear. [[2020_02_12]] (Location 290) > Why did EmblemHealth agree to pay nearly $100,000 for each of Jeffrey Kivi’s infusions, even though they cost only $19,000 at another hospital just down the street? First, it’s less trouble for insurers to pay it than not. NYU is a big client that insurers don’t want to lose, and an insurer can compensate for the high price in various ways—by raising premiums, co-payments, or deductibles. Second, now that they suddenly have to use 80 to 85 percent rather than, say, 75 percent of premiums on patient care, insurers have a new perverse motivation to tolerate such big payouts. In order to make sure their 15 percent take is still sufficient to maintain salaries and investor dividends, insurance executives have to increase the size of the pie. To cover shortfalls, premiums are increased the next year, passing costs on to the consumers. And 15 percent of a big sum is more than 15 percent of a smaller one. No wonder 2017 premiums for the most common type of ACA plan are slated to rise by double digits in many cities, despite economists’ assurances that the growth of healthcare spending is slowing. [[2020_02_12]] (Location 335) > Because most hospitals are nonprofit institutions, they have no shareholders to answer to and cannot legally show a “profit”; therefore, they spend excess income on executive compensation and building Zen gardens and marble lobbies. [[2020_02_12]] (Location 338) > There is an army of consultants running around hospitals. A whole phalanx of firms is there to improve revenue, improve compensation, and get a piece of the pie. Ten to 15 percent of revenue goes to billing and collection companies and contractors to do things like claims and preapproval—those jobs don’t even exist in Europe. And hospitals go to Wall Street for bond issues to build new wings, so the bankers are at the trough, too. We have so much surplus capacity, which should lead to falling prices. But instead we get the opposite: It’s a market failure, but it follows certain logic. This is not a healthcare system, it’s an industry, and at every point there’s a way to make money. [[2020_02_18]] (Location 557) > Facility fees are a unique construct of American healthcare and its business model. Hospitals in Europe don’t have them. Nor do other types of businesses in the United States. As Yevgeniy Feyman, currently of the Harvard T. H. Chan School of Public Health, observed in Health Affairs Blog, “When you buy anything—a watch, a car, even groceries—you pay a single price for the goods. The Walgreens down the street doesn’t add a separate charge to cover its rent, utilities, or the cost of refrigeration units.” Closing [[2020_02_19]] (Location 643) > If Republicans were disingenuous in evoking death panels to discredit the Affordable Care Act, Democrats have been equally so in heeding their local hospitals’ calls for more residents. Senator Bill Nelson (Florida), along with cosponsors Senators Charles Schumer (New York) and Harry Reid (Nevada), introduced the Resident Physician Shortage Reduction Act of 2015, to expand the number of subsidized training positions by fifteen thousand, or 15 percent. [[2020_02_19]] (Location 734) > A survey of the forms conducted by the California Nurses Association concluded that 196 hospitals received “$3.3 billion state and federal tax exemptions and spent only $1.4 billion on charity care—a gap of $1.9 billion.” Three-quarters of the hospitals got more dollars in tax breaks than they spent on benefiting the communities they serve.