The Health Care Debate We’re Not Having

Two new books show how access to health care is only part of the problem.

As I write this, a dear friend is lying in an intensive care unit in Washington, D.C. What started as a bad summer cold quickly turned into pneumonia, and after a few harrowing days she had to be put on a ventilator, while her doctors filled her IV line with a cocktail of antibiotics until lab tests could tell them what kind of infection she had. Sixty years ago, patients with such severe pneumonia either got better on their own, or died. There was no such thing as an ICU. Mechanical ventilators only became standard equipment in hospitals in the 1970s. Faster and more accurate diagnostic tests and more drugs for treating pneumonia came on line after the AIDS epidemic led to a crash research effort.

An American Sickness: How Healthcare Became Big Business and How You Can Take It Back by Elisabeth Rosenthal Penguin Press, 416 pp.

Ventilators, novel drugs and tests, and all the other accoutrements of modern medicine serve as a reminder of the astonishing power of medical science. I’ve also witnessed the art of medicine in action. I’ve seen an anesthesiologist lay a palm on the cheek to comfort a frightened patient about to go into surgery, and a physician assistant review a patient’s confusing constellation of symptoms, ask a few probing questions, and diagnose her rare disease. But health care has a dark side, too, where greed and self-delusion allow health care providers and drug and device manufacturers to treat patients less like vulnerable fellow human beings and more like ATM machines.

That dark side is on vivid display in An American Sickness, Elisabeth Rosenthal’s groundbreaking book that makes it impossible not to be shocked, if not enraged, by the gulf between the good care that is possible and the profiteering our health care industrial complex so often engages in. Trained as an emergency physician, Rosenthal joined the New York Times as a health reporter, and is now the editor in chief of Kaiser Health News. In addition to having an insider’s view of medicine, she has a reporter’s eye for stories, and this book is full of them—tales of patients being mistreated by a system that has become not merely dysfunctional, but at times actively predatory.

Here are just a few examples. A hospital charges wildly inflated prices and then duns a patient who has few assets and no insurance. A physician with no specialized expertise performs brain surgery on a young woman because he has an exclusive contract with the hospital and happens to be on call. Pharmaceutical companies raise the price of life-saving drugs whose production costs are low or negligible, simply because they can. As a sop, they offer “co-pay assistance” to patients, a practice that Rosenthal calls “a kind of bribe,” by establishing nonprofit organizations to which patients can apply for financial aid. Meanwhile, the company charges insurers its full, inflated price for the drug—driving up the cost of premiums for the rest of us.

Mistreated: Why We Think We’re Getting Good Health Care— And Why We’re Usually Wrong by Robert Pearl PublicAffairs, 336 pp.

One routine practice, aptly called “simultaneous surgery,” involves a single surgeon performing a procedure on two patients in different operating rooms at the same time. The work is done mostly by residents—lower-paid physicians who are still in training—and nurses, but both the surgeon and the hospital get to charge full price for two surgeries, and patients are often none the wiser.

You can be sure that these health care players still loudly proclaim their compassion for patients and “unwavering community mission,” as the University of Pittsburgh Medical Center (UPMC) says on its website. At one time, most hospitals in the U.S. were run by religious orders and had little more than compassion to offer. Today, institutions that were originally founded to do good are doing very well indeed. Take UPMC, which saw more than $11 billion in revenue and had $10 billion in assets in 2014. Revenue has grown 12 percent annually over the past fifteen years—numbers that would make a tech CEO jump for joy. But unlike other private companies, the hospital is nonprofit, which means it enjoys a big tax benefit on the 656 acres of land it owns, to the tune of $20 million a year.

In most cities, hospital CEOs are by far the highest paid executives in the nonprofit sector. The CEO of UPMC makes $6.1 million a year. The chief executive of Montefiore Medical Center, in the Bronx, a safety-net hospital that mainly serves poor people who are uninsured or on Medicare or Medicaid, makes $4.9 million, before a hefty annual bonus. By way of comparison, the Ford Foundation, a charitable organization that operates in 100 countries and has $12 billion in assets, paid its outgoing president $2 million a year.

In a book filled with shocking stories, Wanda Wickizer’s takes the cake. In 2013 Wickizer was a healthy, energetic, fifty-year-old widow with two teenage children when she woke up in the middle of the night with a blinding headache. A blood vessel in the space between her brain and skull had burst, and the hemorrhage would have killed her had she not received immediate treatment.

It is impossible not to be shocked, if not enraged, by the gulf between the good care that is possible and the profiteering our health care industrial complex so often engages in.

Wickizer was flown by helicopter from her local hospital to a major medical center 160 miles away, where she underwent emergency surgery. Two weeks later she was home, still groggy and confused but recovering. That’s when the medical bills began flooding in. First to arrive was the one for $16,000 from the Norfolk hospital, where she’d spent only a short time in the emergency room. Then came the $40,000 bill for the helicopter ride. Wickizer had no health insurance, and only her dead husband’s Social Security benefits and income from part-time jobs, but these bills seemed payable. Then she was hit with a $24,000 bill from a physician group. A month later, another bill from the same group came for $54,000, including a $240 late fee. Finally, the hospital sent its own charges: $354,884.42.

In sum, her bills came to half a million dollars, vastly more than the assets she had in savings and the value of her home. Wickizer began negotiating. The air ambulance company agreed to take $8,000. The various physicians settled for a fraction of what they had first demanded. The hospital, however, refused to negotiate. She found out what Medicare would have paid for her surgery and care—no more than $80,000—and offered the hospital her entire $100,000 retirement savings. The hospital declined, and threatened to put a lien on her house.

The hospital where Wickizer was treated? The University of Virginia Medical Center, a nonprofit public institution, founded by Thomas Jefferson and supported in large measure by the federal government and the taxpayers of the Commonwealth of Virginia.

Rosenthal uses each story to demonstrate one or more of ten economic principles that she says guide the actors in the health care market. “A lifetime of treatment is better than a cure,” for example, are words the pharmaceutical industry lives by. Then there’s “Amenities and marketing matter more than providing good care,” and “There are no standards for billing. There’s money to be made in billing for anything and everything.”

I suspect that the average American would find these rules deeply cynical. Health care is unlike other industries, in which consumers can judge the quality and worth of the goods and services. As patients, we have little choice but to place at least a certain degree of trust in our doctors and hospitals. Rosenthal’s book contradicts that vision of trustworthy providers, painting a picture of actor after actor driven by money and power, all wrapped in a sugar coating of biased science, relentless marketing, and the halo effect of hospitals’ religious roots.

Little of this comes through as bluntly and clearly in Robert Pearl’s Mistreated, but it’s there. Like Rosenthal, Pearl is a physician. He’s also the executive director and CEO of the Permanente Medical Group, the physicians’ organization of Kaiser Permanente, is on the faculty of the Stanford business and medical schools, and still finds time to see patients. (Kaiser Permanente, the health care provider, is not connected to the Kaiser Family Foundation, which sponsors Kaiser Health News, where Rosenthal works. Also note, by way of full disclosure: I sit on the advisory council of the Council of Accountable Physician Practices, which Pearl heads.) Perhaps because Pearl is still immersed in the waters of health care, he feels more constrained than Rosenthal. He describes the system’s failings in far more measured terms, saying it is “over-priced, and under-delivering,” and reserves his sharpest language for the “egregious” behavior of drug companies.

Even so, Pearl’s principal points are worth taking in. First, he argues persuasively that physicians and other health care actors would behave differently in a different system. That might seem self-evident, but the percentage of grasping and unscrupulous people in health care is likely no greater than in any other sector of the American economy. In fact, it might even be lower than in most industries, since many of the people who go into the healing professions are motivated, at least at the outset, by a desire to do good.

The problem is that the rules in health care have been written in such a way that unethical behavior has become acceptable, if not the norm. The system often punishes the good for doing the right thing while putting out a welcome mat for the ruthless—people like Martin Shkreli, the bad boy of the drug industry, who bought the rights to an old, off-patent antiparasitic and increased the price by 5,000 percent. As Pearl puts it, Shkreli “didn’t write the [drug industry] playbook. He just executed it like no one else had before.”

Pearl’s second point is that the hospital industry, drug and device makers, medical schools, physician professional societies like the American Medical Association, and all the rest of the consulting companies, nursing homes, software vendors, data analytic shops, and brokers of various stripes that make up the $3 trillion health care sector—the “legacy players,” in Pearl’s words—are the ones who made those rules, and they have a vested interest in viewing the system as fundamentally sound and in need only of minor tweaking, not a major overhaul. They also have the means for maintaining the status quo. “The way they see it,” Pearl writes, “America needs to keep the health care system it has. . . . And with their massive profits, media platforms, and lobbying influence, the views of legacy players have become our nation’s collective reality.”

Taken together, An American Sickness and Mistreated highlight the utter failure of our policymakers and legislators to grapple with the misguided policies and regulations that have permitted the health care industry, in the words of Washington Post reporter T. R. Reid, to transform the healing art of medicine into a “greedy arsenal for profit.” But while both books end with solutions, neither will entirely satisfy anyone looking for a way to fully transform the system.

Rosenthal advises patients how to protect themselves from high prices, for everything from a drug prescription to a day in the hospital. She also has excellent suggestions for negotiating with insurers and physicians, and sound advice about choosing an insurance plan. If this were all Rosenthal had to offer, I would argue that her book falls into the consumerist trap that so many legislators have bought into as the false solution to our massive health care spending problem. Urging patients to comparison-shop for everything from a health plan to an MRI assumes that if patients would just act more like consumers and treat health care more like buying a car or a restaurant meal, then the cumulative market pressure on providers and insurers would bring down prices, reduce fraud, and improve care. Right. Sure it would. The problem with this view is that the people most likely to put pressure on the system are those who use it the most, but the people who use it the most are the sickest and frailest patients, and therefore the least able to be prudent consumers.

But Rosenthal and Pearl know better than to imagine that patients can fix health care on their own. Both authors also offer the outlines of policy changes that are needed to rein in the system’s worst behavior. Pearl argues that we should stop paying doctors and hospitals via fee-for-service, a system that encourages them to give more care, not better care. One alternative is paying doctors a salary and providing hospitals with a lump sum to take care of a population of patients, a model known as “global budgeting.” Rosenthal argues that the FDA should be overhauled, along with patent law for drugs, and the approval process for both drugs and devices reformed. Amen to both and most of their other policy prescriptions. (Except for one: Pearl wants doctors to be in charge of everything. Physicians were given a lot of autonomy early in the twentieth century, power they used to protect their incomes at the expense of building a more equitable and effective health system. I would argue that what health care needs is a dose of democratic input from the patients and communities it is supposed to serve.)

Where both books fail is in thinking about how these policies can be enacted as legislation or regulation. Health care is the largest single donor to political campaigns, and both sides of the aisle in Congress act like wholly owned subsidiaries of the industry. The FDA has become a captive agency whose employees’ salaries are paid for in large part by fees charged to the very industries the agency is supposed to regulate. Against the immovable $3 trillion rock of health care, Rosenthal and Pearl provide no “theory of change,” as many philanthropies and government sectors have taken to calling a description of the forces and causal links needed to bring about social change.

Donald Berwick, a pediatrician and former head of the federal agency that oversees Medicare and Medicaid, argues for a theory of change that requires activist revolution. In a 2014 essay in none other than the staid Journal of the American Medical Association, Berwick wrote that the antidote to health care’s “confiscation” lies in “mobilization—the political mobilization that ended the Vietnam War, began to deliver on civil rights, [and] birthed modern feminism.” He’s right. Enough with talking about reforming health care and formulating policy solutions that will never be enacted. It’s time for citizens to take to the streets and the voting booth. But in order for people to be willing to devote themselves to the long haul of a social mobilization, they first have to wake up to the fact that they are being harmed by a tragically corrupted system. These books can help spark the outrage that’s needed.

Shannon Brownlee

Shannon Brownlee is senior vice president of the Lown Institute, a nonpartisan public policy think tank based in Boston. She is also cofounder of the Right Care Alliance, a network of physicians, nurses, patients, and community activists advocating for a transformed and uniquely American health care system.