In Europe, health care does not bankrupt people. And universal coverage means they get the care they need.

A recent note from a friend of a friend:

‘Here we are in the Pyrenees foothills outside Perpignan [France]. An hour away from the closest ER. X was in the hospital with afib [atrial fibrillation, a heart rhythm disturbance] before we left for France in July and I’m worried about being so isolated. So in Sept he seemed disoriented for a few moments and I was worried so called the French version of 911. I just told them what was going on and they connected me directly with a doctor. They sent an ambulance. The EMTs thought he was OK after checking. But just in case, they SENT A HELICOPTER WITH A DOCTOR from Perpignan. Who also thought he was probably OK. But to be safe they took him by helicopter to Perpignan, arriving in nine minutes. They kept him overnight and let him go the next morning. He’s fine. I had to call them three weeks later to ask for a bill. They emailed it to me. It was itemized: ER, helicopter, two cardiologists, several imaging tests, overnight stay. Total price (for the uninsured): 249 euros.’

Wow! How much is a Euro? Must be like 10, or 100, times as much as a dollar, right? Um, no. Actually, with its recent fall the Euro is just about exactly $1. So $250 for all that? Unbelievable! In fact, if the Euro was worth $100, it would be $25,000, which would still be a lot less than the cost would have been in the US. If you could get that kind of care!

Indeed, that was the situation for this same family earlier…

‘Five years ago X had another chronic problem which has mercifully since been totally fixed. We came here, it started up, and we ended up with five ER admissions, six weeks in private rooms, 3 specialists, transfusions, intensive care, many tests, IV antibiotics etc etc etc. Total bill: about 20,000 euros over 6 weeks. Then back to [hometown in US], one night at [university hospital]: same price.’

What is going on here? It really is unbelievable! Except what is unbelievable, to people in France, or most of Europe, or most countries in the wealthier part of the world, is that we would find their out-of-pocket cost of care surprising. Everyone thinks, to some degree, that what they know, what their world consists of, is pretty much normative, that it is the same for kind of the same people everywhere. In fact, even when they intellectually know that it is not true, it is still one’s instinctive reaction, to think that what is normal for you is normal. Luckily for the French, what is normal for us in the US, in regard to the cost of healthcare, is not normal for them. And, of course, unluckily for us. And this is not a recent change.  It wasn’t even new back on January 21, 2012, almost 11 years ago, when I wrote ‘One thing to NOT worry about: paying for health care -- in France. Or for decades before that. In that piece, I wrote about going to see the film Le Havre and noted that in it a really poor person spends weeks in the hospital and the one thing no one is worried about is the cost. This could never be true in the US.

Doesn’t this upset you? Don’t you think something is wrong here? What is going on????

Sorry.  Of course it does. But, you know, it must be costing someone a lot of money, even in France, or wherever. All that health care, all those hospitalizations, all those tests, do not come cheap.

No, they don’t. But they don’t have to be so expensive. There is incredible markup on the bills and amount paid in the US. Not that anyone actually knows what the price is, or that there is any consistency to it.  US hospitals do have a Master Price List (like “one gall bladder surgery, $X) but it rarely is what is either billed or paid. These hospitals have deals cut with large insurers on how much they will be charged, and pay, on behalf of their customers. Medicare, the government insurance system for the aged and disabled, sets its own rates as to what it will pay (and the private insurance rates are usually expressed in “multiples of Medicare”). Really the only people who might be charged the “list price” are those who are uninsured and poor, those least likely to be able to pay it – although very few of us could pay those amounts! The couple who wrote about their experience in France is obviously well enough off to have spent that time in France, and to have paid their bill, but just being reasonably well off is far from sufficient to be able to pay hospital bills out of pocket.

Let us be entirely clear and simple: The reason US health care costs so much is profit. It is that everyone, everywhere along the line, is taking a cut. The insurance companies, right from the start, huge profits (and salaries to their executives). Hospital systems, huge markups (and salaries to their executives). Pharmaceutical companies, huge markups (and salaries to their executives). Doctors also, especially in some specialties. I could give lots of examples of those specialties with the highest income/work ratios. It is not because we use “too much health care” – indeed, it is really unlikely that any of us (unless a billionaire or a head of state) could have gotten the care that X did in France, and they did that just “routinely”, because it was what they thought was medically the right thing to do.

That, of course, is the other part of this story. It is not just that the charges and costs to the individual were so much less than what they would have been in the US. As a physician friend pointed out “The dollars and cents issue is important. But freeing the medical community to just do the right thing is immeasurable.” Think about that. At each stage, from the person’s wife calling French 911, to the EMTs who came, to the doctors who decided to airlift him to the city, to those who cared for him in the hospital, the decisions that they made were medical, what, in their judgement, was the best for the health of the person/patient. At no point did the cost of the care enter into their decision. Well, I take that back. It may have. But what did not enter the decision was “what kind of coverage does this particular person have? Does it pay enough? Does it cover what we want to do? Have they met their deductible? Can they afford the copay?” This is what you would want for your own health care, and it is absolutely what doctors and other health professionals want to be able to do. Once there was a joke (what today would be a meme) that before doing a procedure the doctor would do a “wallet biopsy”. Today, it is more often the hospital, and it is more likely an “insurance biopsy”. This is crazy.  It is crazy. It is unacceptable. And more important, it is unnecessary.

And the cost of health care per capita is much LESS in France, just as the quality of care is higher (as I cited from the Commonwealth Foundation in my last blog post, Premiums are up, people are dying and insurance companies are making out like the bandits they are, October 25, 2022). Indeed, it is less than half the per capita cost in the US. And in France, that includes everyone; no one is without coverage.

Of course, not foreigners, like those visitors from the US, who had to pay their whole bill themselves with no insurance.  All $250 of it.

"It's the prices, stupid!". And they won't tell us what they are...

You wouldn’t buy most things if the price were not labelled, and certainly not if price were not available on asking. Sometimes shopping on the Internet is frustrating because that the prices are not always apparent. When I had to get my sewer routed out, the plumber told me what it would cos (a lot), and my only choice was to have a blocked sewer or try to find another plumber who might be cheaper. But I had that choice, and he told me the price. Even in the American bastion of car buying, where “negotiating” is a tradition, and while YOUR first question is “what is the price”, theirs is “what are you trading in [so we can quote a higher price]”, this is changing, with set prices at many dealers and alternative vendors like CarMax and Carvana.

Where it is almost never true is in purchasing health care, and it is worst when you are most vulnerable and in urgent need of a service -- sometimes even more urgent than routing your sewer line! We think we would almost never buy something first in order to find out what it cost – that would be crazy --  but in fact that is the title of a video by Martin Schoeller recently featured in the New York Times: ‘How Much Does Your M.R.I. Cost? Buy It First to Find Out.’ And that is what it shows. The prices aren’t available in advance, there is no published price list, there is no bar code for the clerk to scan, and no one, pretty much, can tell you how much it will cost. It is not just MRIs, of course; that is just the headline; it is all tests, procedures, surgeries, and consultations from specialists.

One of the people interviewed by Mr. Schoeller, who had severe injuries as a result of being two feet from where to bomb blew up at the Boston Marathon in 2013, says “I had these procedures done, and now I’m getting the prices. It should have been the other way; I should have had the prices first.” Of course. But this is the story all of the people he interviews – regular people, just like us, he notes -- whose lives have been upended twice, first by their health problem and then by the cost that they were never told about, “whether it is through surprise bills or straight-up price gouging.”

In an old expression, you might say “there oughta be a law”. The amazing thing is that there is a law, or at least a federal rule. The Hospital Price Transparency Rule went into effect on January 1, 2021. Per the website of the Centers for Medicare and Medicaid Services (CMS)

Hospital price transparency helps Americans know the cost of a hospital item or service before receiving it. Starting January 1, 2021, each hospital operating in the United States will be required to provide clear, accessible pricing information online about the items and services they provide in two ways:

1.      As a comprehensive machine-readable file with all items and services.

2.      In a display of shoppable services in a consumer-friendly format.

This information will make it easier for consumers to shop and compare prices across hospitals and estimate the cost of care before going to the hospital.

CMS plans to audit a sample of hospitals for compliance starting in January, in addition to investigating complaints that are submitted to CMS and reviewing analyses of non-compliance, and hospitals may face civil monetary penalties for noncompliance. Access a list of hospitals that have been issued CMPs.

That sounds good, right? There is only one problem. They’re not doing it. The article notes that “A recent study by PatientRightsadvocate.org, a nonprofit group that works for price transparency, revealed that only about 14 percent of the 1,000 hospitals it surveyed were complying with the new rule.” That’s right. Eighty-six percent of the hospitals in the US are NOT posting their prices, in violation of the law. While the language on the CMS website, “This information will make it easier for consumers to shop and compare prices across hospitals and estimate the cost of care before going to the hospital”, could have (actually, as far as I know, may have) come directly out of the mouths of a conservative think tank that advocates “consumer choice” as the solution to the costs of health care, they’re not even doing that. These folks want you to shop for health care like you would shop for anything else, choosing the one that provides you the most value for the best price. This was always a completely bad (I was going to say stupid, but it could be simply malicious) idea, but when you can’t even get the prices to compare, it is completely ridiculous.

Back on March 15, 2009 (“Bargaining down the medical bills”) I wrote about an Oprah Winfrey show on which her guests were the late health economist Uwe Reinhardt and Karen Ignani, the then-head of the trade group America’s Health Insurance Plans (ACIP). At one point

Oprah asked Ms. Ignani (and I paraphrase, I don’t have the transcript): “So if I need a $200,000 procedure, why don’t you just pay it?” Flustered, Ignani said, “Well, you presume that the $200,000 is in fact what the procedure is worth; other hospitals may chart less …” – Oprah interrupted her: “I’m sick!”, she said, “I don’t have time to go shopping around to six different places to see where I can get the best deal!”

I added “Unsurprisingly, the audience, made up of regular people, not pundits, applauded wildly.” But, in fact, in 2022, 13 years later, you still could not find the price for that procedure in 86% of American hospitals! Inadvertently, perhaps, Ms. Ignani points to another concern: your insurance company may refuse to pay for your procedure because you could have had it done across town (presuming you live in an area where there is more than one hospital) for less money. But, as Ms. Winfrey so succinctly put it, you weren’t in a position to comparison shop – you were sick!

The woman who was severely injured in the Boston Marathon bombing tells Mr. Schoeller that she had no idea that these surprise bills were coming, because everyone in the hospital was so nice. The fact is that none of those nice people, nurses, doctors, technicians, clerks, was being devious – they didn’t know the costs either. Mr. Schoeller says that it is not just patients, but employers, unions, even the government that cannot get the prices. And neither can staff. While most people would not buy groceries if the prices were not listed, some more well-off folks might. But only a very few would buy a car, or a house, or something else that might cost $200,000 without knowing the cost – unless it was medical care. Obviously, this hits the poor and uninsured worst, as does everything of the sort, but being insured – and even being well-insured – is not a guarantee that you will not be hit with surprise charges. And that you won’t end up like those who speak to Mr. Schoeller. One says “I just ignore the bills now,” and he asks if this might keep her from getting a loan or a credit card. “Of course,” she says. Life ruined?

So medical system IS systematically not only engaged in price gouging, but in fact hiding those prices in clear and direct violation of a federal rule that was put in place to address this problem. It is a system clearly and unequivocally built not to provide health care but to make money for the investors (in “for-profits”) and large organizations (“non-profits”) that provide the care, as well as insurance companies and drug companies and lots of large corporations, at the expense – in dollars and health – of all of us.

The same Uwe Reinhardt mentioned above, when asked why US health care was so expensive, was fond of saying (and co-wrote an article entitled) “It’s the prices, stupid!”. ‘“We depend on hospitals in our communities to take care of us,” Mr. Schoeller says, “But our hospitals are putting profits before patients.”’ He calls for there to be diligent enforcement and stronger penalties for violation of the price transparency rule.

It’s a good idea, but I call for more than forcing hospitals to post their prices. I call for those prices to be reasonable, and to require insurance companies to pay them, and for everyone to have health insurance that does. A universal national health insurance system, such as improved and expanded Medicare for All.

And the elimination of profit from the health care industry.

Hospitals compete for money, not the people's health. We need to stop this.

For decades, Santa Fe, NM, had only one hospital. St. Vincent’s was founded 155 years ago by the Sisters of Charity, but was taken over by the national Catholic corporation CHRISTUS in 2008. It’s a pretty good hospital with about 200 beds, for a small city of 85,000. A couple of years ago, the largest health system in New Mexico, Presbyterian, opened another hospital. It is a big building, but has only 30 beds, so its additional contribution is not primarily general inpatient care. Interestingly, while the hospital is on the far southwest side of Santa Fe, its main medical center building is directly across the street from St. Vincent’s. This is obviously not a coincidence, as it is now firmly in the center of the area in which people are accustomed to coming for medical care, establishing itself, at least for outpatient care, as a competitor.

The point that I want to talk about is not hospitals in Santa Fe specifically but rather competition among hospitals in general. This is not a problem in rural areas and small towns where the struggle is, rather, to hang on to their hospitals at all (often with just a very few inpatient beds, and almost invariably losing money). It may not be a big issue for mid-size cities like Santa Fe. It is a huge issue in the major metropolitan areas where most hospitals and doctors are, and where there are the greatest concentrations of patients (the medical term for what in English we call “people”).

In these areas, you will find that almost every big hospital (or “medical center” or “health system”) has a Cancer Center. And a Heart Center. Centers for Orthopedic Surgery and Sports Medicine are also big. And in the last decade Neuroscience centers have joined the ranks of “must-haves” for each of these centers. Of course, if they deliver babies, they certainly will have a Neonatal Intensive Care Unit. What is wrong with this? Are these not important, serious diseases that can and do kill a lot of people and need treatment? Am I advocating against treating, say, cancer?

Not at all. But while there are a lot of people with cancer, it is a finite number. Was the new Cancer Center just opened to a lot of hoopla at St. Elsewhere necessary because there were many cancer patients for whom there was not room in the Cancer Center at Downtown General, opened a few years ago, and now would have an opportunity to receive treatment? Or, just perhaps, is St. E’s hoping to attract many of the patients, and perhaps the doctors, who currently use DG to instead use their new, glitzy, state-of-the-art facility? Is it a simple matter of competition for a limited market?

If we had a medical care system that was based on the health care needs of the population, we wouldn’t have such redundancy of facilities; we would have enough for all the people who need care and not unnecessarily duplicate services. Downtown General might have centers of excellence in cancer and orthopedic sports medicine, while St. Elsewhere might be great for heart and neonatal care. And, since we are fantasizing about a system in which the driving force is the health of the people, let’s throw in primary care and mental health. But that doesn’t happen. And, in our hypothetical city, even with both cancer centers (and perhaps yet another at Doctors Medical Center), there will still be bunch of people who cannot receive care because they have no insurance or their insurance is poor (i.e., they are “underinsured”).

So, in addition to creating excess capacity, which creates major excess cost, competition in medical care services doesn’t meet the needs of all the people. The true driver of the health system, making money, creates at least three major sources of inequity:

1. The services are only for the well-insured. Entire groups of poorly-insured people are excluded. The services offered by these special centers may be highly-profitable, but only if they get paid. They don’t make money providing care to poor or uninsured or underinsured people. 
2. The services offered are those that are highly profitable, and most often this is for particular procedures. Yes, cancer is bad. So is heart disease. But the real reason for these centers is that these conditions are very well reimbursed by insurers, so the hospitals (and doctors) make a lot of money (provided the patients meet criterion #1, of course). For example, while chemotherapy drugs are ridiculously expensive, of course, making money for the pharmaceutical industry, the hospital makes money on the “administration fees” which are far in excess of the actual cost of administration. In addition, the creation of new “centers” are often driven by a single procedure. No one had big “Neuroscience” centers until the procedure for inserting a catheter into a brain artery to pull out a clot was developed. THAT is reimbursed incredibly well! All of a sudden every big hospital needed a “Stroke Center” and started competing (and paying a lot of money for) “stroke doctors” (who might be neurologists, neurosurgeons, or invasive radiologists) who could do this procedure. But poorly reimbursed services? No matter how much the people need them, don’t expect lots of new centers for primary care. Or mental health. Or even general surgery. Essentially, we discriminate not only against those who are poor or uninsured, we discriminate against those who are unlucky enough to have poorly-reimbursed diseases!
3. The third great inequity is obviously geographic. If you live in a major metropolitan area, and are well-insured, you can have your choice of which hospital is the best for your problem. You consult US News, ask your friends, read the ads. But if you are in a small town or rural area far from such a city, it’s a long trip. And not worth making if you don’t have the money.

What can and should we do? In the long term, we need to eliminate the motivation of hospitals to compete for profitable services by putting them on a global budget, which is what is done in Canada as part of their single-payer health care system, called (interestingly) Medicare. And, of course, we need to cover everyone so there are no people left out because they are poor and uninsured, a universal health insurance system, not “cover more” but “cover everybody”. And by long term, I mean as soon as possible.

In the mid-term, we must change policies to much less dramatically favor certain procedures at the expense of others. Pay more for mental health and primary care. Pay less for cancer drug administration and sucking clots out of brain arteries. Stop making it so much more profitable to do knee surgery than gall bladder surgery. The availability for any kind of procedure should be based on the need for it, not how well it is highly reimbursed. That is a totally backward motivation, and dangerous to our health. This can actually be done by federal policy simply by changing how (US) Medicare values and pays for services. Because Medicare is the largest payer, it sets the market rate. Private insurers may pay more, but it is always “multiples of Medicare”; the ratio of what is paid for one medical service relative to another is set by the federal government.

And while we’re at it, let’s eliminate the universal tax-breaks “non-profit” hospitals get for anything that they do, which are mostly things that will make them money! As evil in many other ways as for-profit hospitals are, they are at least required to pay taxes, and go to the capital markets for capital expansion. No donations to a hospital should be tax-deductible if they are going to be used for a money-making scheme. Again, in Canada capital budgets are separate from operating costs. A hospital is not motivated to increase its operating profit so it can expand and build, to better compete with others. It must apply for additional capital funds, which will only be available if they serve a health need.

In fact, this is something we can do in the near term. As citizens and donors, we can demand that the next opulent fund-raising gala for our local hospital is not for the purpose of expanding money-making services, but rather to expand those services to those who cannot currently access them. The money raised should be earmarked only for, say, providing cancer care at our great cancer center to uninsured people. That would be something for which tax-deductibility is justified.

It is outrageous that our health system in the US is structured to maximize money-making and not health. But as in so much else in our society, those making the money have a lot of it to use to exert their clout. It is going to take a massive national effort by the people to make the changes that we need to have.