Dr. Marty Makary is shedding light on what is driving up medical costs and eroding the public’s trust in healthcare. In his new book, “The Price We Pay: What Broke American Healthcare- and How to Fix It”, Dr. Makary provides an inside look at how billing practices take advantage of America’s most vulnerable.
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Dr. Marty Makary, a surgeon at John Hopkins Hospital, became seriously concerned about widespread predatory billing practices that are eroding the public's trust in healthcare. In response, the best-selling author wrote the new book, “The Price We Pay: What Broke American Health Care- and How to Fix It” and is raising awareness around factors contributing to the problem. Let’s explore a few of the driving forces discussed in the book that are leading to higher healthcare costs and growing personal debt.
A Growing Burden of Debt
In his book, Makary identified 1 in 5 Americans as having unpaid medical debt. He also refers to a study by the Kaiser Family Foundation that revealed 70 percent of Americans have cut back on basic needs (i.e. food and clothing) in order to pay their medical expenses. The Kaiser study also found an eye-opening 58 percent of Americans take an extra job or work additional hours and 41% borrow money from family or friends to cover medical bills.
Makary highlights a local hospital in Carlsbad, New Mexico that had a practice of hiking prices and then suing patients who were unable to pay. A Carlsbad county clerk reported the hospital cases accounted for 95 percent of the town’s lawsuits. And according to the book, this was not an isolated incident. Thirty-seven percent of U.S. hospitals filed over 20,000 lawsuits in 2017, including nonprofit and faith-based hospitals.
Detached Hospital Administrators
In the book, Makary reveals hospital administrators are often unaware their hospital is suing patients. In an interview with FierceHealthcare, he states, “I found sometimes hospital executives, board members and certainly our research supports doctors not knowing about this practice. And when they find out, the clinicians are outraged. By and large, Board members want it to stop…”. Healthcare experts have argued with Makary that “it was not a problem that was ‘diabolical’, they just weren’t proximate to the issue”. Makary further claims all the revenue generated from suing patients amounts to less than the amount of the CEO’s pay raise for one year, ultimately making the lawsuits unnecessary.
Prospecting and Predatory Screening
Visit any churches, community center or senior living facility and you will most likely find advertising for an on-site health fair offering a variety of “free screenings”. Makary submits these screenings are not always medical professionals serving the public, but rather, a way to “prospect” patients for further testing and unnecessary treatments. For example, a vascular screening fair is conducted and patients are “nudged” by the sponsoring physicians into further testing and ballooning, stenting and lasering of non threatening plaques in leg arteries. The sponsoring physicians then make large amounts of money from unnecessary tests and procedures while insurance companies and the rest of us are left with the costs.
Bill Mark-Ups
In the FierceHealthcare interview, Makary expresses concern for the decline of public trust due to hospitals marking up prices as high as 23 times than what is paid by Medicare. Hospitals also use software called “chargemaster” to automatically inflate prices toward a desired profit margin to compensate for charity care. However, according to Makary, the data does not support this assertion.
Getting Rich in Healthcare
In his book, Makary makes points out price markups in healthcare extend well-beyond the hospital and people are getting rich. For ambulance and helicopter services, markups can result in patients receiving an unexpected surprise bill. With three companies now owning 75 percent of these helicopters, Makray writes “wealthy business people” are taking advantage of Americans “when they are most vulnerable.''
But, there’s more. Based on early 2019 data, U.S. hospitals were on target to reach their highest margin in history while rural hospitals are closing. According to Makary, large hospitals use sophisticated cost-shifting to buy new buildings, pay down debt and increase executive pay with hospital profits.
How Can We Fix Our Healthcare?
Makary highlights the Free Market Medical Association (FMMA) and making medical costs transparent and fair regardless of who is paying as a move in the right direction. For example, the Surgery Center of Oklahoma is now offering one fair price, regardless of who is paying instead of other complicated pricing methods.
What are your thoughts on the motives behind health fairs and free health screenings?
