Monday, December 28, 2015

Book Review: "America's Bitter Pill" by Steven Brill (2015)

The American health care system is obviously a gigantic mess. Brill's comprehensive examination of Obamacare definitely warrants praise, but are his own ideas for insurance reform worthy of the same commendation?

By: Jimbo X

As of 2015, the health care sector represents somewhere between one-fifth and one-sixth of the total U.S. economy. More than $3 trillion was spent in 2014; that year, American consumers doled out $17 billion on artificial hips and knees and $85.9 billion treating back pain alone

If nothing else, America's Bitter PillSteven Brill's 2015 expose of the American health care system - clearly indicates ours is a culture of medical excess. Whereas there are 5.9 MRI machines per one million English residents, in the U.S. there are 31.5. Medtronic, the nation's leading medical equipment manufacturer, has an annual gross profit margin almost twice that of Apple. "This is the only industry where technological advances have increased costs instead of lowering them," the author states fairly early on in the tome. 

Of course, the major pharmaceutical companies have considerable political clout. For one thing, there are no prescription drug price controls in the States; despite nine out of the 10 largest pharmaceutical manufacturers getting hit with illegal marketing and kickback penalties, they nonetheless spend four times as much money lobbying than military/industrial stalwarts like Boeing and Lockheed-Martin (which more than likely explains the aforementioned lack of price controls.) 

Unsurprisingly, about two-thirds of all bankruptcies in the U.S. are now health care-related. Brill's book points the finger of blame primarily on insurance companies, who have managed to cajole physicians and hospitals into fairly lopsided partnerships more or less designed to send the uninsured into insolvency. At heart, America's Bitter Pill is an examination of why that's the case, and why political reforms just haven't worked in creating a more equitable consumer health care market. It's also far and away the most complete history of the Affordable Care Act likely penned thus far - the amount of research Brill conducted (the dude got his hands on classified memos from back in '07), is utterly astounding. 

We begin by exploring the roots of the U.S. health insurance system. Although largely considered a democratic ideal, the idea of national health insurance was first floated by Teddy Roosevelt in 1912. The first major health insurance firm, Blue Cross, began in 1929; with the National War Labor Board stating that such policies weren't a violation of World War II-era wage controls, the number of Americans with private insurance plans exploded, skyrocketing from 10 million in 1940 to 76.6 million in 1950. After labor unions and the AMA shut down Truman's proposal for universal health care, the IRS decided that insurance benefits were tax-exempt; heading into 2007, 162 million working-age Americans were covered by some form of employer-paid health insurance, with about 45 million others uncovered (and, presumably, dependent on Medicaid services.) 

With medical technology costs pushing health care expenses upward, insurance premiums have to go up to cover higher policyholder claims. This runs headlong into another health care crisis - the staggering number of Medicare dependent elders, who are living longer and thus gobbling  up even costlier taxpayer-subsidized medical procedures and treatments. To give you an idea of just how gigantic this problem is, as of 2015, roughly a third of the federal budget is now dedicated solely to public health expenditures (at a 2008 health care reform summit, some analysts predicted that Medicaid and Medicare expenses combined would surge to represent half of the budget by 2050.)

So with social security expenses reaching critical mass, it's not surprising the federales would have sought to yank more dough out of the public's pocket sooner than later. The strange thing is, that notion was more of less born of solid conservative ideology, with Richard Nixon promoting a nearly identical iteration of the Affordable Care Act all the way back in 1972. Furthermore, it was prominent conservative ideologue Stuart Butler who first rallied behind the idea of the "individual mandate" in 1989 (which sought to scrap the federal tax break on employer-paid insurance), with Mitt Romney actually implementing it as public policy in Massachusetts in 2007. 

The bulk of America's Bitter Pill covers the time frame from the Affordable Care Act's Senate passage in late 2009 (as well as the backroom deals the Obama Administration had to make with health care industrial leaders to get that far in the first place) all the way up to the disastrous implementation of the online federal marketplace in late 2013. Along the way, Brill dissects not-for-profit hospitals' dubious use of notoriously difficult to interpret "chargemaster" bills and how "Medigapshortfalls screw over consumers royally (perhaps the most memorable anecdote is a passage about a man charged $95,000 by a Texas medical center, when the same respiratory services he received would've cost him only $17.94 under Medicare.) While 4.8 million Americans did end up enrolling in the federal exchange (with another 2.3 million signing up for the nation's assorted state exchanges) by April 2014, Brill - who, judging by his endless praise for Ted Kennedy, is clearly a cheerleader for the Democrats - notes the nation's "employer-driven health care" system remains troublesome, even after the ACA's implementation. 

Per Brill's numbers, the average family of four in the U.S. is expected to pay $72,000 a year on health care expenses. With premiums rising, on average, 8 percent from 2014 to 2015, approximately one-fifth of the U.S. gross domestic product is now tied up in medical costs. Pessimistically, he states the federal measures to get more people purchasing health insurance  has actually done very little - if anything - to make health care in the U.S. any more affordable. "It is just stuffing more people into the jalopy, which is only going to make the jalopy more expensive to keep running," he utters at one point. 

Alas, while Brill does an outstanding job highlight the myriad problems of the U.S. health care system his ultimate solution is far from appetizing. Greatly inspired by Geisinger Health System's flat fees in Pennsylvania and the University of Pittsburgh Medical Center's "integrated delivery and finance systems," Brill deduces that the solution to our big, fat medical mess is to simply allow hospitals and physicians to offer their own insurance. If that sounds like a stretch, it becomes even more groan-inducing once you factor in Brill's other ideas for establishing "integrated health care oligopolies," which he is convinced will view medical treatment and services as a public good and somehow not exploit the hell out of consumers the same way today's insurance firms do.

While Brill's quasi-socialist "solution" sounds appealing - who wouldn't want to live in a national health care system in which hospital operating profits are capped at 8 percent and the excess income is used as resource pools for struggling providers? - his ideas are just too pie-in-the-sky, even as Utopian conjecture. While he views his solution set as a more realistic and approachable alternative to a single-payer system, many of his notions - CEOs can't make more than 60 times whatever the lowest paid physician on staff makes, providers are verboten from charging uninsured patients more than insured clients, etc. - a lot of those same measures are both more totalitarian and less digestible than even the Tommy Douglas nationalized model in Canada. Following such a thorough, detailed examination of the myriads of woes ailing the public-funded, private-sector dictated health care system, Brill's big epiphany just winds up a colossal squandering of Pulitzer-level research. 

As a blueprint for "fixing" the U.S. medical system, America's Bitter Pill is a big disappointment. However, as a repository on data for the current state of America's health care model - as well as a quick overview of just how much clout insurance companies have on just how much and how little care the average citizen receives - Brill's book is unquestionably a fine resource.

I, for one, had no idea that Medicare Part D explicitly forbids the government from negotiating prices with pill manufacturers -  thus insuring taxpayers spend 106 percent of the average wholesale price of prescription drugs - until I read this treatise. Nor was I aware that reliable estimates tag the cost of unnecessary health care expenditures in the U.S. at $750 billion annually, or that the Obama Administration ultimately spent $3.52 billion on the technological infrastructure of the ACA website, while Kentucky was able to build a far more functional online system with less than $154 million.

In short, America's Bitter Pill is a tremendous diagnosis of the assorted ills plaguing U.S. health care, and certainly the finest write-up on the history of Obamacare I've ever read. Unfortunately, the author's prescribed remedies aren't just undesirable ... they almost cross over into the domain of political quackery


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