“The Price We Pay” paints a vivid picture of a healthcare system corrupted by price-gouging, middlemen, and a series of elusive money games in a need of a serious shakeup. Dr. Makary, a surgeon and professor of health policy at Johns Hopkins, shows how so much of health care spending goes to things that have nothing to with health, and he makes suggestions as to what you can do about it.
Dr. Makary has traveled the US, spending time with many physicians and community organizations. He notes that the two root issues driving health care’s cost crisis have become increasingly clear: appropriateness of care and pricing failures.
An example of the former is the Health Fair. Many communities, including churches and schools, sponsor these fairs. Unbeknownst to them, it can be “a business model to recruit patients for treatments they don’t need.” Patients, particularly lower income and less educated ones, trust physicians and other medical professionals to make recommendations. But without adequate information, and depending on how options are presented, patients may well agree to unnecessary or inappropriate procedures.
Price-fixing is exemplified by the giant middle layer of healthcare: the repricing industry. There are thousands of consultants, vendors, and well-paid middlemen. And they are all playing a game, which explains many health care trends, even though it gets little attention in the news, in health reform debates, or in Congress.
The players need power, which leads to increasing consolidation of hospitals and health systems, physician groups, and insurance companies. This behind-the-scenes industry is huge, totally out of control, and has created tens of thousands of millionaires who are mostly unknown. It contributes to the inability to see the real price of care, and to the problem of out-of-network (or so-called “surprise”) bills.
“For too long, the black box of real prices has been protected as a trade secret, resulting in medical centers competing on the level of better parking and NFL game day billboards rather than on quality and value.”
Dr Makary discusses the concept of proxy shoppers, which is the group of people who do comparison shop, thus driving demand for the market to remain competitive. This is common in industries like grocery stores. In the healthcare world, this is seen with self-insured employers, some health plans, and those who truly pay out of pocket. But without transparency in costs, it’s difficult to be a proxy shopper.
Meetings with both hospital and insurance CEOs “quickly digress into pontificating about issues that account for less than 1% of health care costs. For example, we’ll discuss ways to lower infection rates and hospital readmissions rather than tackling the leading drivers of our cost crisis.”
The book is a fascinating read, and it would be far too tempting for me to write about everything Dr. Makary says. He challenges the medical establishment, and reminds us all of medicine’s noble heritage to “Do no harm.”
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