The real costs of healthcare

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Steven Brill details the irrational market forces that drive the American health care industry.

It's pretty clear things are broken and in dire need of fixing. The important point Brill makes is that healthcare is not a "free market" system as we usually think of one. It requires an involuntary admission into the marketplace and as such no ability for the consumer to shop around. He also explains why Medicare does so damn well.

I need to pick up a copy of the article.

The article by Steven Brill in this week's issue of Time is outstanding. Time usually has a couple well written pieces per year that make it worth subscribing to.

If any industry needed price controls,it's healthcare.

Mark Hoofnagle over at Denialism blog has a write up on Brill's article.

What is the cause of excess costs in health care Part 4 – Time’s “Bitter Pill”, CEO compensation and the Kafkaesque chargemaster

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Steven Brill’s extensive piece in Time has generated a good discussion once again on why Americans pay so much more for health care than other countries, and while I agree with most of his critiques, he seems to have gotten overly hung-up on the hospital chargemaster.

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The problem Brill is describing is that the costs itemized by hospitals on their bills come from a mysterious document called the “chargemaster”. I’m pretty sure no one knows how the costs are calculated, and I know there is no rational basis for the prices on it. But as shocking as the bills that are generated by these documents are, they are largely irrelevant to the excess costs of healthcare. The chargemaster is a red herring, and despite Brill’s protestations that it is some central evil in health care expenditure, it really isn’t.

In short, the "chargemaster" is another symptom of a broken system, not the cause. Well worth reading as are his other posts on the topic, since they're full of citations and links to the relevant studies.