Ray Carter | October 7, 2019
Expert: Lack of transparent pricing, unneeded procedures, driving up health costs
Politicians’ attempts to increase insurance coverage will do little to reduce medical costs or ensure appropriate medical care, according to a top medical expert.
“We don’t have an insurance crisis in the United States,” said Martin Makary, a professor of surgery with the Johns Hopkins University School of Medicine. “We have a pricing crisis. We have a cost crisis. What we are hearing about from Washington is really different ways to finance the broken health care system, not how to fix the broken health care system.”
Makary has conducted a national study of hospital billing practices and authored a related book, The Price We Pay: What Broke American Health Care—and How to Fix It, that discusses that issue and includes many stories of patients sued by their hospital. As the featured speaker at the Oklahoma Council of Public Affairs Liberty Gala in Tulsa, Makary highlighted how price transparency can reduce medical expenses and how other cost-drivers are unrelated to citizens’ insurance status.
Markary said “inappropriate care” and “pricing failures” are the “real root drivers” and reason that “health care costs so much in many circumstances.”
Inappropriate care, in which people are given expensive procedures and treatments that are not required, is widespread, Markary said. For example, he said appendicitis can now be treated with antibiotics rather than surgery in 75 percent of cases, based on research. Yet surgery remains routine. He cited the over-prescription of opioids as another example.
“There’s an average lag time between evidence and practice of 17 years,” Markary said. “That’s not right.”
Markary also said medical officials “have been measuring the wrong things.”
“We’ve been measuring what happens after we do something,” Markary said. “Somebody comes in. We decide to do surgery. We measure the infection rate. We measure the readmission rate.”
But in many cases he said the most important thing to measure is, “Did they need that procedure?”
Markary said surgeons who do knee replacements indicate up to 20 percent of such surgeries may be unnecessary. He noted a national survey conducted of 2,100 physicians in 2017 asked participants what percentage of care they believe is unnecessary, “not counting your own practice.” The doctors estimated 21 percent of care is unnecessary.
When a procedure is not needed, measurements of subsequent infection rates or other complications miss the big picture and are often skewed by the fact that the initial procedure was not needed, Markary said.
“We have a saying in surgery: If you operate on people who don’t need surgery, you have very good results,” Markary said.
When the surveyed doctors were asked what they thought was driving unnecessary care, one answer stood out.
“The fee-for-service system dominated the answer,” Markary said. “Paying for quantity over quality.”
Markary compared the lack of transparent medical pricing to getting an orange in a supermarket and then being told it costs $5,000 when it’s rung up at the register—and then being told you can’t put the orange back. He said medical pricing today is comparable to being told you can’t learn the cost of an airplane ticket until after the flight. People would find such situations “absurd” and a clear sign of a “dysfunctional marketplace,” Markary said. Yet he noted that is how medical pricing operates today.
In the few areas where price transparency exists in health care—such as LASIK eye surgery or cosmetic procedures—prices have fallen through the years even as the cost of other forms of care has skyrocketed, he noted.
The lack of price transparency for medical treatment causes things to happen “that shouldn’t happen,” Markary said.
He said 64 percent of Americans report delaying or avoiding health care because of fear of the resulting bills. Half of women with stage IV breast cancer report being harassed by medical debt collectors.
“That is a disgrace,” Markary said. “And these money games and predatory billing now threaten the great public trust in the medical profession.”
He cited a single mom in New Mexico who was sued by her hospital after treatment and had her paycheck garnished. When Markary reviewed the woman’s bill, he found it to be a “frivolous bill for unnecessary care.”
The excuses offered by large hospitals for inflated bills often fall apart upon closer inspection, he noted.
“Hospitals complain of razor-thin margins,” Markary said. “Hospitals are on track this year for their largest profit margins in human history.”
The hospital charging the highest prices in the United States is located near the ski resort in Vail, Colorado, Markary said.
“If you break your leg, you will go that little hospital next to Vail, and you will get the highest prices that you will see in the United States for routine medical care,” Markary said. “Now, are there so many uninsured, homeless, immigrant skiers at Vail ski resort?”
Markary and his research team found one hospital had sued 25,000 people in a town of 28,000.
Nationally, the most common person sued by a hospital is an employee of Walmart. Postal workers are the second-most common group sued, and food-service workers ranked third. Ironically, the fourth-largest group sued by hospitals, based on source of employment, is the hospitals’ own housekeepers and nursing staff.
“Hospitals were built to serve their communities, not to take advantage of people at a time when they’re vulnerable,” Markary said. “These money games and predatory billing practices now threaten the great public trust in the medical profession, and we need to stop it, once and for all.”
Director, Center for Independent Journalism
Ray Carter is the director of OCPA’s Center for Independent Journalism. He has two decades of experience in journalism and communications. He previously served as senior Capitol reporter for The Journal Record, media director for the Oklahoma House of Representatives, and chief editorial writer at The Oklahoman. As a reporter for The Journal Record, Carter received 12 Carl Rogan Awards in four years—including awards for investigative reporting, general news reporting, feature writing, spot news reporting, business reporting, and sports reporting. While at The Oklahoman, he was the recipient of several awards, including first place in the editorial writing category of the Associated Press/Oklahoma News Executives Carl Rogan Memorial News Excellence Competition for an editorial on the history of racism in the Oklahoma legislature.