American Health Care is Broken, Especially in South Texas

Brownsville and Harlingen in deep South Texas leads the country in the highest health care costs with a markup rate of 940% of Medicare, followed by three other nearby cities of McAllen, Edinburgh and Mission……………..

Plan sponsors in the Lower Rio Grande Valley in deep South Texas should take note. Purported PPO “discounts” as high as 70% sounds good. The problem is the starting point. As long as a hospital can control the denominator, any discount can be achieved. Want a 95% discount? No problem.

The Following Article Referred By Doug Aldeen – General Counsel and ERISA Health Care Attorney (View full profile)

American Health Care is Broken, Especially in Texas. What Can We Do About It?

Physician Marty Makary’s new book shows how sky-high medical bills can ruin patients’ lives—but puts the burden on individuals to demand change.

By Sophie Novack

Add yet another first place health care ranking no one wants for Texas: We have the highest hospital bills in the country. 

A new study has found that Texas prices (before insurance) were on average 6.4 times higher than the Medicare-allowable amount in 2018, according to researchers at Johns Hopkins, who looked at Medicare fee-for-service claims around the country that year. The four most expensive metro areas were in Texas: Brownsville-Harlingen led the country with a markup rate of 9.4, followed by Laredo, El Paso, and McAllen-Edinburgh-Mission. All are on the Texas-Mexico border, in one of the poorest parts of the state with one of the highest uninsured rates, where residents are often forced to forgo care or get stuck with bills they simply cannot pay.

The study corresponds with the release of a new book by one of its authors, Johns Hopkins surgeon and health policy professor Marty Makary. In The Price We Pay: What Broke American Health Care—And How to Fix It, Makary documents his travels around the country to illustrate how U.S. health care prices have skyrocketed, leaving uninsured and insured patients on the hook for astronomical bills, with little warning or recourse. Among the most shocking revelations: Some hospitals routinely sue patients for payment and garnish their wages, and some doctors do unnecessary procedures for reasons of greed or convenience, including one obstetrician with a 95 percent C-section rate.  

Recent journalism series have shined a light on particularly egregious hospital bills, often leading to dramatic reductions in the charges for patients profiled. But every bill can’t get its own news story—nor should it need to. Makary’s book is a call to action for medical professionals to speak out, businesses to look for better deals, and patients to push back on prices. But it puts much of the onus on individuals to challenge powerful insurance companies and hospitals. The book stops short of advocating for large-scale government solutions like Medicare for All, or delving too much into the elephant in the room: The gaping partisan divide over how big a role government ought to play in health care.

Makary talked to the Observer about his findings and what they mean for Texas.

Q: In a couple sentences: What broke American health care and how do we fix it?

It’s three fundamental issues: pricing failures, inappropriate care, and middlemen. Imagine shopping for an airline ticket on a travel website with no prices. And airlines would send egregious bills after the flight, arguing that they cannot provide a price [before], since they don’t know if the flight will be delayed, or if you might consume a beverage.

In my opinion, the research study of the decade was a small study at the University of Iowa, where a researcher called 101 hospitals that do heart surgery in the United States and simply asked how much a heart bypass operation costs. Only half the hospitals could give a price. Of those that did, the price ranged from $44,000 to about half a million dollars. And there was no association with quality. In other words, price gouging is rampant.

You’re a medical professional, but you’re arguing that a root of the problem is overmedication, overtreatment—that one solution is actually less medical care.  

The opioid crisis was a wake-up call. That was one medication that was over-prescribed; think of all the others. The reality is a fraction of health care stakeholders have engaged in some of the most egregious overreaches, financially terrorizing people by suing low-income patients who can’t pay an overpriced bill. Most hospitals behave well and are led by good people. But when the trend is to engage in predatory billing, we health care workers are in a unique situation to say, “Hey, these are our patients.” Right now we’re seeing a movement for more honest and transparent care. Broad health care literacy is step one, and the aim of the book.

Texas has unique health care challenges: the highest uninsured rate, the most rural hospital closures. And one of the main reasons given for these closures is the high uncompensated care burden on hospitals. How does what you’ve seen in Texas fit into the issues we’re talking about?

Texas leads the country in hospital prices. Oftentimes, we don’t know the amounts actually paid by [patients] for these high prices, because discounts are considered proprietary information. My question is, what would happen if it were public information? It would allow competition and a global reduction in prices as we’ve seen in any other industry.

Oftentimes, it’s whatever the market will allow. Sometimes health care prices are rational, sometimes they’re irrational. We’re often told by hospital leaders that no one is expected to pay the full charge; we’re told it’s not a real price. We’re told it’s simply a starting point for insurance negotiations. But increasingly, Americans are being asked to pay the full charge.

What’s your take on surprise billing legislation that passed in Texas this year and has moved in a handful of other states?

Surprise billing is a symptom of a larger problem. While we need immediate relief for patients being gouged by out-of-network services, even at in-network facilities, what we need is to move towards a more patient-friendly pricing system, so the information is available for patients and employers to make rational decisions.

I wondered if the book was going to end with some kind of single-payer proposal. It didn’t, but I’m curious what you see as government’s role in fixing this problem, in the context of efforts by Republicans to eliminate the ACA on the one hand, versus some Democratic proposals for Medicare for All?

We don’t have a competitive marketplace, we don’t have transparency. Sunlight is the best driver towards good. In my book, I opened with the story of endovascular procedures like arterial stents being placed in the leg arteries of Medicare beneficiaries. It’s a well-known area of overuse. It’s entirely funded by your tax dollars. Medicare for All does not fix that problem. I do see the appeal—Medicare for All would cut out some of the middlemen. However, I have serious concerns about the long-term consequences given our current Medicare under-funding situation.

You end with a “call to action” for patients to get pricing information. But often it doesn’t work. I got a bill recently for a doctor visit I’d already paid for, saying I owe more because my insurance covered less than expected. And I’m a health care reporter. So what else can patients do?

When everyday Americans demanded nutrition labels to know the calorie counts in fast-food restaurants, policymakers and the industry responded. When people demand more honest and fair medical care, I believe good things will happen. I’m referring to asking for prices when you’re seeking a place to deliver your baby. I’m talking about using GoodRX and other online platforms to shop for the price of a medication. I’m referring to asking how much a CAT scan or MRI will cost before you have it done.

We need communities to hold their hospitals and insurance companies accountable. And we need people to contact members of Congress because right now, the Alexander Murray Bill is a powerful reform that the special interests are trying to sabotage, which addresses drug pricing, health insurance costs, air ambulance pricing, surprise bills.

We should have a more fair and equitable billing system. As hospitals are now being evaluated based on their complication rates, I’ve proposed that we also create standards for billing quality.  Billing quality is medical quality. And financial toxicity is a medical complication. Taking care of a patient is taking care of the entire patient.

This interview has been edited for length and clarity.

Related Blog Postings:

South Texas Health System Defends 920% Price Markup

Hospital PPO Pricing Exposed in South Texas

Read more from the Observer:

The Texas Observer