Chapter Eight: My Costs

NephJC Work Group member Anna Burgner summarized this chapter. Dr. Burgner is the associate nephrology fellowship program director at Vanderbilt University Medical Center where she is an Assistant Professor of Medicine in the Division of Nephrology and Hypertension.

Why did I agree to summarize an article on money? I don’t like talking about money. I really don’t like talking money in the hospital. I’m not very knowledgeable about what the hospital charges for most of the labs and tests I order.  As we learn in this chapter I’m not alone and it’s not hard to figure out why.

Topol starts this chapter discussing Steven Brill’s 2013 TIME article “Bitter Pill: Why Medical Bills are Killing Us—How outrageous pricing and egregious profits are destroying our health care”. He credits Brill with finally bringing the attention to health care costs that it deserved. Brill’s article and the multitude of articles that followed exposed not just the markup on these items but also the extreme variability in this mark up from hospital to hospital. Some hospitals charge as much as 10 to 20 times the price set by Medicare and a single Tylenol tablet can cost as much as $1.50.

Topol then goes on to tackle the issue of waste in the U.S. health care system, which is estimated at more than 6% of the US GDP. A large portion of waste is “unnecessary services” which comes in at $210 billion a year. He gives the example of $4 billion a year being spent on partial meniscectomies a year, the most common operation in the US. A randomized trial found no difference in outcomes between a sham operation or the partial meniscectomy. Of course all procedures run the risk of complications. Complications typically lead to higher reimbursement in the US medical system. Although not all complications are avoidable, complications on unnecessary procedures are certainly avoidable!

Waste also includes medications, medical imagining (and the 3-5% of patients that will get cancer from their scan), unproven high tech therapies (think robotic surgery and proton beam radiation), and even the annual physical. As a frequent prescriber of medications, I found his arguments pretty sound. $2 billion spent yearly on testosterone gels to treat “low T” despite the increased risk of coronary artery disease and heart attacks.  $9 billion spent yearly on ADHD treatment most of which is unnecessary or harmful.  He also argues that if we applied pharmacogenomics more regularly we could avoid both complications and ineffectiveness of certain medications. Unfortunately we only have pharmacogenomics information for only 2% of drugs on the market.

He next turns to comparing the U.S. health care system with the world. I didn’t find it surprising to find that we spend at least twice as much per capita per year as any other developed nation. Unfortunately our increased spending has not improved our health and we are last of the eleven wealthiest nations for overall health care. Other governments use their influence to set drug and device costs for all. For example, in the UK the National Institute for Health and Care excellence dictates what costs it will accept and has rejected new drugs where the company refused to negotiate an acceptable price. The. U.S. government does nothing to regulate these costs. 

Not only are costs variable but also most patients do not know what they were charged or what their insurer paid.  As I mentioned above, physicians also do not typically know what is being charged.  Most of the time costs are not displayed and it can be nearly impossible even for motivated parties to find. Trials at displaying costs to physicians in real time have not gone far as physicians have not wanted to have to factor in cost data or found it unethical to factor this in when trying to deliver the best care for the patient.  All is not lost though, some medical schools are putting emphasis on knowing and sharing cost data. There is also a surgery center that posts pricing for all their operations and services and even is willing to price match. This has lead to many other facilities in that area to do the same. 

Increasing cost transparency is coming. Many states are considering legislation to increase transparency. All that remains to be seen is if it lowers health care costs and how it affects the overall health care of the patient.