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Times Magazine - Article Summary - Bitter Pill

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The High Cost of Care-Bitter Pill
By Steven Brill

Summary

Steven Brill feels that American health care is eating away at our economy and our treasury and discusses the costs associated with the provision of health care services in the U.S.. The article explores the medical world through the medical expenses incurred by a 64-year-old Janice S., Sean Recchi, A 42-year-old from Lancaster, Ohio and several other egregiously billed patients. The article poses the question: why exactly are the medical bills so high; in particular hospital bills?
The U.S. spends more on health care than the next 10 biggest spenders combined: Japan, Germany, France, China, the U.K., Italy, Canada, Brazil, Spain and Australia. 10 of the 20 occupations that will grow the fastest in the U.S. by 2020 are related to health care. The healthcare industry is also experiencing the acquisition of private healthcare providers by large hospitals. Our textbook would classify this a horizontal acquisition because it involves combining the operations of firms within the same general industry and provides an affective means for the firms to rapidly increase the scope of their operations.
The pricing for services at a hospital are pulled from a chargemaster; which is every hospital's internal price list. No matter how steep the discounts, the charge-master prices are so high and so devoid of any calculation related to cost that the result is uniquely American: thousands of nonprofit institutions have morphed into high-profit, high-profile businesses that have the best of both worlds. They have become entities akin to low-risk, must-have public utilities that nonetheless pay their operators as if they were high-risk entrepreneurs. As with the local electric company, customers must have the product and can't go elsewhere to buy it. They are steered to a hospital by their insurance companies or

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