Uwe E. Reinhardt: Americans Are Shocked, Just Shocked, Over Hospital Bills – NYTimes.com

Capt. Louis Renault’s famous line in the movie “Casablanca” comes to mind as I behold the reaction to the journalist Steven Brill’s 36-page report “Bitter Pill: Why Medical Bills Are Killing Us,” published in a special issue of Time last week. Mr. Brill was swiftly invited to appear on “The Daily Show with Jon Stewart” and on “Charlie Rose.”

TODAY’S ECONOMIST

Perspectives from expert contributors.

Americans are shocked, just shocked. But what they should have known for years is that in most states, hospitals are free to squeeze uninsured middle- and upper-middle-class patients for every penny of savings or assets they and their families may have. That’s despite the fact that the economic turf of these hospitals – for the most part so-called nonprofit hospitals – is often protected by state Certificate of Need laws that bestow on them monopolistic power by keeping new potential competitors at bay.

As George Bernard Shaw, whose works include “The Doctor’s Dilemma,” might have put it, that any lawmaker would grant hospitals monopolistic powers plus the freedom to price as they see fit is enough to make one despair of political humanity.

Mr. Brill vividly illustrates the harsh financial mauling that the hospitals covered in his report – all nonprofits – visit on uninsured middle-class Americans stricken with serious illness.

Often these people operate small businesses or are entrepreneurs in start-ups and cannot afford anything other than skimpy health insurance with strict upper limits on coverage. When they fall ill and require hospitalization, they become easy marks for what I think of as “extreme billing.”

In fairness, let me note that we cannot be sure whether the vignettes Mr. Brill presents are representative of the entire hospital industry or the policies of the proverbial few bad apples, a line that may well be taken by representatives of the hospital industry.

It does not take away from Mr. Brill’s brilliant journalism – especially his use of the Form 990 on which nonprofit hospitals must report their financial performance to the Internal Revenue Service – nor from Time’s brilliant marketing to note that the practices Mr. Brill reports have been well known to health-policy analysts and health-policy makers for at least a decade. And they should have been known to broad segments of the public as well – certainly to news organizations.

As early as 2003, Marilyn Werber Serafini’s “Health Care — Sticker Shock” was published in The National Journal, which is well known to Congressional lawmakers and their staffs.

Also in 2003, The Wall Street Journal began publishing on its front page a series of investigative reports by a staff reporter, Lucette Lagnado. In one article she reported on patients being hounded by collection agencies and their lawyers, only to end up in jail for failing to make court appearances in connection with their hospital bills.

Yale-New Haven Hospital, prominently mentioned in Mr. Brill’s report, was featured in one of Ms. Lagnado’s sad stories. I wish Yale University, where I received my doctorate, would withdraw its hallowed name from that legally independent hospital.

via Uwe E. Reinhardt: Americans Are Shocked, Just Shocked, Over Hospital Bills – NYTimes.com.