A service of the California Health Care Foundation

The Bitter Truth: Brill’s ‘Bitter Pill’ Changed Nothing.

It takes the average person about seven minutes to read a 1,600-word blog post.

“Bitter Pill: Why Medical Bills Are Killing Us” — Steven Brill’s opus on the U.S. health care systemclocks in at 24,000 words.

Do the math.

Yes, “Bitter Pill” asked a lot of its readers. But it delivered, too: For millions of Americans, the lengthy Time story was their first crash-course in health care finances.

And that was a key reason why the February 2013 article was “one of the most important stories of the decade,” proclaimed Don Berwick, the outspoken ex-head of CMS.

“If this [had] appeared in a newspaper, it would be a heavy favorite for a Pulitzer Prize,” predicted Paul Raeburn, the media critic for MIT’s Knight Science Journalism program. “And it should win a National Magazine Award.”

(One year later, it did.)

Brill is back, with a brand-new, book-length version of “Bitter Pill” that he promises will offer “much more” detail about the failings of American health care by focusing on the Affordable Care Act.

And the national media this week is treating Brill like a conquering hero, offering him:

But is the attention deserved? For all its words — for all its acclaim — did the original “Bitter Pill” actually change anything?

“I am not sure it did,” Princeton economist Uwe Reinhardt says now.

“Nothing shocks anyone anymore about U.S. health care, even the shocking stories that Brill told in his inimitable style.”

What Brill’s Story Told

The idea behind “Bitter Pill” sprouted in a Houston hotel room in 2012, as Brill stared off at the gleaming medical centers dotting the skyline.

Brill, a lawyer and writer who also founded Court TV, was in town to speak at an education conference. But thinking about those skyscrapers, about the big business of American health care, got Brill desperate to solve one question: “Why exactly are the bills so high?”

To find the answer, Brill dove into the industry’s financial workings. He looked at health systems’ public tax filings and pushed to review Medicare’s hidden charge data. He sat down with seven different patients and went line-by-line through hundreds of thousands of dollars in their medical bills. He relentlessly battered hospitals, trying to get their CEOs to explain why executive salaries were so high.

And in “Bitter Pill,” he took health care finance arcana and shoved it into the public arena.

Start with the word “chargemaster,” for instance. It’s one of the most important, if esoteric revenue cycle terms, revolving around how hospitals deliberately inflate their prices to negotiate with insurance companies.

  • The New York Times mentioned the word “chargemaster” just three times over the course of all of its 2012 articles — twice in a single blog post written by Princeton’s Reinhardt.
  • In his Time piece, Brill invoked the word “chargemaster” 53 separate times.

Brill ultimately concluded that hospitals’ price-setting practices had led to a spiral of profit-taking across the entire health care industry. And that the inflated prices that went into creating a chargemaster had negative consequences for consumers who didn’t have insurance and had to pay a great deal out-of-pocket for largely fictional fees.

This wasn’t a new realization. Reinhardt and colleagues bluntly made the same diagnosis in the title of a 2004 Health Affairs paper: “It’s The Prices, Stupid.”

And well before Brill’s article, a number of states already were taking steps to regulate hospitals’ price-setting practices.

California, for instance, made hospitals’ chargemaster data public and enacted the Fair Pricing Act in 2005, which limited the prices that hospitals could charge uninsured patients. (A study released this week found that the Fair Pricing Act successfully lowered the net price that uninsured Californians actually paid from 6% higher than Medicare prices in 2004 to 68% lower than Medicare prices in 2012.)

But Brill argued that leaders had been too complacent. “Those who work in the health care industry and those who argue over health care policy seem inured to the shock,” he wrote in his Time piece. Most Americans, Brill thought, would be radicalized if they knew the “truth” about health care finances. He also believed that readers would be outraged about executive compensation, one reason why he sprinkled salary information about 43 separate hospital executives throughout his story.

And Brill was seemingly right. “Bitter Pill” ended up sparking a national dialogue around price transparency, says Andrew Fitch, a revenue-cycle expert at NerdWallet. (The company provides tools and services to help explain and navigate health care’s billing system.)

“I always knew that people didn’t understand the health care system from a financial perspective,” Fitch told California Healthline. But when Brill’s piece appeared, “it was the first time that someone was taking the side of the consumer,” he noted, and it felt like “finally, the conversation is starting.”

The piece was well received in policy circles, even on both sides of the debate over the ACA. To ACA supporters, “Bitter Pill” proved that health reform had been necessary, to reduce the crippling burden of medical debt. ACA critics, meanwhile, argued that Brill’s story showed the law hadn’t gone far enough to change the underlying incentives.

And for some health care entrepreneurs and investors, the public’s reaction to “Bitter Pill” was among several key signals that “consumer-driven health care” was ready to bloom.

One group did take issue with Brill’s reporting: hospitals, which said they’d been unfairly vilified. And they may have a point: Chris Conover argues at Forbes that “Bitter Pill” inaccurately depicted hospital margins, buried the truth about charges and contains at least eight other myths.

The Rise of Different Incentives

Almost two years after Time published “The Bitter Pill,” it’s clear that something new has taken root.

There are numerous services and apps purporting to help businesses and patients shop for care, with more cropping up by the month. Price-transparency firm Castlight Health has a $1 billion market valuation. Data on health care charges are increasingly available and accessible. The “Choosing Wisely” campaign is trying to encourage doctors to do fewer procedures. Millions of Americans are moving from traditional defined-benefit plans to shopping for their own tailored coverage via public and private exchanges.

“The [mood] is palatably different than even a year and a half ago,” says Neel Shah, a physician who founded Costs of Care. (Shah’s not-for-profit organization helps educate physicians on how to make value-oriented decisions for their patients’ care.)

And for the first time, Shah says, doctors are beginning to feel consistent “bottom-up” pressure to explain the financial impact of their decisions.

“Thanks to the price-transparency movement, conversations with patients are being reframed” to focus more on value, he adds. “More and more patients are asking, is that [really] what I need?”

But there are still major hurdles in being able to provide the right answer, Shah notes. Many doctors don’t know how to weigh the costs of care in their decisions, and the immediacy of illness trumps everything.

“Even if you’re the most informed patient in the world on echocardiograms, you’ll still defer to your physician when you’re sick,” Shah ruefully notes.

And it’s not clear whether “Bitter Pill” actually catalyzed any industry changes, or just appeared at a moment when the price-transparency push was imminent.

“Road to Reform” spoke with about 15 experts for this article, and they agreed that Brill’s article could claim a lone, dubious achievement: It spurred Medicare to begin releasing sets of charge data.

On the surface, those CMS datasets were much-celebrated. (Partly because the announcements were well-choreographed.) But the actual impact of the Medicare releases has been limited.

“I looked at these data,” Reinhardt said. “They are not all that helpful.”

He added, “For Medicare, we had actual payments, but hospitals will claim that they are below costs. For the private sector, we had charges, and hospitals claim that virtually no one pays them.”

The After-Effects of ‘Bitter Pill’

One reason why “Bitter Pill” might have less of a long-term impact is because of Brill’s odd potpourri of proposed reforms. His prescriptions — capping non-doctor salaries at $750,000, for example — tended to be politically unworkable or technically infeasible.

And his heavy-handed focus on on executive compensation didn’t seem to land any lasting blows. The CEO of one California system that Brill criticized in “Bitter Pill,” for example, has seen his compensation rise from $5.2 million to $6.4 million.

Most importantly, the story’s primary goal — pushing for reform of hospital chargemasters — didn’t take either.

“Hospitals received a lot of bad press,” says NerdWallet’s Fitch, “but this attention didn’t translate into hospitals decreasing their charges.”

In fact, “the average consumer has not seen a lot of improvement” since Brill’s story appeared two years ago, he adds. “Americans still do not know the cost of their care, and [generally] aren’t empowered to ask what that price is.”

For example, a NerdWallet/Harris Poll found that 63% of American adults have been surprised by medical bills that were more expensive than they expected. And health care-related debt — the leading cause of bankruptcy — has actually steadily increased, a NerdWallet study found.

So if medical bills were “killing us” in 2013, they’re just as much a source of chronic pain and frustration today.

“‘Consumer-driven Health Care’ remains, for the most part, a cruel hoax, relative to what economists teach about competitive markets,” Reinhardt says.

“Patients are like blindfolded shoppers pushed into a shopping mall.”

Still, Raeburn thinks the story holds up as a corrective.

“Steven Brill’s piece makes me as angry now as it did when it came out,” he told California Healthline.

“Sadly, I don’t think Brill’s piece has changed [health care] very much,” he adds. “But it’s important to know what hospitals are getting away with before we can bring them to heel.”

Around the nation

Here’s a look at other stories making news on the road to reform.

Why Harvard’s professors disagree about the ACA. Adrianna McIntyre explains the missing context  behind a New York Times article about Harvard academics’ backlash to the school’s health plan, which were partially designed by other Harvard academics.

North Carolina, Utah governors lobby Obama on Medicaid expansion. The Republican leaders asked the president to encourage HHS to support alternate Medicaid expansion models in their states. 

Categories: Health Care Costs, Health Industry, Road to Reform