87 pages • 2 hours read
A modern alternative to SparkNotes and CliffsNotes, SuperSummary offers high-quality Study Guides with detailed chapter summaries and analysis of major themes, characters, and more.
The chapter opens with a testimonial from Hope Marcus, whose quality of life hinged on her access to mesalamine. The drug is “decades old” and is “the active component of an even older aspirin-related medicine” commonly prescribed for bowel conditions due to its mild side effects (87). In order to experience its full effects, the drug must come with a special coating and should be taken orally and rectally. Once Marcus was accepted to Medicare, she was able to find a plan that would cover generic medications with no copay. Unfortunately, she could not take advantage of this plan, as the patent for mesalamine was purchased by a new pharmaceutical company that re-marketed the drug under new patents. Patients were soon dismayed to find that there had been no real change to the drug, and that the old manufacturer’s pills were simply re-coated with a different material. Marcus eventually resorted to purchasing generic mesalamine from India for $55 a month. While Marcus was scared, she was willing to go any lengths for this life saving medication.
The modern pharmaceutical industry’s roots lie in the practice of selling tonics in the 19th century. Most were questionable, and “relied on a little bit of science and a heavy dose of marketing” (91). As medical technology advanced, Congress moved to pass the Wiley Act in 1906, which empowered the US Bureau of Chemistry to regulate drug manufacturing and safety. Protections were bolstered under the Food, Drug, and Cosmetic Act in 1938. The updated law required that new drugs were explicitly labeled with directions for proper use. Most notably, it established a new oversight agency, the Food and Drug Administration (FDA), to aid in the vetting process for new medications.
In the late 1960s, some members of Congress believed that medicines should be considered a public good and proposed price caps and limitations on marketing, so that patients could trust that a manufacturer’s claims matched the drug’s outcome. The necessity of these changes were exemplified by the thalidomide tragedy of the 1960s. Thalidomide, an all-purpose drug created in western Germany, was linked to severe birth defects. This led to the FDA updating their guidelines for clinical testing, moving to evaluate drug applications on a quantitative basis, and gaining the authority to approve or reject new drugs within two months. Pharmaceutical firms had to submit proof that their medicines were both safe and effective. However, there were never any guidelines determining what “effective” actually meant, crucially leaving out any notions of cost-effectiveness. The urgency Congress felt after the thalidomide tragedy prevented them from meaningfully addressing many financial questions that currently define the healthcare industry, choosing instead to leave these issues up to the FDA. While this was effective for a time, the rapid growth of pharmaceutical lobbying firms calls certain current regulations into question.
Patents are a particularly pressing issue in modern medicine. Jonas Salk, the inventor of the polio vaccine, claimed his patent belonged to the people. Even if his feelings were different, it would have still been legally difficult to claim sole ownership, since his manufacturing process was not deemed novel enough to warrant new intellectual property claims. There were also multiple people on his research team, and it was publicly funded through contributions to the March of Dimes. Today, the discourse on medical intellectual property has changed completely.
Now, a singular drug can be covered under multiple patents if it performs more than one function. This was allowed via the Hatch-Waxman Act, a 1984 amendment to the Food, Drug, and Cosmetic Act. Hatch-Waxman was meant to clear an incredibly backlogged FDA approval system by clarifying the length of a medical patent protection. This was meant to incentivize manufacturers of generic drugs to keep accessible drugs on the market. However, this set a legal precedent for offering multiple avenues of protection for a singular drug’s formula. This also allowed companies to manipulate the distribution of new generics. Under Hatch-Waxman, FDA applicants no longer had to conduct recent clinical trials to ensure that updated formulas were safe and effective and could rely on results from the original brand drug. They only had to prove that there were no significant changes to the chemical compound, would be administered at the same dose, and produce the same amount of medicine within the body. Hatch-Waxman also gave brands a variety of avenues to easily extend their patents.
Though it was passed with good intentions, Hatch-Waxman created a perfect storm of conditions that combined “brand makers’ new ability to claim extended patent production” with “generic competitors’ constant challenges to weak patents” (96), leading to a new age of extensive intellectual property legal battles that slow down manufacturing and raise prices. This culminated in the passing of The Generic Drug Enforcement Act of 1992, which allowed the FDA to slow the approval process for a drug if an involved party had been under active federal criminal investigation within the past 5 years of the application’s file date. Weak enforcement methods also led to the United States becoming a global pharmaceutical capital, with this industry growing two times faster than the nation’s economy in the years since 1990 (96). These factors make it easy for corporations to artificially drive up the price of generic drugs. A recent and familiar case is that of hedge fund manager Martin Shkreli, who purchased the patents to a generic parasite treatment and raised prices from $13.50 to $740 a pill.
Most prescription drugs were fairly cheap and easily accessible until the onset of the HIV/AIDS crisis in the 1980s. In the early days of the epidemic, the novelty of the disease made effective treatments hard to come by. Viruses were not often heavily investigated for the purpose of developing treatments, as the most prevalent ones could be weathered at home with a few days of rest. After mass protests, the National Cancer Institute called for manufacturers to test out their existing compounds as potential treatments. One compound, AZT, was found to be successful at stopping the AIDS virus from replicating. Though the norm was to conduct at least three human trials, the severity of the situation caused the FDA to approve it after just one 19-week human trial.
At first, AZT was a lifesaver, and allowed many AIDS patients to begin returning to their normal lives. However, this changed when The New York Times critiqued AZT’s high price and minimal effectiveness. It was considered “the ‘most expensive prescription drug in history,’” and rightly so (98). Patients were shelling out $670 a month ($1,343 adjusted for inflation) for a drug that was found to not work effectively on its own after some time had passed. This established a precedent for ways drugs could be manufactured and priced in times of medical crisis. Most notably, the FDA relaxed its efficacy rules. Instead of proving that a drug offered a concrete cure for an illness, manufacturers could provide measurements of more specific factors, such as an effect on blood markers. If these factors were deemed correlated to a patient’s improved quality of life, the drug could be approved. While this made sense in the case of HIV, which attacked very specific parts of the immune system, it complicated treatment options for other conditions.
Instead of being used to address a medical emergency, this rule became a loophole for manufacturers to quickly launch their drugs onto the market. Drug companies were trained to provide the bare minimum proof of efficiency for the quickest possible releases. Though they often promised to conduct follow up studies, they knew they could get away without doing so as the FDA did not punish a lack of subsequent data. To make matters worse, the FDA could not revoke approval in the case that future studies proved a lack of efficacy.
The FDA also failed to crack down on the abuse of “help seeking ads” (100). This regulation stipulated that in marketing, manufacturers could choose to mention either a drug’s name or the disease it was meant to treat—not both. They were eventually allowed to mention both alongside a general description of symptoms that would run at the end of the advertisement. Drug advertising is now a multibillion-dollar industry. Notably, America is one of two countries that permit it, as the Supreme Court ruled it a protected form of free speech. There are concerns that ad expenditures outweigh what manufacturers are spending on actual testing and research.
Since most manufacturers choose to mention a drug’s name and not a specific disease, advertisements can be used to manipulate an audience into purchasing drugs that may not be appropriate for their given conditions. A key example of this is that of Hetlioz, a drug developed by Vanda Pharmaceuticals. Hetlioz was initially advertised to treat symptoms of Non-24, a rare sleep condition that affects those with total blindness as well as sighted individuals with light sensitivity. Those who have Non-24 often get out of sync with natural circadian rhythms due to the body being unable to perceive light. Hetlioz was composed of a molecule that could attach to melatonin receptors and was marketed as an alternative treatment. Previous studies demonstrated that Non-24 could be treated just as effectively with melatonin alone. Hetlioz was approved solely on the fact that it was able to produce a similar effect.
Subsequent research proved that Hetlioz was less effective than melatonin, despite its radically higher price tag. Nobody caught this during initial trials, because it was compared against a placebo pill. Since Non-24 is a rare condition, Vanda Pharmaceuticals began to expand its intended demographics. Hetlioz advertisements were released to an even wider audiences, targeting anyone who had ever experienced any kind of sleeping disorder. This is an example of manufacturers and researchers’ potential profits over potential cures.
The current state of patents exemplifies the extent to which the medical industry has been corrupted by an unruly market. It is in the manufacturers’ best interests to try and flood the market with brand name drugs, as generics are far cheaper. The first way they do this is by taking legal action when patents are about to expire. Drug manufacturers can receive secondary patents if any changes to the drug were “non-obvious” and “useful” (106). This often leads to brand manufacturers intentionally filing weak patents, which are then challenged by the generic manufacturer, which is then objected to by the brand. This automatically triggers a 30-month hold on the FDA’s consideration of the generic brand, as stipulated in Hatch-Waxman. This occurred in 2013, when Lantus, a popular brand of insulin, was set to lose its patent. Sanofi Aventis, the company that owned the patent, learned that Eli Lilly, another medical corporation, was set to launch a generic version of Lantus after its patent expired. Sanofi sued, and the ensuing legal battle halted the FDA’s review of Eli Lilly’s generic. This allowed Sanofi to extend its patent. Taking these issues to court leads to treatments being viewed “legally not medically,” which can put patients’ lives at risk (107).
Some manufactures also repackage a drug without making significant changes to the formula to potentially warrant a new patent. This was the case with the popular birth control Loestrin 24 Fe. In 2014, many patients were shocked to see that Loestrin 24 Fe was no longer being carried in pharmacies. This was the result of a legal battle that played out three years prior. Loestrin’s manufacturer, Warner Chilcott, sued other manufacturers who were capitalizing on the pill’s patent expiration and creating generic alternatives. During their 30 months of protections, they paid competitors handsomely to stop pursuing a generic alternative. This strategy is known as “pay-for-delay.” As the patent was about to expire, Warner Chilcott released Minastrin 24 Fe, which was the same formula in chewable form. Since there was no generic alternative to Loestrin, many patients were forced to make the switch. This practice is known as “product hopping.”
Some manufacturers also choose to make their drugs available over the counter. This is always a highly calculated business decision, as prescriptions are usually a company’s big money maker since manufacturers can receive insurance payments from them. However, when they pay off, they pay off well. This is the case with Flonase, a nasal spray meant to relieve certain symptoms of colds or allergies. Flonase was able to retain its status as a prescription-only medication since it is a steroid and can potentially have many side effects on patients. When GlaxoSmithKline noticed generic alternatives to Flonase slowly entering the market, it made an over the counter (OTC) switch that allowed it to “wipe out generic competition with one stroke” (112). Legally, a drug cannot exist in both over the counter and prescription forms. When Flonase made this change, generic manufacturers had to sell their remaining stock and shut down production. After this, Flonase took advantage of an FDA loophole that granted them three years of market exclusivity.
Manufacturers can also combine treatments. Duexis, a painkiller, is a combination of ibuprofen and famotidine (an anti-inflammatory and a stomach lining protector, respectively). Despite both its compounds existing in generic form, it is protected by five patents and costs over $1,600. Duexis’ competitors criticized the product, saying there was no real advantage to using it instead of the two generics. This assertion was the grounds for a suit against Horizon Pharma, Duexis’ manufacturer. Eventually, the case was settled via a pay-for-delay agreement.
Copay assistance was created in response to drastic rises in drug pricing. This is especially necessary in the case of chronic illnesses such as multiple sclerosis (MS), which require consistent treatments at all costs. There is no opportunity to “put down the hose if the water becomes more expensive,” as ceasing treatment can prove to be life threatening (115). In response to the rapidly increasing price of treatments, manufacturers formed copay assistance programs and set up corporate charities to help patients afford the care they need.
Doctors and government insurers are legally forbidden from waiving copays for their patients. Private insurers can write off copays in certain situations, making them incredibly appealing to people with chronic diseases. However, these plans are not always accessible to these people, who often end up on Medicare or other public plans as their health declines to the point of disability. Mary Chapman, a California woman dealing with MS, was stuck with copays amounting to thousands of dollars after transferring from her husband’s COBRA plan to Medicare. Unable to continue working at her full-time job, she reduced her hours, emptied her savings, and accepted the occasional odd job in order to attempt to afford her medication. She also filled out grant applications for “patient assistant funds,” which are other healthcare charities with unknown sponsors. Patient Access Network (PAN), one of these organizations, hopes to create “a society where every individual can access medical care” through their work “helping underinsured patients access medical treatment through copay insurance” (117). PAN does not list its donors but claims that many pharmaceutical companies are within their ranks. These organizations tend to be good options for patients who cannot accept assistance directly from a pharmaceutical company.
However, there are concerns that these charities could be exploited by pharmaceutical companies who are seeking to increase sales of their drugs amongst patients using government insurance. Though the Office of the Inspector General deems these practices legal, there is concern that drug manufacturers can simply channel funds from their assistance programs through these charities in order to prevent legal fallout. This ultimately leads to manufacturers making more profits and gives them the opportunity to write off donations to these corporations as tax deductible.
Pharmacy benefit managers (PBMs) also play a huge part in determining access to care. PBMs are tasked with negotiating the terms of drug purchases with pharmacies. Insurers are banned from comparing drug prices under antitrust laws, but they can task PBMs to do this on their behalf. PBMs make their profits by taking a cut of any discount they successfully negotiate. This means that certain drugs are available because a PBM negotiated a good deal as opposed to actually being the best option on the market.
The fallout from these practices is that Americans are increasingly losing out on financially accessible generic drugs. This is an issue for doctors and hospitals, as well. In the early 2000s, ER doctors noticed that Prochlorperazine and droperidol, two commonly used generic anti-nausea drugs, were suddenly inaccessible. They were forced to switch to Zofran, a far more expensive brand-name nausea medication intended for chemotherapy patients. This is the result of its manufacturer, GlaxoSmithKline, encouraging its use in a broader range of medical situations.
This change happened to coincide with the FDA issuing a warning against using droperidol, citing instances of heart arrhythmia. Doctors found this suspicious and ended up filing a Freedom of Information Act (FOIA) request. As it turns out, the heart arrhythmia episodes were only connected to situations where a patient had received a dose 50-100 times more than what was normally used. This raised concerns over the legality of what GlaxoSmithKline may have done in order to flood the market. The final nail in the coffin was when GlaxoSmithKline began marketing Zofran to pregnant women with morning sickness, despite not receiving approval to do so. The Justice Department retaliated, and the case was ended with a record-holding $3 billion settlement. Currently, GlaxoSmithKline does not hold the patent for Zofran, and generic options of the drug are now available and hospital mainstays. However, the older generic options have now been effectively discontinued due to few opportunities to re-enter the market. Even in its generic form, Zofran is still the more expensive option.
Patients lack the bargaining powers afforded to hospitals. While generic drugs still occupy over 80% of the American market, fierce competition decreased their cost effectiveness. Dr. John Siebel called in a prescription of generic medication for family members experiencing a common parasitic infection, only to find that the price of the drug had skyrocketed to $100 a pill. This price increase was the result of a cruel business strategy, in which a manufacturer worked “to corner a niche market for a pharmaceutical agent” only to “raise prices for captive patients to once-unthinkable levels” (123). This exemplifies a broader trend in the drug market, in which prices for generic drugs steadily climb as competition decreases. Generic manufacturers are able to adopt the strategy that brand manufacturers used for decades, which is charging “whatever the highly dysfunctional U.S. market would bear” (124).
Despite the high cost of healthcare, American consumers are often placated by the idea that they will have early access to the newest healthcare treatments. However, this is largely because the American market gives manufacturers leeway to set high prices. This often yields artificial barriers to treatment. Rosenthal recounts a recent meningitis-B outbreak that occurred at Princeton University while her daughter was a student there. As fear of the virus mounted, she realized a Swiss-manufactured vaccine, Bexsero, could possibly keep cases down. However, Bexsero’s manufacturer, Novartis, had no plans to license the vaccine in America since it was targeting a disease with a small market for treatment. There was a risk that American sales would be so small that Novartis would not recoup the money it would hypothetically spend on FDA trials and approval. Meningitis-B was simply not common enough to take that gamble. Conversely, it knew it would make massive profits in Britain, where every baby was required to be vaccinated against meningitis-B shortly after birth. It took over a year for the Center for Disease Control (CDC) to authorize emergency imports of Bexsero, but by then, the outbreak had already caused a fatality within the Princeton student body. Once the vaccine was successfully implemented, there were no other cases reported.
Certain healthcare sectors also tend to fight hard against the introduction of drugs that would render their services obsolete. For example, the colonoscopy industry has been fighting the acceptance of Cologuard, a non-invasive test that can detect colon cancer from stool samples. If these treatments are blocked or remain too expensive, patients may resort to sourcing drugs from other countries, much like Hope Marcus did with her mesalamine treatments. A diabetes patient who wished to remain anonymous says she regularly travels across the border from San Diego to Mexico to get her medication. Using this method, she spends just 40 cents per pill.
A device is considered medical if it serves some purpose in treating a patient or increasing their quality of life. These play an incredibly important role in treatment plans, but the lack of transparency in pricing puts lives in jeopardy. This is partially due to the relative anonymity afforded to device manufacturers. It is very unlikely that the average patient knows the specific brand of an artificial heart valve or what it ought to reasonably cost. This makes it difficult for patients to demand accountability from manufacturers and keeps them in the dark about what often amounts to the most expensive item on a medical bill. This has yielded a highly unregulated industry that costs patients thousands of dollars.
As was the case with drug manufacturers, devices are priced through a series of negotiations. Each part of a device is covered by a different middleman, who each have the opportunity to take a cut of profits or include a new markup. This is exemplified in the case of a hip implant. Rosenthal describes the average chain for these implants, which includes “joint implant manufacturers, joint brokers, joint distributors, joint device salespeople, and the purchasers at the hospital or surgery center” (129). Each link on this chain has the opportunity to make money off of these sales, and patients vastly overpay. Though the average manufacturing cost of a knee implant is around $350, patients Rosenthal interviewed reported paying $36,800 for one when receiving knee surgery. This is permitted due to device manufactures operating under a “tight-knit oligopoly” that allows them to control almost every facet of distribution (130).
The vague standards for what constitutes a medical device gives the industry a lot of flexibility in setting prices and managing distribution. When the first artificial heart valve was invented in 1960, it was essentially on par with a tongue depressor or finger splint. Scientists seeking to capitalize on its success began trying to quickly create alternatives, as they were not required to seek FDA approval. This led to a 1976 amendment to the Food, Drug, and Cosmetic Act, which created three distinct classes of medical devices. Each level required a different level of approval before hitting the markets. These levels take the form of three classes, each representing a different level of medical risk. The devices in the middle (Class 2), can enter the market via a 510(k) program. Obtaining access to a 510(k) requires the company to claim that their device was “substantially equivalent” to products already in the American market. If accepted, this device can be cleared for use in about 90 days. Substantial equivalence is extremely vague and is often exploited.
As medical technology continued to advance, assigning devices to classes became more difficult. Many manufacturers wanted their devices to be in class 2 because the fast approval process allowed products to enter the market earlier and therefore make more profit. Crucially, substantial equivalence does not require testaments to safety or efficacy. The medical device industry has also frequently lobbied to keep the distinctions between class 2 and class 3 nebulous.
This can have negative outcomes for patients, who are forced to take the risk of having an under-tested device implanted in their body. A key example of this is vaginal mesh, which was marketed to older women whose bladder or uterus had dropped. The ProteGen Sling was released in 1999, and despite yielding multiple injuries and lawsuits, subsequent versions of the mesh continued to sell. Thus, the 510(k) program can allow unsatisfactory products to enter the market. Manufacturers continued releasing similar versions of the mesh, blaming the older sling’s danger on minute design flaws or a particular surgeons’ procedural failures. This exposes a serious loophole in the system: a data set shows that 70% of recalls occurring from 2005-2009 were in relation to devices approved through the 510(k) program.
Joint implants are a big area of risk for patients, though they are not often advertised as such. Barbara Baxter, a business owner from San Diego, California, learned this the hard way. She had a procedure to replace her left hip in 2009 and received a Rejuvenate implant from the brand Stryker. When she needed her right hip replaced four years later, in what she was told would be a complicated procedure, she obliged. In the years since her second hip replacement, she has endured multiple fractures on her hip and subsequent surgeries to repair damage done by the implant meant to heal her. Her doctor eventually recommended she remove the implant, and through subsequent research she learned that Rejuvenate was recalled six months earlier. This left Baxter with a “potential ticking time bomb in her body” (138). Despite this, she had to pay for any and all procedures that were necessary to monitor her faulty implant. At one point, she required a critical MRI to ensure her joint wasn’t loose. It cost $1,150, but her insurance only covered a paltry $150. Many of her subsequent procedures have required her to pay mostly out of pocket, costing her tens of thousands of dollars per year.
Original joint implants were very successful and safe. There were few concerns about their effectiveness until active younger patients began seeking them out. Device makers saw an incredible opportunity to create a variety of new implants using the principle of substantial equivalence. Soon, device makers were advertising implants to hyper-specific demographics (there have been knee implants for women) so they could have a selling point and a justification for raising prices.
To ensure that these implants would find bodies, device makers began forming relationships with young orthopedists, “fight[ing] to get their bands into the major training programs” to get doctors accustomed to working with them (140). Brands will also send their representatives into the OR, and they will go so far as helping a surgeon install an implant in a patient. Since this is essentially free assistance, hospitals fought regulations that seek to keep these representatives in play. Currently, representatives are allowed on hospital premises if they are registered and granted permission. Doctors had a mixed response. Some lobbied their hospitals to ban device marketing and reduce implant choices. Others, however, became physician-owned distributors (PODs). This involves a doctor buying implants and reselling them to the hospital or surgery centers where they worked, thus allowing them to install them in patients at a significantly higher cost.
Doctors can also profit off of devices if they had a hand in creating them. During a required heart surgery, Antonitsa Vlahoulis received an artificial heart that her surgeon, Dr. McCarthy, invented. Vlahoulis’ heart began accumulating fluid after her first procedure, requiring her to eventually obtain emergency surgery to remove the valve. Upon reviewing the case and learning that Vlahoulis was one of eight people who received that particular valve, her primary care provider deemed the valve experimental. Despite this, her initial surgeon received royalties from the use of his own valve. This all happened in part because heart valves were bumped down to a class 2 device after intense lobbying from manufacturers.
Similarly, Vlahoulis’ valve was approved through substantial equivalence. Vlahoulis’ valve was eventually determined to be below FDA approval thresholds, and while Dr. McCarthy was admonished for not following protocol, he received no significant punishment. He went on to receive clearance for the valve a year later, and it is unclear as to whether the device was modified. The wholesale price was $4,000.
Testing is another sector of the health industry that thrives on a lack of concrete regulations. When seeking test results from a colonoscopy, Jerri Solomon noticed that her lab bill was $1,400. Her provider, UnitedHealthcare, explained that her hospital billed $772 for a Vitamin D test. As it turns out, the tests were as low as $16.70 when administered at different laboratories. An absence of industry regulations destroyed any semblance of consistency amongst her required tests.
“Ancillary services” (services required after a procedure, such as tests, devices, or physical therapy) offered new streams of income for doctors and hospitals looking to overcome decreased insurance rates. It also addressed American patients’ demand for quick treatments while ensuring doctors could provide these while remaining thorough. Patients are usually happy to accept them since most insurers will not require a copay for these items if their deductible has been met. This has led to the rapid emergence of a sector where doctors and hospitals can often get away with charging higher rates and expect little fallout.
In 2013, residents in the radiology department of a prominent Arizona hospital noticed an increase of MRIs they were expected to order. They were worried about burdening their patients with undue costs. This was a part of an MRI surge in Arizona that began in 2007. While the exact cause of this surge was undetermined, it cannot be ignored that imaging can be prescribed in the diagnostic processes for a wide variety of ailments and could be repeated multiple times without causing a patient harm. Eventually, Dr. Spencer Hansen, one of the radiologists, contacted the hospital’s billing department in order to learn what doctors were projected to make from these procedures. He learned that one MRI cost $3,470, despite the fact that Medicare would usually pay under $1,000 of that sum. It turned out his hospital was experiencing financial difficulties, and that part of its long-term recovery plan was to increase imaging. This is another sector in which hospitals choose to prioritize profit over patient care.
Many emergency rooms have adopted the habit of requiring tests before allowing a patient to see a doctor. While this can prevent a doctor from becoming over-extended, it can end up forcing patients to shell out extra money to diagnose problems of which they are already fully aware. Some patients are initially evaluated via software like ProMed, that derive potential diagnoses based on their initial complaint and suggest different tests. Preoperative testing can prove incredibly beneficial for hospital budgets since they are done in outpatient settings and can therefore be billed separately.
Biopsy testing is another commonly exploited ancillary service. This procedure involves taking a tissue sample and studying it for signs of disease. Due to a lack of regulation, different pathology institutes often get away with inconsistent pricing. Sometimes, doctors are unaware of this. Dr. Jeffrey Crespin, a gastroenterologist, noticed his patients were receiving unusually high biopsy bills and learned that the pathology center was charging between $500 and over $1,000 for their services. The previous labs he worked with charged between $40 and $100, since insurers would rarely reimburse more than $80. He asserted that this center was “ripping off [his] patients” and taking advantage of the fact that he did not previously know what they were being billed (155).
This anecdote reflects a new medical business model that emerged due to an amendment made to The Stark Law. This law from the 1990s banned doctors from personally profiting over ancillary testing. However, it was amended in 2002 to allow exceptions for treatments that could be given in office, such as x-rays. Some doctors began hiring specialists that could process materials onsite. A shocking report from the Government Accountability Office (GAO) revealed that “among Medicare patients in 2010 there had been 918,000 extra pathology specimens taken by physicians who stood to profit, amounting to $69 million in excess charges to Medicare” (156). This went a step further when pathologists began forming LLCs with the hope of being acquired by larger pathology companies. This led to biopsy samples potentially being prepped and read in separate locations. Some hospitals sought out samples, offering a low fee to participating practices and claiming these readings would be used for training purposes. Patients could still be billed as if the procedure was being performed in-house.
Ambulance rides to hospitals are also considered ancillary services. For many hospitals, they now represent an easy way to access patients. Ambulance companies are either privately owned or run by cities and hospitals. All have the same access to a municipal dispatcher and the ability to decide where to take patients. Ambulance companies first began collecting fees around 2000. Their reasons seemed valid at first: the technology first responders were expected to work with were growing increasingly complex and expensive. This led to some crews having difficulties operating consistently due to lack of financing, thus putting patients in danger. Once companies began participating in third party billing services, they slowly became a million-dollar industry. Highly professional billing specialists worked to allow ambulances to “produce more ambitious ‘revenue capture’” which proved to be “not so forgiving” (159). Ambulance companies began itemizing their bills, requesting extra fees for the use of specific technologies, miles traveled, equipment, and waiting periods. Due to gaps in insurance coverage, certain patients might be stuck covering most, if not all, of these high prices. City-run ambulance companies have followed suit, as collecting these fees contributes generously to municipal budgets.
Sadly, elderly people are often targeted for ancillary services they do not need. A recent study from the University of Texas showed that seniors on Medicare often receive more colonoscopies than recommended. This invasive procedure is incredibly difficult for the elderly to recover from and can prove deadly if conducted too frequently. However, anxious caretakers may comply with recommendations that their family members undergo this procedure, since Medicare covers them. Most Medicare Advantage plans are paid off via a fixed monthly fee. However, this fee can fluctuate based on a patient’s determined “burden of illness,” for which is a calculation of the number of conditions an individual may require treatment. Certain conditions will increase an associated “risk score,” which drives the fee even higher. Certain companies seek to artificially alter a risk score by getting unwitting senior citizens to subject themselves to additional evaluations in the hopes that additional conditions are uncovered.
Chapters 4-6 expand on many of the themes previously covered in Part 1 of An American Sickness. Patient testimony is used as a means to highlight the widespread nature of certain defects in the healthcare industry and is coupled with Rosenthal’s insider knowledge to present a compelling picture of the American medical system’s faults.
Chapter 4 opens with patient testimony from Hope Marcus, an older woman seeking mesalamine for what should be an easily treatable stomach condition. Marcus eventually chose to source her treatments from India but had several qualms about doing so (89). She was forced to go to these lengths due to a misleading Medicare plan and described herself as being “nervous” since her only knowledge about Indian drugs was that they were more financially accessible (89). Like Jeffrey Kivi in Chapter 1, Marcus is meant to give the readers a figure to connect to. However, they relate to her for different reasons. While readers are meant to praise Kivi for his principled stance against NYU Langone, it is more likely that they will view Marcus’s quiet desperation with empathy. Every patient requires some sort of drug over the course of their medical care. By highlighting that Marcus was forced to look overseas after an American insurance program failed her, Rosenthal presents her testimony as a cautionary tale. Readers are meant to recognize they are closer to being in her shoes than they may think.
Chapter 5, which discusses medical devices, is a place where the reader particularly benefits from Rosenthal’s expertise. The medical industry seems to shed regulations as soon as it is subjected to them, so the reader gains crucial insight from Rosenthal’s firsthand knowledge. However, Rosenthal’s expert analysis sits at a stark juxtaposition to what the average patient knows going into a procedure. For example, the case of the ProtoGen Sling, the widely popular vaginal mesh that caused uterine prolapse in many women, is explained by Rosenthal’s interpretation of a data set that states that 70% of recalls from 2005-2009 were for products approved by the 501(k) loophole that allows devices to be released in a less scrutinized class. In presenting this information, which is already meant to be intentionally confusing, Rosenthal highlights the fact that many patients participate in the medical industry at a serious disadvantage. As various medical sectors grow more focused on maximizing profit, they seem to operate in ways that can only be deciphered with assistance from a medical doctor. By presenting this information from her field, Rosenthal teaches the reader new strategies to navigate future care plans, exhibits the stark divide between doctors and patients, and encourages her readers to be more thorough when investigating their medical care, developing the theme “Power of the Individual.”
Chapter 6 highlights the burden that patients must shoulder in order to navigate the healthcare industry. Many ancillary services, such as private rooms, are amenities that are popular amongst patients (whether there is a valid need for them or not). However, a lack of regulations and limited communication from some doctors about the cost of a service or treatment can directly contribute to a patient’s financial ruin. Limited regulations on testing prices, as described in Jerri Solomon’s colonoscopy test results, led to her footing an unduly large bill. This state of under regulation also negatively impacts patients by making it difficult to research any procedures ahead of time to determine the cost and whether it is feasible. Similarly, had Solomon’s doctor committed to having an open dialogue about what tests were explicitly necessary and what were not, she may have been able to make an informed choice about her care plan, thus saving money. This is indicative of a broader problem. It implies that the current state of these sectors makes it exceedingly difficult for patients to provide informed consent about their medical care.
Plus, gain access to 8,800+ more expert-written Study Guides.
Including features:
Books on Justice & Injustice
View Collection
Books on U.S. History
View Collection
Business & Economics
View Collection
Health & Medicine
View Collection
New York Times Best Sellers
View Collection
Politics & Government
View Collection
Science & Nature
View Collection
The Best of "Best Book" Lists
View Collection