Publisher’s Letter

Bitter Pill

I read Steven Brill’s recent article in Time Magazine, “Bitter Pill: Why Medical Bills Are Killing Us,” with great interest. In the 24,000 word article, no stakeholder is safe from an indictment on contributing to the high costs of providing care. If you have read it, I’m sure you feel a little chaffed in some way … personally, it made me question many of my core beliefs about our nation’s healthcare industry.

Much of what he wrote is not necessarily new, but nonetheless thought-provoking. It’s always interesting to read how much money CEOs and Executives make, and imagine them in their corporate suites with ankle high shag carpet drinking from chalices and eating caviar. But it’s hard for me to fault them for being well compensated in exchange for managing an organization that employs tens of thousands of people and being fiscally responsible for billion-dollar budgets. In today’s economy, the skill set needed to accomplish this doesn’t come cheap.

We have all heard of the $7 Tylenol pill. Nothing new here, and I think we’d all agree that life would be much easier if we could buy our supplies and services on Amazon.com, but I don’t see that happening anytime soon.

However, I did find many of Brill’s points worthy of further discussion. His point that not-for-profit systems having to spend their “profits” to keep their not-for-profit status creates upward pressure on costs was fascinating. If systems spend their earnings on buildings and staff that need continued escalating revenue to operate, the cost for operations certainly is going up. Wouldn’t it be great if instead of spending on increased capacity that may or may not be needed, that money was spent on better products, services and wellness of the patient population? Maybe this explains why there is 33,000,000 square feet of healthcare provider space under construction today.

I also found his first premise incredibly straightforward. The foundation of the article is built on the premise that through reform we have addressed the second question of “who should pay the bill” not dig into the first question which “why is the bill so high?” I couldn’t agree more. As for why costs are so high, I have my own ideas that I will cover in the next letter, but in the meantime I’d love to hear your thoughts. Email me at jpritchard@mdsi.org.

If you have not read “Bitter Pill,” I suggest you do. I think we all will be hearing more about this article. In fact, I wouldn’t be surprised if our nation’s lawmakers use this article as impetus for Senate hearings. It is an interesting read that changes perspectives on many of our long-held beliefs.

Thanks for reading this issue of The Journal of Healthcare Contracting.

John Pritchard

John Pritchard About John Pritchard

John Pritchard is the publisher of The Journal of Healthcare Contracting as well as The Major Accounts Exchange (The Max).

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