An American Sickness: How Healthcare Became Big Business and How You Can Take It Back

Notes from Part I: History of the Present Illness and Review of Systems

Not-so-not-for-profit Hospitals

• Providence Health & Services is now the third-largest nonprofit hospital system in the United States […] In 2013 it had revenues of $2.6 billion and about $2 billion in assets. Its CEO is paid about $3.5 million a year. Yet it still describes itself as “a not-for-profit Catholic health care ministry” […] In fact, Providence’s “tradition” comprises a weird mix of Mother Teresa and Goldman Sachs: one day it is donating $250,000 to help build a new teaching hospital in Haiti to replace one destroyed by the 2010 earthquake, and the next its new offshoot, Providence Ventures, is announcing the launch of a $150 million venture capital fund, led by a former Amazon executive.
• Not-for-profit hospitals are now just as profitable as capitalist corporations, but the excess money flowing in isn’t called “profit” — it’s “operating surplus.”
• Hospitals tend to have more high-priced legal counsel than cash-strapped cities. In addition to avoiding property taxes as well as federal, state, and local payroll taxes, hospitals can issue tax-exempt bonds for building projects. They can collect tax-deductible donations (a boon when a big donor wants to underwrite a new wing or hand over a valuable piece of art to adorn a lobby).
• Reflecting a new era of “hospital conglomerates,” there were ninety-five hospital mergers in 2014, the highest yearly number in over a decade. An analysis of 306 geographic health markets in the US showed that none was “highly competitive” and more than half were “highly concentrated,” often with one system dominating healthcare.
• A 2012 study in California determined that hospital mergers were associated with more cardiac procedures and an increase in inpatient deaths, suggesting that the patients had been subjected to “suboptimal care” and “overtreatment”; hospitals without competition could more easily get away with rendering only profitable services, the authors suggested.
• Our healthcare system today treats illness and wellness as just another object of commerce.

Doctors in America & Medical Societies as Super PACs

• While primary care doctors in the United States make about 40 percent more than their peers in Germany, American orthopedic surgeons make more than twice as much as similar German specialists.
• There is a bizarre martyr complex that permeates medicine — people think they are working harder and longer for less money than everyone else in America.
• New issues I learned about for the first time: physician extenders, facility fees, the resource-based relative value scale (RBRVS) and the senate-like structure of the AMA’s Relative Value Scale Update Committee (RUC)
• Collectively, the medical industry has become the country’s biggest lobbying force, spending nearly half a billion dollars each year.
• It seemed like a shoo-in when Illinois state representative Daniel Burke proposed a bill in 2012 requiring physicians to inform patients whether they were in a patient’s insurance network before rendering treatment to avoid surprise out-of-network charges. It didn’t pass. A parade of doctors, called into action by the Illinois State Medical Society, blocked the legislation.

Big Pharma

• In the past twenty-five years, the long-standing notion of “one drug, one patent” (focusing on the chemical composition) has evaporated. The average number of patents per drug rose from 2.5 around 1990 to 3.5 in 2005, a number that has only increased since. Many bestselling medicines are today covered by more than five patents, and some by more than a dozen. They project not just the molecule but also the processes that create each particular formulation and the delivery systems as well.
• With the race to treat HIV, a virus that had infected more than a quarter million Americans by 1991, the FDA relaxed its rules for what constituted proof that a drug was effective, allowing for greater use of what are called “surrogate measures”: Drugmakers no longer had to show that their product actually cured the symptoms of illness over months or years or extended life. Instead they could measure things like blood markers that were felt to correlate with such benefits. That made good sense for HIV, because the virus attacked CD4 immune cells, so measuring their levels was a great proxy for the patient’s condition and the drug’s success. But it made little sense for trials of drugs to treat many other conditions for which surrogate endpoints are now the norm, such as type 2 diabetes, providing a fast track to approval.
• An in-depth data investigation by the Milwaukee Journal Sentinel and MedPageToday in 2014 revealed that, thanks to surrogate endpoints, 74 percent of cancer drugs approved by the FDA during the previous decade ultimately did not extend life by even a single day.
• Direct-to-consumer drug advertising rose from $166 million in 1993 to $4.2 billion on 2005, and by 2006 it made up nearly 40 percent of total pharmaceutical promotional spending. […] The Supreme Court has protected drug advertising under the guise of free speech. We are one of two countries that allow it, along with New Zealand.
• Pharmaceutical companies like to say it takes well over $1 billion to bring a new drug to market: the costs of the basic science, developing a new compound, figuring out the right dose, and the FDA process of human testing for safety and efficacy. […] In some cases, that is likely true. But academic studies have placed the actual average scientific research and development costs for a new drug at between $43.4 million and $125 million. It is unclear how much of PhRMA’s typical $1 billion estimate is for testing markets, advertising, and promotion.
• The agency’s criteria for efficacy stipulate only that a new drug has to be shown effective when compared with a placebo (rather than when compared with a comparable drug/treatment already on the market)
• “Product hopping” right before patents expire to stymie the launch of a generic (i.e. turning a pill into a chewable and hiking up the price)
• Many European countries bargain with the pharmaceutical companies for a national price, but Medicare is legally not allowed to do so.

(De)vices and Ancillary Services

• Device manufacturers are a tight-knit oligopoly with nearly absolute control of distribution. There are dozens of large drug makers and hundreds of small ones. But only a handful of huge device manufacturers dominate the global market. For some devices, customers have only one option. Stryker, Zimmer Biomet, DePuy Synthes, and Smith & Nephew make virtually all knee and hip implants available in the United States. Experts jokingly call them “the cartel.”
• Today there is generally far less careful scrutiny of new devices than of new drugs, even though most drugs can be stopped in an instant if problems emerge and many devices are permanently implanted in the body. Many devices are not even tested in animals before they are placed into humans: in fact, there are often no clinical trials at all for devices. When claiming “substantial equivalence,” manufacturers don’t have to prove that their class 1 and class 2 produces are “safe and effective.”
• Although the FDA Modernization Act of 1997 sought to clarify which products fell into class 3, the industry lobbied successfully to minimize its effect.
• The 510(k) program led to a number of medical disasters (aka injuries and deaths)
• Over the course of the past decade, testing, medical equipment, and ancillary services became to hospitals and clinics what booze is to restaurants: high-profit margin items that can be billed for nearly any amount.
• Extensive preoperative testing is a particular boon for hospital budgets because those tests are often done on an outpatient basis, prior to admission, so they can be billed separately even if an insurer pays an all-inclusive rate for the hospital stay.
• By 2011, ambulance transport was no longer primarily a charitable service but such a good business that America’s two largest private sector providers, Rural/Metro and American Medical Response, were both bought by private equity firms that year.
• LA base rate for a basic ambulance ride in 2014: $1,033.50 ($1,445 if an advanced life support team is on board), plus $19 per mile and $51.50 for every 15 min of waiting; extra: $84/75 if it’s after 7pm, $65.75 for the use of an oxygen tank, and $27.25 for each ice pack and bandage, and the oxygen mask.
• In 2012 the Fire Department of the City of New York raised its base charges for a ride from $515 to $740, even though Medicare determined it was worth only $243.57 […] Ambulance rides generate more than $200 million for the city each year […] Some ambulance companies now bill separately for the ambulance (the facility fee) and for the paramedics on board (the professional fee) — although many insurers as well as Medicare do not recognize the billing practice as legitimate.
• As ancillary services became increasingly commercialized — profit centers that hospitals and doctors looked to for new revenue — physical therapy practices fought for insurance coverage, charging minute by minute and item by item.

The ABCs of New Medical Businesses: Abuse, Billing, and Coding

• She […]was so impaired that the hospital had granted her father power of attorney for life-and-death decisions. Nonetheless, the forms she had signed upon arrival in the emergency room were deemed proof of her consent to pay.
• Studies have showed that hospitals charge patients who are uninsured or self-pay 2.5 times more than they charge those covered by health insurance (who are billed negotiated rates) and three times more than the amount allowed by Medicare. That gap has grown considerably since the 1980s.
• Medical coding and coders like ours essentially don’t exist in any other healthcare system.
• The historical purpose of coding was strictly epidemiologic — to classify and track causes of death and prevent the spread of infections among populations that spoke different languages.
• Medical coding systems originated at the time of the bubonic plague. In the 1890s the French physician and statistician Jacques Bertillon further systematized death reporting by introducing the Bertillon Classification of Causes of Death
• In 1948 the WHO took over stewardship and gave Bertillon’s system a new name to reflect a broader focus: the International Statistical Classification of Diseases, Injuries and Causes of Death (ICD). The codes became an invaluable tool, a common language for epidemiologists and statisticians to use when tracking the world’s afflictions. But in the United States, the codes gradually took on a bedrock financial function as the basis for medical billing. In 1979 the U.S. government decided to use ICD codes in adjudicating Medicare and Medicaid claims, with some modifications added specifically for that business purpose, so the U.S. version is called ICD-CM.
• The coders who work for hospitals strive to get money. The coders employed by insurers try to deny claims as overreaching. Coders who audit Medicare charts look for abuses that need to be punished.
• An investigation by the HHS OIG in 2005 found massive evidence of modifier 59 abuse ($59 million in overpayment); “most of these services were not distinct because they were performed at the same session, same anatomical site, and/or through the same incision as the primary service.” It promised a “Medicare Learning Network (MLN) Matters” alert to clarify how to appropriately bill modifier 59.
• Instead of resolving the problem, such attempts at clarification simply created a secondary business of even more advanced coding consultants
• With the ‘guidance’ of coding consultants, some surgeons stopped suturing wounds shut after their operations and instead handed off to another doctor, say, a plastic surgeon, who could therefore code and charge separately.
• The latest iteration of international disease codes, ICD-10, was completed in 1992 and has been used by the rest of the world for decades. Why did it take the US until 2015 to fully deploy it? The problem was that the US’ medical billing system, and how to game it, evolved based on ICD-9. Changing to the new system, which identifies medical conditions more specifically using new numerical codes, was good for international epidemiology — but terrible for the business of American medicine.

Health requires wealth?

• By 2014, 52 percent of overdue debt on credit card reports was due to medical bills and one in five Americans had medical debt on their credit record.
• We — and our employers and insurers — are shopping for healthcare in a market where everything is monetized to the maximum, without much regard for the implications for patient health.

The ACA

• One of the laudable requirements of the ACA is that certain preventive tests, including colonoscopy screening, should be free to patients to encourage people to take advantage of early detection.

(But clinics and insurers can categorize procedures as “diagnostic” rather than as screening procedure, which can make them cost thousands of dollars in OOP costs.)

• The ACA barred insurers from denying insurance or treatment to people with preexisting conditions.
• The ACA banned lifetime limits on insurance payouts, which had been potentially deadly for patients with chronic illness.
• The ACA defined a list of Essential Health Benefits that every insurance policy had to cover.
• The ACA did little directly, however, to control runaway spending. Obama had initially included several ideas in the bill that would have done so — like national negotiation for pharmaceutical prices. To get a healthcare bill passed and to win support from powerful groups like PhRMA, the AMA, the American Hospital Association, and America’s Health Insurance Plans, the administration had to cave on anything that would directly limit the industry’s ability to profit.
• The ACA promoted some programs that might render the practice the medicine more cost-effective like encouraging ACOs and patient-centered medical homes, but much of the industry deftly danced around the ACA’s well-intentioned edicts to minimize their financial impact on its business and maximize profit. “In healthcare, entrepreneurship outsmarts regulation very time.”
• Medicare Part D ‘donut hole’/ ‘boomerang effect’
• The public option proposal was excluded because of (potential) objections from the insurance industry
• While many parents welcome the fact that their young adult children can stay on the family health insurance until age twenty-six under the ACA, the benefit often proves useless because the narrow, hyperlocal networks include no doctors out of state.
• Under the ACA, the percentage of uninsured Americans dropped from 18 percent in 2013 to 11.9 percent in 2016.

Notes from Part II: Diagnosis and Treatment: Prescriptions for Taking Back our Healthcare

National fee schedules

Many countries — Germany, Japan, Belgium, and more — set national fee schedules for some combination of medical encounters or supplies and medicines […] National fee schedules inevitably yield prices that are far lower than those in the US because a nation has far greater negotiating clout than a single insurer or an individual. But also because such a system doesn’t waste time haggling over proper charges and bills. It is efficient. In the US, doctors now spend one-sixth of their time on administration and medical practices to hire extra staff to wrangle with insurers. […] A national fee schedule doesn’t preclude a private insurance market or a competitive industry. […] Within a regulated framework, these countries rely on market forces acting between hospitals and doctors and insurers to deliver cost-effective care.

Single payer

This is when a single authority, usually the government, dispenses most of the money paid to healthcare providers. Used in Canada, Australia, and Taiwan, as well as other countries, this system cuts private insurers out of most basic medical financial transactions.

In a few countries, like Denmark and Great Britain, a single payer system is combined with state ownership of hospitals and major healthcare infrastructure, creating true nationalized or socialized healthcare, a government-run medical system.

With its powerful, profitable private system, it is hard to imagine the US moving to nationalized healthcare any time soon. But America’s existing Medicare program is a pretty good single payer healthcare system, which could provide a gradual path to a more extensive one (e.g. progressively opened to younger patients).

Market-based tools of transparency and competition

Prime example: Singapore. Singaporeans (and their employers) are required to contribute a portion of their salaries to a health savings account, which is dedicated to paying healthcare bills for their families. Most hospitals are public (state owned) and accommodations are tiered at four levels. Patients who choose the top level have private rooms with air-conditioning and can choose their doctors, but must pay the entire fee. Those choosing the lowest tiers reside in open wards and are assigned physicians, but the government pays 80 percent of the bill. There are also private hospitals […] but they compete with the top-level wards at the public hospitals, which effectively limits what they can charge. The ministry ensures competition by publishing prices and bills from different hospitals and tiers of care on its Web site, allowing patients to make informed choices.

According to the World Bank in 2014 Singapore spent only 4.9 percent of its GDP on healthcare compared with the US’ 17.1 percent. Meanwhile, Singapore ranks sixth in the WHO’s assessment of health system performance while the US ranks thirty-seventh.

Doctor’s Bills (20–30% of our $3 trillion bill)

• Shared Decision Making requires us to be “difficult” patients (Ask why your doctor is ordering a particular test. Challenge those large numbers on your bill).

Choosing a Primary Care Doctor

• Ask, “is the practice owned by a hospital or licensed as a surgery center?” (if answer is Yes, I might have to pay outrageous facility fees; ask if such a fee will be added and how much it will be)
• Ask, “will you refer me only to other physicians in my insurance network, or explain why in advance if you can’t?” (primary care doctors and specialists’ relationships reflect trust but also a business arrangement)
• Ask, “if I need blood work or radiology testing, can you send me to an in-network lab?” (prices at hospital labs can be 100x higher than at commercial labs like LabCorp and Quest)
• Ask, “will there be charges for phone advice or filling out forms? Is there an annual practice fee?”
• Ask, “if I’m hospitalized, will you be seeing me in the hospital? What is your coverage on weekends?” (You don’t want a doctor whose off-hour backup advice is to go to your local urgent care center or a hospital ER with which they have no contact)

At a Doctor’s Appointment

• Ask, “how much will this test/surgery/exam cost?” (Idk or ‘it depends on your insurance’ is not an answer; Dr should give a ballpark range)
• Ask, “how will this test/surgery/exam change my treatment?” (if a doctor begins a suggestion with ‘Why don’t we just…’ there’s often no compelling reason for the test at all
• Ask, “are there cheaper alternatives that are equally good, or nearly so?” (if you go to a pharmacy or a lab and encounter a high price, call your doctor’s office and tell them about it)
• Ask, “where will this test/surgery/exam be performed — at the hospital, at a surgery center, or in the office — and how does the place impact the price?”
• Ask, “who else will be involved in my treatment? Will I be getting a separate bill from another provider? Can you recommend someone in my insurance network?”

Good doctors will not be threatened by questioning, skeptical patients.

Systemic Changes

• Cost and cost-effectiveness should be integrated into medical school curricula, and national medical boards should test this knowledge.
• Hospitals should provide medical staff with their master price list (e.g. because doctors don’t know that receiving supplemental oxygen through the nose is billed by the minute — or that it is billed at all — they might habitually order oxygen therapy on every patient who comes out of surgery for the next 24 hours, whether or not it’s needed).
• Make it every doctor’s professional obligation to obtain informed financial consent as well as medical consent from patients (e.g. Australia)
• Malpractice reform: 1) place limits on noneconomic damages; 2) encourage arbitration; 3) offer warranties and guarantees (e.g. guarantee that if there are complications after your operation the center will take care of the problem at no charge; there would be fewer malpractice lawsuits if providers were up front about acknowledging problems and took on responsibility to correct them)
• Set up a government program that forgives loan repayment for young doctors who go into lower-paying fields or set up practice in underserved areas (keeps forgiving repayments as long as they stay there)
• Physicians should be prohibited from owning medical care facilities of any nature that they could potentially refer patients to. Examples include surgicenters, laboratories, imaging equipment, etc. This is clearly a conflict of interest and should be illegal.

Hospital Bills (40–50% of our $3 trillion bill)

• The nonprofit Leapfrog Group grades all general hospitals on patient safety on a scale of A to F, and also offers info on the quality of different procedures offered at a hospital.
• Medicare also has an online Hospital Compare program, which provides data on all 3,600 hospitals that take Medicare payments. Also check out Medicare’s Provider Utilization and Payment Data for inpatient stays.

In the Hospital

• If assigned to a private room, make it clear that you did not request it and would be happy to occupy a room with another patient (otherwise, you might be hit up to pay the “private room supplement” by your insurer)
• When signing documents, there will be one concerning your willingness to accept financial responsibility for charges not covered by your insurer. Before you sign, write in “as long as the providers are in my insurance network.” (limit consent to in-network care only)
• Be clear on the terms of your stay in the hospital: Are you being admitted or held under “observation status”? (Hospitals can keep you for up to three days (two midnights) on observation status. Though you will be in a hospital bed, you will be considered an outpatient and be responsible for outpatient co-payments and deductibles, which are generally far higher than those for an inpatient stay.)
• (If you’re feeling well enough), ask to know the identity of every unfamiliar person who appears at your bedside, what they are doing, and who sent them. (Beware the nice doctor who stands at the foot of your bed each day and asks if everything’s going OK. That pleasantry may constitute a $700 consultation. Remember that you can say no, just as you can refuse a hotel porter’s offer to take your bag.)
• If the hospital tries to send you home with equipment you don’t need, refuse it, even if it’s “covered by your insurance.”
• If you receive an outrageous bill from a hospital, testing center, or a medical office, don’t wait — negotiate. (Prices are so inflated that even low-level clerks are often authorized to approve major discounts. If you haven’t met your deductible and are paying out of pocket, make an offer.)
• When a hospital bill arrives in the mail, request complete itemization. (The hospital may resist answering your inquiries and tell you that privacy regulations governing healthcare like HIPAA prevent such revelations. That’s wrong. An itemized bill is your right.)
• Check the bill against the notes you made while you were in the hospital. (Make sure you received the services for which you are being charged. In an age of automated billing, errors are highly likely. One study found that over 90 percent of hospital bills contained mistakes, and others have detected errors in 50 percent of bills or more.)
• Protest bills in writing to create a record (rather than calling).
• Argue against surprise out-of-network bills.

Systemic Changes

• Hospitals should publish their chargemasters (master price lists) in a standard, easy-to-understand format. Since 2004, CA law has required most hospitals to post their chargemasters on a regulatory website. The California chargemasters provide so much disorganized information that essentially none of it is useful for the consumer-patient. The other 49 states do not require hospitals to disclose their chargemasters at all.
• Hospitals in your network should be required to guarantee that all doctors who treat you are in your insurance network. State regulators should insist that this be written into insurance contracts.
• States and municipalities should more aggressively challenge hospitals’ tax-exempt status. Judge Vito Bianco of the Tax Court of New Jersey wrote, “modern nonprofit hospitals are essentially legal fictions.” The looming threat of losing tax-exempt status would motivate hospitals to limit their more egregious business practices and to think more about providing affordable community-minded care.
• Antitrust regulators and attorneys general who prosecute wrongdoing on behalf of the people should also be more aggressive in blocking the kind of extreme consolidation in healthcare that is leading to today’s high prices. (The Sherman Antitrust Act of 1890 and the Clayton Antitrust Act of 1914) While the Federal Trade Commission and the Department of Justice have jurisdiction over healthcare-related mergers, they tend to divide oversight, with the former overseeing hospitals and doctors’ groups and the latter taking care of insurers. They judge whether the gains in efficiency achieved by a merger outweigh the loss of competition. If a merger is regarded as problematic, the agencies can sue to block it, or challenge it with an injunction.
• To protect consumers, its original mission, the FTC will need to be more proactive in reviewing and halting creeping consolidation, rather than waiting for mandatory reviews to be triggered by large mergers. Under the 1976 Hart-Scott-Rodino Antitrust Improvements Act, mergers valued under $76 million do not need to be reported to the commission for review. But many healthcare systems consolidate by a gradual series of lesser acquisitions: a few surgery centers here, a cancer treatment center there, a bunch of doctors’ practices a year later. In this way, a near monopoly can accumulate under the radar. The FTC and state AGs may even need to break up some larger health systems to ensure that healthcare markets function.
• There should be an industrywide or legal standard about when medical accounts should be considered seriously delinquent, with a minimum of six months, given how long it takes for insurers to process their own portion of the payment. There should also be a promise that no bill will be sent to collection while the patient is disputing its legitimacy.

Insurance Costs (not even calculated into our $3 trillion bill)

When choosing your insurance, consider the entire package.
(1) The premium: the amount you pay each month to be insured.
Employer-sponsored health insurance → find out what percentage of your premium you are paying, and just how much is being paid in total for your healthcare.

(2) The deductibles: the amount you must pay out of your pocket before insurance kicks in.

Is the deductible calculated per person or for your whole family? // Are there separate deductibles for in-network or out-of-network care?

(3) The co-payments and coinsurance: the patient’s contribution for each medical purchase or encounter.

If you visit doctors often, avoid a plan that requires a percentage co-payment for office appointments. // If you need to have your blood checked frequently, look for one that requires no patient cost sharing for in-network lab tests. // Check to make sure the drugs you take on a regular basis are included in the insurer’s formulary and to what extent their cost is covered.

(4) The out-of-pocket maximum: the limit on how much you will be expected to pay in a given year, if you’ve played by the plan’s rules.

You must have a very clear understanding of how your insurer defines the legal maximums/limits and what will count toward them. You must be vigilant about securing preapproval and sending in claims forms, even before you’ve reached your deductible, so that you get proper credit toward the magical number (in 2016 the legal maximums were $6,850 for an individual and $13,700 for a family) when insurance is obliged to take over the cost.

(5) The network: the collection of contracted doctors and hospitals you must use in order to have the plan cover your care or, at least, to reap the plan’s full financial benefits and promises.

Remember that all plans from the same insurance brand are not created equal (e.g. a dermatologist considered in network for one Aetna plan may be OON for another). // It is often simplest to work backward as a strategy to choose the best option. If you want to stick with your current doctor, start by calling the office and asking for a list of plans in which they participate. // Check to see that the plan offers a reasonable local selection of the types of doctors people are likely to need (orthopedists and gynecologists, for example). // On lists of providers, be wary of dozens of doctors at a single address. These are often clinics in or affiliated with a hospital; they may even be run by doctors in training, or residents. // Carefully review the hospital offerings in the network. Pay particular attention to specialty hospital offerings. Does the network include a nearby hospital with a good neonatal ICU or a designated national cancer treatment center?

(6) HMO options

The VA has centralized record keeping so patients’ doctors know what all their other doctors have done. Because all treatment comes from one fixed budget and there is no payment per procedure, there is no incentive to order tests on people who will not benefit from them. There are no facility fees, which means there is no motivation to do procedures in an operating room that could be performed in an office. There is little spent on marketing.

Here’s what to look for if you’re thinking about joining an HMO (like Kaiser):

• Genuine systemwide integration of services (avoid brands that feature individual physicians operating independently)
• Salaried physicians; no productivity bonuses
• A physician-managed system — or at least one that bestows significant decision-making power on physicians
• A meaningful use of technology: connecting patients and caregivers after hours; free access to all medical records within the HMO
• A clear process for, and a history of, referring patients who have rare conditions that require expertise or treatment not available within the HMO to outside providers

Systemic Changes

• In January 2015 CA’s state insurance commissioner, Dave Jones, enacted a new Emergency Medical Provider Network Adequacy Regulation because many health insurers offered such limited numbers of doctors and hospitals that it was essentially impossible for patients to find care in the narrow networks. The new regulation required insurers to maintain adequate rosters of primary care doctors, specialists, and hospitals to fulfill the medical needs of their policyholders, as well as to maintain up-to-date and accurate directories. The provisions might seem obvious, but Mr. Jones is an anomaly in his field: in most other states the state insurance commissioner is a veteran executive from the insurance industry and finely attuned to its needs. Other state insurance commissioners should follow suit (in most (37) states, they are appointed by governors and often quietly and with little public scrutiny).
• Other standards that should be integrated: (1) the network provider contract must be in force for the same time period as the health insurance policy; (2) if a procedure is listed as covered under a plan, then all tests and ancillary services normally associated with the procedure should also be covered; (3) provider directories must be kept up to date; (4) a patient should pay only in-network fees if there is no other choice but to use a facility or a provider OON for treatment; (5) directors should not list meaningless categories to describe doctors and hospitals like “in-network but not available” and “not in-network for that procedure” just to make its network seem larger; (6) streamline and clarify statements that define annual OOP maximum payments (make sure patients are informed if it goes up).

Drug and Medical Device Costs (about 15% of our $3 trillion bill)

• Learn more about the contents and cost of the medications you are taking. Many expensive prescription medicines are just reformulations of older versions of the same drugs creatively repatented, not improved. Don’t equate sudden price hikes with an increase in value; research alternatives. Ask your pharmacist or doctor if there are more cost-effective ways to take your prescribed medications.
• Consider imports. The wholesale price of medicines in other countries may be much lower, and some may be OTC in other countries when they are not in the US. // Caveat: importing drugs for personal use is technically illegal, but intercepting small packages of medicine is impossible from a practical standpoint — and the US government has for a long time intentionally turned a blind eye to the practice so long as the supply is for three months or less.
• GoodRx.com informs you of cheaper and potentially equivalent options for different drugs.

Systemic Changes

• Import drugs — give Americans the right to buy their medicines from licensed foreign pharmacies that are thoroughly vetted and regulated.
• Give pharmacists more prescribing power. Much of Europe has three classes of medicines: OTC, prescription, and pharmacist dispensed. (e.g. In 2015 and 2016, CA and OR enacted new laws allowing pharmacists to prescribe birth control pills → no more pap smears at gynecologist merely to renew regular contraceptive prescription)
• The FDA should reform the patent process and revamp drug and device approval. The US Patent and Trademark Office could restrict the patents available to drugs that do not offer true novelty or benefits, a proposal supported by Mark Lemley, director of the Stanford Program in Law, Science and Technology. The FDA could distinguish between patented products of high and low value to patients.
• Negotiate national prices. The British National Health Service tells pharmacists how much they will be reimbursed for dispensing a certain medicine, based in part on government researchers’ estimate of the drug’s worth. In France, the Ministry of Health negotiates the prices it will pay for manufacturer’s drugs by comparing their prices with those of medicines in other European countries. If Medicare was able to negotiate reasonable prices on behalf of Americans in a similar way, commercial insurers could simply follow their payment guidance, getting rid of the many layers of middlemen and inefficient one-on-one corporate wrangling that drive up prices for American patients. // E.g. Congress declares to the pharmaceutical industry that the US will pay for its drugs no more than Canada is paying. // E.g. Congress votes to allow Medicare to negotiate with the drugmakers, achieving prices one-third of those Americans get now, by some estimates. // E.g. Congress requires the drugmakers to justify yearly price increases for long-used drugs and get preapproval.
• Promote pharmaceutical transparency, cost-effectiveness at all stages of the approval process. Insist that makers of drugs and medical devices estimate a price point from the very start of the FDA application process. Include price as part of the debates at FDA and in the broader medical community from the very beginning, even if it can’t be considered a factor for approval. The publicity alone could shame some drugmakers and device manufacturers from attempting to impose ex post facto exorbitant charges after approval.
• Create a national body like the UK’s National Institute for Health and Care Excellence (NICE) that is tasked with assessing the value of new drugs and treatments. Q: Are they cost-effective compared with other options already available and at what cost are they worth buying?

Bills for Tests and Ancillary Services (20–30% of our $3 trillion bill, by some estimates)

• Do not have any test or service performed by a provider outside of your network.
• As a general rule, avoid having your ordinary blood and fluid specimens sent to a hospital lab. Ask your doctor to direct them to a commercial lab that’s in your network.
• Ask the commercial lab for a printout of your results/scans as backup just in case it is unable to transmit them electronically to your doctor.
• Some situations demand top-dollar testing (e.g. interpretation of a pathology biopsy or a sophisticated sonogram).

Appendix A: Pricing/Shopping tools

• www.healthcarebluebook.com calculates a ‘fair price’ for a large number of procedures in different geographic locations.
• www.clearhealthcosts.com uses crowdsourcing to uncover the prices of medical encounters in the dozen or so cities where it now operates.
• www.fairhealthconsumer.org uses a huge national database of insurance claims to provide a picture of the range of physician charges for a particular type of medical encounter in your zip code.
• https://pratter.us a website where you can find the range of cash prices for procedures where you live and where you can be directed to the facility associated with each.
• www.goodrx.com plug in drug name and zip code → gives all the cash prices available in neighborhood and if there are any deals
• www.pharmacychecker.com started by a physician and connects patients to overseas mail-order pharmacies, which it vets for quality.

Appendix B: Tools for Vetting Hospitals

• www.leapfroggroup.org/ratings-reports
• Medicare Hospital Compare

Appendix D: Tools to Help You Figure Out Whether a Test or a Procedure Is Really Necessary

• https://www.uspreventiveservicestaskforce.org/uspstf/
• https://www.choosingwisely.org/patient-resources/
• https://www.cochranelibrary.com/

Appendix E: Templates for Protest Letters

I learned so much from reading this book — as a patient-consumer, as a student studying health policy, and as someone who aspires to pursue a career in health policy (thanks to this book, I now know so many other avenues and institutions to work at to impact health policy like the DOJ, FTC, FDA, AG, etc.).