Category Archives: Radiology Innovation and Quality

Update: On January 5, 2015, Stephen Brill published America’s Bitter Pill: Money, Politics, Back-Room Deals, and the Fight to Fix Our Broken Healthcare System, expanding on his popular Time article.

It is an interesting book, not because I agree with Mr. Brill’s data but because it happens to be a useful exercise in how data sometimes can be applied/misapplied to streamline a compelling narrative.

Below is a shameless self-reblog from my response to the original Brill article focusing on how data from a sub-sub-sub-specialized hospital should not be used to comment on an entire set of hospitals, some of which struggle to serve as the safety net for a vulnerable population.

In an article titled “Bitter Pill: Why Medical Bills are Killing Us,” Stephen Brill outlines a well-researched investigation on hospital over-billing.  In the article, Brill begins by highlighting the unreasonable mark-up MD Anderson places on every medication, service, and imaging that it provides.  He argues that this “hard-nosed approach pays off,” earning MD Anderson $531 million operating profit in 2010, and that this comprises a 26% operating margin.  $1.8 million of that went to the pockets of Ronald DePinho, the president of the cancer center.

Although Brill never outright states the connection, his implication is clear: general hospitals are the oft ignored mammoth in the health care debate, operating under the veil of legitimate non-profit business.  A general hospital funds its astounding operating income by making the uninsured and under-insured suffering patients an offer they cannot refuse – a markedly inflated bill.  It then funnels this unfairly earned profit into the pockets to the Godfather of the organization.

The logic is sensational, if only it were correct.

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In a prior post, I read Steven Brill’s story on health care hospital bills and offered a brief analysis of the “average hospital” in contrast with MD Anderson (spoilers: sub-specialty cancer treatment is profitable, the average hospital is not).  The data show that average hospitals are low-margin organizations.

Below, I argue that although the data disagrees with the vilification of general hospitals in “Bitter Pill,” the article is spot-on that medical bills are incredibly over-priced.

Then, I offer a hypothesis on why.
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