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Exposing the most controversial, little-known practices of America's most flawed system,Timemagazine's Pulitzer Prize-winning investigative team pulls back the curtain on the health care industry to explain exactly how things grew so out of control. Dirty examination and operating rooms in doctor's offices and hospitals . . . Health care executives pulling in millions in bonuses for denying treatment to the sick . . . More than 100 million people with inadequate or no medical coverage . . . This may sound like the predicament of a third-world nation, but this is America's health care reality today. The U.S. spends more on health care thanany other nation, yet our benefits are shrinking and life expectancy is shorter here than in countries that spend significantly less per capita. Meanwhile, HMOs, pharmaceutical companies, and hospital chains reap tremendous profits, while politiciansbeholden to insurers and drug companiesenact legislation for the benefit of the few rather than the many, while the entire system is on the verge of collapse. In Critical Condition, award-winning investigative journalists Donald L. Barlett and James B. Steele expose the horror of what health care in America has become. They profile patients and doctors trapped by the system and offer startling personal stories that illuminate what's gone wrong. Doctors tell of being second-guessed and undermined by health care insurers; nurses recount chilling tales of hospital meltdowns; patients explain how they've been victimized by a system that is meant to care for them. Drug companies profit by selling pills in the same manner that Madison Avenue sells soap, while Wall Street rakes in billions by building up and then tearing down health care businesses. And politicians pass legislation perpetuating the injustices and out-right fraud the system encourages. By analyzing the industry and offering an insightful prescription for getting it back on the right track, Critical Condition is an enormously compelling investigative work that addresses the concerns of every American.

DONALD L. BARLETT and JAMES B. STEELE are America’s most widely acclaimed investigative journalism team. They have worked together for three decades, first at the Philadelphia Inquirer, and, since 1997, as editors at large for Time. They are the only journalists in history to have won two Pulitzer Prizes and two National Magazine Awards, as well as dozens of other national awards. They are the coauthors of six books, including America: What Went Wrong?, which spent eight months on the New York Times bestseller list.

Prologue: The Crisis	p. 1
A Second-Rate System	p. 9
Rampant Overcharging	p. 15
Without A Safety Net	p. 24
A Teacher Learns A Lesson	p. 27
Spending More for Less	p. 32
Watchdog for the Drug Companies	p. 35
Emergency in the Er	p. 45
America's Unknown Killer	p. 51
Favors and Fraud	p. 63
Politics and Profits	p. 69
Wall Street Medicine	p. 75
How Profit Became Policy	p. 88
Selling the Hospitals	p. 94
Corporate Culture	p. 99
Buying the Doctors	p. 109
Nurses Who Battle the Bottom Line	p. 113
Anatomy of a Systems Failure	p. 123
A Bad Business Model	p. 128
Doctor C's Empire	p. 132
Meltdown	p. 139
Vanishing Histories	p. 145
The Labyrinth of Care	p. 155
The New Bureaucrats	p. 158
Overruling the Physicians	p. 161
The Wrong Jobs	p. 170
The Insurers' Secret Codes	p. 172
Long-Distance Diagnosis	p. 182
Online and Offshore	p. 189
Madison Avenue Medicine	p. 195
Blame it on Bad Breath	p. 199
The TV Ad Blitz	p. 203
"Ask Your Doctor"	p. 210
Risky Business	p. 215
The Celebrity Pitch	p. 223
Your Next Drugs	p. 227
The Remedy	p. 235
Curing the Ills	p. 240
Crisis and Opportunity	p. 247
Epilogue: Medicine in the Media	p. 251
Notes	p. 259
Acknowledgments	p. 267
Index	p. 269
Table of Contents provided by Rittenhouse. All Rights Reserved.

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1

A Second-Rate System

It was billed as a “Garage Sale for Mason.” By the time all the donations had come in, no garage could hold them. So the clothes, toys, old appliances, tools, car accessories–everything–were loaded onto a church moving van and carted to an open lot next to the Heartland Furniture store on the south side of town. Volunteers marked every item with white price tags, then spread them out in the lot in row after row for the big event Saturday. Nobody had any idea how many would come, but when the gates opened, people poured in, and for hours neighbors, friends, and passersby flowed through to buy something and to say hello to the six-year-old boy in whose name the event was held.

Mason McIlnay was just completing kindergarten in Salem, Oregon, when doctors discovered that he had neuroblastoma, an aggressive childhood cancer that already had spread to his bone marrow. He had been troubled by pain at night, and at first his doctor thought he might have just pulled a muscle. A CT scan turned up the cancer. Over the next two months, Mason would be in and out of the hospital for surgery, chemotherapy, and treatment of infections and side effects, as he battled a famously virulent cancer. His medical expenses ran into the tens of thousands of dollars.

It was a bill that Mason’s parents, Les and Gina McIlnay, could not afford to pay. They had no health insurance. As employees of the family flower shop, with a computer and video business on the side, they felt they just couldn’t afford it. “You never consider that something like this would ever happen to you,” said Les.

Friends and neighbors of the McIlnays got together to organize a fund-raiser for the family. Everyone pitched in, searching basements, storage bins, and closets to donate something for the “Garage Sale for Mason.” That afternoon they raised $14,000. Another fund-raiser at a car show brought in $9,000. The McIlnays were humbled. Les said he had “never seen an event like it.” A Cub Scout leader and a volunteer along with Gina at their boys’ school, Les was used to helping, not needing help, so the outpouring from the community was all the more remarkable. While the proceeds from the two events certainly eased the couple’s financial burden, the McIlnays still had thousands of dollars in medical expenses outstanding.

Every weekend in neighborhoods across America, fund-raisers like this help collect money to pay someone’s medical bills. They may be for a teenager who has a serious sports injury, a young mother who isn’t covered by her husband’s insurance policy, a victim of a catastrophic illness whose insurance has run out–anyone who has been blindsided by the overwhelming expenses of an unexpected major medical problem. These fund-raisers take many forms: auctions, walkathons, concerts, pancake breakfasts, bingo games, pie socials, car washes, barbecues, basketball competitions, church suppers, dances, and hot-air balloon rides.

In Simms, Montana, a colt, assorted livestock, and three tons of hay are auctioned offto assist with the medical expenses of horse trainer Lennard Rains, who was thrown through the windshield of his truck in an accident that paralyzed him from the chest down. In Fond du Lac, Wisconsin, a dance and raffle at the Elks Club raise money for chemotherapy treatments for Kyle Goebel, a seventeen-year-old high school senior who has bone cancer. In Quarryville, Pennsylvania, students and faculty of Solanco High School stage a variety show to benefit Meg Walck, a teacher’s wife who is battling a rare cancer. In Estancia, New Mexico, a local band performs during a dinner at the Short Stop Cafe to raise money for six-year-old Kasey Solomon, who needs a heart transplant. In Belvidere, Illinois, police officers host an all-you-can-eat chili supper at the local VFW club for community-service officer Ray Edwards, who was left with medical bills after the death of his wife. In Asbury Park, New Jersey, musicians volunteer their talent for a concert to benefit Bernie Brausewetter, a blues guitarist who suffers from congestive heart failure.

In Minetto, New York, friends and colleagues of graphic artist Dan Distler organize a banquet and silent auction to help him pay his medical bills while he fights lung cancer. In Clifton Heights, Pennsylvania, guests pay $25 a person to attend a buffet featuring a DJ and a raffle, to defray the medical expenses of thirty-year-old Ken Fleischman Jr., who is undergoing chemotherapy to treat lymphoblastic lymphoma. In central Texas, 850 people turn out for a barbecue and auction at the Medina County Fair Hall to help with the medical expenses of sixteenyear-old Josh Schueling, a high school football player who broke his neck while making a tackle and became paralyzed below his chest. In Omaha, Nebraska, members of the community line up to pay five dollars a plate for a spaghetti dinner at the American Legion post to contribute to the cost of fifteen-year-old JeffSpellman’s kidney transplant. In Severna Park, Maryland, members of the Antioch Apostolic Church perform at a gospel songfest to help pay medical expenses for Henry Bundy, a twenty-five-year-old bakery worker who was diagnosed with a brain tumor. Near Tampa, Florida, students and staffat the Wesley Chapel Elementary School present “The True Story of the Three Little Pigs” in the school cafeteria to raise money for Stephanie Granier, a fifth-grader who has non-Hodgkin’s lymphoma.

These outpourings represent the very best of America, the volunteer spirit of which the nation is justly proud, when friends, neighbors, families, and caring strangers come together to help someone in need. But what does it say about the richest country on earth that its citizens must depend upon raffles and spaghetti dinners to pay the medical bills–a situation that exists in no other civilized country? What does it say about members of Congress and presidents, Democrats and Republicans all, who are content with a health care system that ignores the needs of tens of millions of Americans while it makes multimillionaires out of those who profit from disease and death? What does it say about lawmakers and presidents who, along with their spouses and families, enjoy the very best that American health care has to offer, while they consign their constituents to a system that drives millions of sick people and their families into bankruptcy and poverty? And finally, what does it say about those lawmakers and presidents who refuse to overhaul a system that spends $1.7 trillion–that’s trillion– on a health care system that overall is little better than mediocre.

American health care mediocre? Not if you believe the people in Washington. In June 2003, President George W. Bush told seniors in Miami: “We live in a great country that has got the best health care system in the world, and we need to keep it that way.” That sounded much like former president Clinton, who, although he wanted to recast portions of the system, said in February 2000: “We do have the best health care system in the world . . . ”

This is one of America’s most enduring myths, that the United States has “world-class health care.” It doesn’t. To be sure, it does offer the very best of care to some folks. It does offer world-class high-tech surgery and some space-age medical procedures. But these benefit 2 or 3 percent of the population at most, along with the richest citizens of other countries who come here for the highly specialized treatment. Overall, isolated pockets of excellence aside, the system is second-rate when it comes to meeting basic day-in, day-out medical needs of the population at large.

Many countries around the world take far better care of their people, achieve better results from their health care systems, and do it all with far fewer dollars. In 2001, per capita health care spending in the United States amounted to $4,887. That was 75 percent more than the $2,792 that Canada spent. Yet Canadians can expect to live two and a half years longer than Americans. The Canadian life span at birth: 79.8 years. The American: 77.1 years. U.S. spending was 205 percent greater than Spain’s, yet the Spanish can expect to live 2.1 years longer. As for the Japanese, with a life span of 80.9 years, the world’s longest, they can expect to live nearly four years longer than Americans. This even though Japan’s per capita spending on health care is only 41 percent of U.S. outlays. In sum, Americans pay for a Hummer but get a Ford Escort.

On this scale, the United States does not even rank in the top ten. But the statistics are even grimmer when life span is counted in years of healthy living. A comparatively new yardstick devised by the World Health Organization (WHO), this formula subtracts from traditional life expectancy the number of years spent in poor health, the years when individuals are unable to engage in all the activities their peers do, when they are confined to beds in nursing homes and must be fed by someone else. By this measure, the United States in 2002 ranked a distant 29th among the countries of the world, between Slovenia and Portugal.

At birth, American males can anticipate 67.2 healthy years of life. But the men in Sweden fare better. They get another 4.7 years, even though the country spends less than half per capita what the United States does on health care. Italian women enjoy 74.7 years of healthy living at birth, while for American women it’s 3.4 fewer years. The women in San Marino, an enclave in central Italy that bills itself as the world’s oldest republic, do even better. They can plan on 75.9 years of healthy living–or 4.6 years longer than American women. Men in Iceland may expect a healthy life for 72.1 years, or 4.9 years longer than American men. This even though Iceland’s per capita spending on health care is little more than half that of the United States.

The United States also compares poorly with other industrialized countries in infant mortality, with 6.9 deaths per 1,000 live births in 2000. In Japan, it was 3.2; in Sweden, 3.4; in France, 4.6; in Denmark, 5.3.

And in a more revealing WHO global ranking of health care, the United States placed even farther down the list at No. 37–between Costa Rica and Slovenia, nowhere near the top five countries, France, Italy, San Marino, Andorra, and Malta.

How is this possible, especially since the United States devotes 15.3 percent of its gross domestic product to health care–double that of many countries, triple of some? The WHO survey considered two factors the U.S. government and health care community ignore: Does everyone have access? Is the cost distributed equitably across all of society? WHO reasoned that “a fairly financed health system ensures financial protection for everyone. Health systems can be unfair by either exposing people to large, unexpected costs they must pay on their own or by requiring those least able to pay for care to contribute more, proportionately, than wealthier citizens.” On that score, Americans have little competition. “The United States and South Africa are seen as the only prominent examples of industrialized countries that do not have comprehensive social health insurance.”

Thereby rests the second most enduring American myth: that all citizens have access to the highest-quality care if they really need it. Again, in isolated instances this is true. Some of Baltimore’s inner-city poor get the very best medical care America has to offer at Johns Hopkins, albeit as winners of a kind of sickness lottery. The same is true in select other cities. But the overwhelming majority of people, especially the working poor and middle-income families–including those with insurance–can get that care only if they make draconian sacrifices. They must be willing to lose everything.

RAMPANT OVERCHARGING

Almost everybody knows that a hospital stay can be hazardous to your financial health if you don’t have insurance. What isn’t so well known is that hospitals charge the highest prices to those who don’t have insurance. In other words, those least able to pay are charged the most. In a system riddled with inequities, this may be the most egregious.

Hospitals have a so-called official price list for their services. It’s the equivalent of a sticker price on a car. Big health insurers, health maintenance organizations (HMOs), and Medicare negotiate to obtain volume discounts off those rates, so they pay only a fraction of a hospital’s official price. Studies show an uninsured person who is not backed by the muscle of a pool is billed three, four, five, sometimes as much as ten times more than an insurance company whose patient has the exact same treatment.

OU Medical Center in Oklahoma City, Oklahoma, charged an uninsured patient $85,400 for a craniotomy. A typical insurer would have paid $15,600 for the same procedure. Medicare would have paid $13,900. For the unfortunate Oklahoma patient, the bill represented a 447 percent premium over the price an insured patient would have been charged and 514 percent over Medicare. The OU Medical Center is part of the country’s largest for-profit hospital chain, HCA Inc.

Florida Hospital in Orlando, Florida, charged an uninsured patient $35,200 for an appendectomy. A typical insurer would have paid the hospital $7,000 for the same procedure. Medicare would have paid $6,200. For the uninsured Florida patient, the bill represented a 403 percent premium over the price an insured patient would have been charged, and 468 percent over Medicare. The hospital is part of the Adventist Health System, which is owned and operated by the Seventh-Day Adventist Church.

The Medical Center of Aurora in Aurora, Colorado, charged an uninsured patient $24,100 for cranial and peripheral nerve disorder treatment. The average insurer would have paid $4,600 for the same care. Medicare would have paid $4,100. For the hapless Colorado patient, the bill was a 424 percent premium over the price an insured patient would have been charged and 488 percent over Medicare. The Medical Center of Aurora is an acute-care hospital in the eastern metropolitan Denver area that is part of a joint operation by HCA and HealthONE, the largest health care delivery system in the metropolitan Denver area.

Every type of hospital–for-profit, nonprofit, community, and university–takes advantage of our most vulnerable citizens in this way. The victims are Americans who work at low-paying jobs and fall between the economic cracks, folks who earn a little too much money to qualify for Medicaid or charity, but not enough to afford the stiff premiums for health insurance. Even middle-income families who are insured can find themselves confronting huge bills from an unsympathetic hospital if they have a catastrophic medical expense not covered by their plans. Unlike the very poor, who have few if any assets, many middle-class families have salaries, savings accounts, and homes– assets that hospitals aggressively pursue.

This practice of gouging the uninsured and those with limited coverage would probably have remained a secret to all but hospital insiders had it not been for the work of a crusading activist, Kevin Brendan Forbes.

From the Hardcover edition.

Excerpted from Critical Condition: How Health Care in America Became Big Business--and Bad Medicine by Donald L. Barlett, James B. Steele
All rights reserved by the original copyright owners. Excerpts are provided for display purposes only and may not be reproduced, reprinted or distributed without the written permission of the publisher.

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Critical Condition How Health Care in America Became Big Business--and Bad Medicine

Critical Condition How Health Care in America Became Big Business--and Bad Medicine

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