Get the Facts on the 60 minutes report on ObamaCare “Dissecting ObamaCare” featuring Steven Brill author of “America’s Bitter Pill”. We fact-check the video.
First fact-check, it’s only 13:19 minutes long, not 60:00. Take that CBS. (Seriously, CBS intended each of its segments to run for approximately 15 minutes.)
What is the 60 Minutes ObamaCare Video About?
Steven Brill takes a look at the short-fallings of the ACA, despite its successes. The video has a focus on the ACA’s lack of addressing health care industry costs (not consumer costs directly). While we generally agree with this, there is a significant number of provisions in the ACA that address healthcare industry costs and allows for the implementation of more effective programs down the road.
Pointing fingers in any one direction, hospitals and drug manufacturers primarily in this video, tends to lose sight of the bigger issue: The fact that the healthcare problem is shared by the entire 2.8 trillion dollar industry, not just one part of it. While the ACA focuses more on consumer costs than industry costs, it by no means ignores the underlying issue of healthcare costs completely. That being said, the focus is on a symptom of a complex issue, the cost of hospital services to consumers and insurers.
Let’s take a look at the claims made in the video, fact-check them, and provide some further insight into the issues discussed. Please refer to our Summary of Provisions in the PPACA and use the find command to read the sections of the law we reference. You can also bring up the full PPACA and related laws to get all the facts and follow along. You can also read this White House piece on how the ACA reduces costs and improves the quality of healthcare.
Who is Steven Brill?
Steven Brill is a well-respected author who has helped to fuel the national healthcare discussion between his book “America’s Bitter Pill” and his brilliant TIME piece “Bitter Pill”. In short a smart-yet-fallible guy, who like others (including this author), searches for truth in the healthcare crisis. In this instance he had to squeeze his take on healthcare into an edited TV segment. So while we may disagree with some of his claims, this section is not intended as a comment on his undoubted intelligence, character, or on the validity of the issues raised.
Fact-checking the 60 Minutes ObamaCare Video
Steven Brill: Good news: More people are gonna (sic) to get health care. Bad news: We have no way in the world that we’re gonna (sic) to be able to pay for it.
ObamaCare Facts Opinion: This is a bold claim. The law is set-up to pay for itself. See the CBO report from April 2014. That being said, we do indeed have a healthcare crisis that is in part a health care cost crisis. So the law that passed does need provisions to control cost effectively, and likely further reform will be needed to address the complex web of wasteful spending that spans hospitals, drug manufactures, insurers, medical device manufactures, healthcare, public health insurance, and middlemen.
Steven Brill: It doesn’t do anything on medical malpractice reform. It doesn’t do anything to control drug prices. It doesn’t do anything to control hospital profits.
ObamaCare Facts Opinion: The ACA addressees taxes and regulations on drug manufactures (Subtitle F – Medicaid Prescription Drug Coverage, Sec. 3301.; Sec. 6004.; Sec. 7102.; Sec. 9008.), addresses Medical Malpractice Sec. 6801, and addresses hospitals hundreds of times in the law (do a command find on hospital in the law or summary the word hospital appears 792 times in the law, abet the term hospital profits appears 0 times). In short, hospitals are awarded for quality over quantity and have new standards for reporting and wages for Medicare and Medicaid. Some private hospitals do have issues, for instance, in some places the for-profit hospitals tend to have short-fallings that the non-profits don’t. Some issues are shared by both for-profit and non-profits, largely depending on how they are run. Could the law do more to address Brill’s issues? Of course it could; does the law “not do anything”? No.
Lesley Stahl: So all the cost controlling side of this just went by the wayside?
Steven Brill: 99 percent of it.
Brill learned that ,when it came to controlling costs, the White House was told up front–
Steven Brill: If you go after costs, you’re never going to get anything passed because the lobbyists will just not allow it to be passed.
ObamaCare Facts Opinion: Passing legislation means making deals. No person or party can get everything they want through the legislature. The “99%” claim is hyperbole. Let’s look at Accountable Care Organizations, home-care programs, general regulations, etc. Again, we could do more, but the ACA does a lot.
Steven Brill: The drug companies, they were going to get $200-plus billion worth of new customers able to pay for drugs. They were going to avoid the calamity of the real reforms that they were worried about: price controls generally…. You and I being able to buy drugs from Canada. That would have cost them hundreds of billions.
The hospital lobby did agree to cuts in how much the federal government compensates them for Medicare patients, but Brill says overall the trade off in new paying patients would more than make up for that. And the hospitals managed to keep other cost controls completely off the table, allowing them to charge whatever they can get for hospital stays and greatly mark up drug and test prices.
ObamaCare Facts Opinion: Drug companies do get new customers. Like insurers and the rest of the healthcare industry; new customers means increased profits. That is why there is the new brand name drug tax. We don’t want to send all of our business over to Canada, do we? That isn’t going to address the issue of drug cost. The ACA attempts to make access to drugs more affordable to consumers (closing the Part D gap). It also includes oversights and studies that address drug prices like Sec. 3313. The general claim of inflated drug prices and the ACA not offering enough protection against them is accurate. However we argue that is a result of the entire system. From insurer non-payments, to hospital charges, to manufacturer profits.
Story About Cancer Treatment: In 2012…they had to pay upfront: first $48,900 for the evaluation…and then even more for the actual treatment.
Stephanie Recchi: And they told me that we would have to give them another $35,000 to get him, to get chemo.
ObamaCare Facts Opinion: This is why having minimum benefit and cost-sharing requirements is key. It prevents families from owing more than the maximum in an emergency and does away with limited Major Medical coverage. The piece doesn’t claim differently, but it’s worth pointing out that it references a problem the PPACA does address.
Steven Brill: The first thing I saw in the bill was a generic Tylenol for $1.50. Now that’s not–
Lesley Stahl: One pill?
Steven Brill: One pill. You can buy 100 generic Tylenols for the same $1.50. So that’s 1,000 percent mark-up. But who cares, it’s just $1.50. As you start going down the bill, they had something like $15,000 worth of blood tests that Medicare would’ve paid a few hundred dollars for.
The charges add up – over the single-spaced 18 pages of the bill. Independent hospital economists say these are all greatly inflated over their actual costs:
Like a PET scan for $5,453 – a 400 percent mark up.
Three CT scans for $9,685 – an 1,100 percent mark up.
The charge for his room was $10,746 for six days. That comes to $1,791 a day.
Steven Brill: You and I need to get into this business. It’s a really good– They call it nonprofit, but it’s a good business.
The single largest charge was for his cancer drug, Rituxan: for one dose, the hospital billed him $13,702.
Steven Brill: The hospital paid $3,500 for that drug. OK?
Lesley Stahl: How many times – that’s for–
Steven Brill: That’s a 400 percent mark up.
ObamaCare Facts Opinion: Hospitals, even non-profits, deal with issues like non-payments and insurer audits. This means for every $1 they charge only a fraction is ever paid. Similar to when you buy high-end software for your business, or car insurance, you pay for everyone who doesn’t pay. The aforementioned is only a portion of the overall problem. It seems obvious that significantly increased charges are apparent in the end prices at hospitals. However, one should look beyond hospitals for the root of the problem. Non-profit means the business is run to achieve goals rather than profit (and they pay less taxes). Doesn’t mean no one gets paid or makes profit. Non-profit CEOs make similar salaries to for-profit CEOs. Healthcare reform advocates have a duty to continue to look at hospital prices and programs contained within the ACA the affect them directly and indirectly to continue to address the root causes of overspending and wasteful spending related to these charges.
Steven Brill: They’ve created in health care an alternate universe economy, where everybody except the doctors and the nurses, makes a ton of money. And nobody is holding them accountable and Obamacare does zero to change any of that.
Lesley Stahl: Here we are in the U.S. Steel building. Steel defined Pittsburgh and now, the hospitals define Pittsburgh, in the sense that you employ more people than any–
Jeffrey Romoff: We employ 62,000. We are not only the largest employer in Western Pennsylvania, we’re the largest employer in all of Pennsylvania.
It’s a $12 billion- a-year global health conglomerate — by one estimate, the nation’s top grossing nonprofit hospital.
Lesley Stahl: So what’s your salary?
Jeffrey Romoff: My salary is seven – is $6 million.
Lesley Stahl: Yeah, One of the arguments against these nonprofits that are so big and make all this money is that so much of it’s going to executive pay. You make $6 million. You have seven executives here who make more than $2 million. And you have another 23 who make more than a million.
Jeffrey Romoff: So let’s add it all up. What do you have, $100 million on $12 billion? I can’t off the top of my head calculate what percentage that is. But it is likely less than one percent.
Jeffrey Romoff: We have our own insurance company.
He says the beauty of it is there’s no incentive for his hospital to overcharge his insurance company. In other words, there’s nothing to gain in inflating a patient’s bill.
Jeffrey Romoff: We are the same family. It’s the same kitty and our premiums now are among the lowest in the country.
His insurance company’s policies can be used at his hospitals as well as selected rival hospitals in the state. He thinks this idea of hospitals with their own insurance companies could be a model for the nation, and the best way to reduce inflated costs.
ObamaCare Facts Opinion: The further up the line of any company you are, the more you get paid. The ACA increases payments to doctors, and helps fund new jobs, it also ensures benefits for low-earning employees. Healthcare is one of Americas biggest industries, and hospitals and healthcare related businesses require tons of attention and capital to run. The people, who run these, make compensation in-line with the size and complexity of the business. Remember that a non-profit is still a business. Even if all executives worked for free you’d still have an $11.9 billion dollar business. Considering healthcare spending is almost at 3 trillion, you can see how this can’t be the sole cause of any problem. Since the hospital in question provides it’s own insurance it can keep its costs lower and cut out some cost inflation spurred on by insurers. The ACA allows for flexibility in establishing alternative types of insurance plans like this, and for creating regional exchanges come 2017.
Video: Even though he’s $84,000 in the hole. Today – despite Sean’s preexisting condition, the Recchis have good health insurance, because in 2013 they signed up for Obamacare. So now they have total coverage, 100 percent subsidized by taxpayers.
Lesley Stahl: So Obamacare has passed. MD Anderson goes to give someone Rituxan, are they still charging $13,700?
Steven Brill: They probably are if you don’t have insurance.
If you do have insurance – through Obamacare or otherwise, prices would in most cases, be negotiated down. What about the Recchis’ $84,000 bill at MD Anderson in Houston? It would most likely not be negotiated down because they signed up for Medicaid under Obamacare in Ohio, which is not recognized in Texas.
In their letter, MD Anderson wrote: “thanks to the Affordable Care Act, experiences like the Recchi’s should become less common. However, the problem still exists.” So even while some prices are being negotiated down, not all prices are. And Brill says that overall costs are still going up because there are now millions more people getting covered and treated.
ObamaCare Facts Opinion: As we mentioned above about the fact that being insured under the ACA helps prevent the consumer from paying the high costs. It doesn’t however address the fact that the base cost is still very high. No junk plans, means less bankruptcy for uncovered costs and rejected claims. There are many consumer protections and lots of insurer regulations in the ACA.
Lesley Stahl: President Obama says over and over that costs are coming down, or he implies they’re coming down because of the Affordable Care Act.
Steven Brill: Who knows, someday maybe it’ll be true.
Health care costs have slowed down, though Brill says not because of Obamacare… And besides, they’re still rising at a rate double the pace of inflation.
Steven Brill: The much touted, you know, savings that the president keeps talking about, it’s still increases.
Lesley Stahl: So instead of going like that, it’s going like that.
Steven Brill: You know, if there’s a stat, if there’s a piece of data that comes out that says that the galloping increase in the cost of some aspect of health care has started galloping a little less, it’s touted as the cost is going down. It’s just ridiculous.
ObamaCare Facts Opinion: The curbing of healthcare costs will happen slowly over time with the ACA. The law wasn’t written as a giant leap, it was written as one small step at a time. Healthcare spending is curbed, as is premium growth, however in many places cost are, as the speakers point out, rising faster than inflation or average income.
Video: Brill says he has come to appreciate the good that the Affordable Care Act has done – in that it’s a safety net for so many people like the Recchis. He wants the public to know that what was to be at its heart – driving down the cost of health care – was neglected, and the taxpayers are left paying for more than seems fair.
Steven Brill: Obamacare is a government takeover of health care, that’s what the Republicans say. Obamacare is the opposite of a government takeover of health care. Obamacare is the taxpayers intervening to pay the private sector for their already inflated prices that they charge for health care.
Lesley Stahl: Is there any way now to go back and add cost containment?
Steven Brill: It was impossible then; it’s more impossible now. When this becomes a fiscal crisis, that may be the ultimate res–
Lesley Stahl: But you have to wait for it to be a crisis?
Steven Brill: Yeah, that’s the way we do a lot of governing in this country; we wait for something to be a crisis. When something becomes a crisis that enough of us care about, then the lobbyists matter a lot less, because we care a lot more.
ObamaCare Facts Opinion: Anyone who bought coverage since 2014 knows that the ACA is anything but a Government takeover. If it were socialism, shopping for a plan would be easy. The ACA is just a better-regulated quasi-private solution to healthcare. It involves subsidies for consumers, subsidies for private companies, and regulations for all. Private companies, public insurers, employees, consumers, hospitals, and manufacturers all have their share of regulations and rules. It’s regulated free-market; America’s solution to the healthcare crisis.
Most reports show the ACA is working slowly and steadily. Costs that aren’t curbed under the law will continue to have a light shined on them. Either programs and advisory boards will address these, or we will need further healthcare reform down the road to address these. Steven Brill thinks it will take another crisis, and he may be right.