Why we should 'look at the bills' when it comes to health care costs

>>> look at that beautiful shot of the white house .

>> it is gorgeous.

>> on this chilly morning.

>> by the way, i did the calculation.

>> okay.

>> over eight years, ronald reagan 's deficits amounted to $1.3 trillion.

>> but you know the point steny was making.

>> well, yeah, but people always talk about reagan's deficits. and reagan, by the way, had a hell of a recession himself. just ask americans who are out of work then. even adjusted dollars, $2.9 trillion over eight years. barack obama has done that over the past two years. so anyway.

>> can you really compare the recession?

>> yeah, you sure can.

>> perfect segue.

>> it's a great segue. listen, here's the big problem. everybody knows this is the big problem.

>> it's the big problem.

>> over the next 30 years, next 20 years --

>> the question is whether it's sustainable. we have this special investigation into why health care costs are so high done by steve grill. why is it so expensive? he follows the money. he looks at seven hospital bills from different hospitals around the country, nonprofit hospitals, and he looks at the bills item by item. and he finds, like the acetaminophen tablet on the cover, 10,000% markup on items on everything from gauze to big drugs themselves, to even -- i noticed on one bill, hospitals charge for the ink that they use to make the "x" where they operated on you.

>> what market force out there --

>> that's ridiculous.

>> -- because there's not a direct patients paying for this pill? is that why drugs are able to mark it up 10,000 times?

>> drug companies , service providers , hospitals themselves, nonprofit hospitals which we'll get to in a second because it is a seller's market and the buyers, us, don't pay attention . we don't look at the bills. and it's a life-and-death institution. if you're in pain, if you're in trouble, you're not asking how much things cost. i mean, part of what steve does is he urges people to look at their hospital bills. it's really extraordinary. the markup. and he talks about this thing called the charge master. there's a bill in the piece, every hospital has this thing called the charge master which is a list of charges for all their products. everything from needles to drugs to gowns. and they're marked up by, you know, six, seven, eight, ten times.

>> it's a great cover because it's indicative of our universal problem. this pill is marked up how much?

>> 10,000%.

>> so what american out there, what economist out there, what policymaker out there believes that the way that we fix health care is by removing market forces even more from health care ?

>> well, it's interesting. and you know what the irony is, joe? where market forces come into play is medicare . medicare is actually assigned by the federal government to pay only the approximate charges that hospitals really spend. medicare is bending the curve in a way that the private system ensures nonprofit hospitals are not.

>> why is that?

>> medicare is obligated by law to not pay more than 6% than the actual fixed cost . one of the things that brill is he looks at a procedure -- if you're 64 and you have a heart operation that might cost you $250,000, if you're 65 and on medicare , it will cost $5,000 or $6,000 because it's all priced up if you're not covered by medicare . it's really fascinating.

>> what's fascinating is you tell me that story. i know a doctor in south florida , mike, he was doing a back surgery on a guy who was 63 years old. you know, who paid him $25,000 to do back surgery. he said the next day he did the same very the same very complicated back surgery with two, three, board-certified doctors, who's a 66-year-old who had a 200-foot you're welcome acht, and the doctor ended up making $ 1500 for the operation by the end.

>> doctors complain about how much medicare pays, but for all of us, medicare is actually a useful tool because it actually pays close to what the actual costs are.

>> crazy.

>> i have not read the piece. it's a lengthy piece.

>> it's superlong.

>> which has always added value. so i have a list here of three winners and three losers, having not read the piece. correct me if i'm wrong on my assessment. my winners would be medical labs, drug companies , people who make mri machines and other machines that hospitals employ. the losers would be doctor's and nurse's bank accounts .

>> that's very good.

>> i'm sure steve didn't get into because it's another subject, but our obsession in this country, rightfully so over the past six or seven years, banks and financial institutions too big to fail, justice department , various u.s. attorneys going after them, all rightfully so. no argument there. the drug companies have gotten off scot-free. there's a 10,000% mark-up on an aspirin or whatever pill was on the cover?

>> by the way, gauze pads, $77 --

>> and look at this.

>> -- charged for four boxes of sterile gauze pads itemized for $77. and then you look at this pill cost $1.50.

>> where's the justice department ?

>> well, i think there ought to be a congressional investigation. i think the justice department should look at these things. what the story does is it rips the veneer or a system that weapon don't understand. and the overcharging of patients, the overcharging of insurance companies , the insurance companies willing to pay these high charges, nobody's really looking at the bills.

>> the affordable care act , the obama healthcare plan --

>> can i just sum up quickly?

>> clarify.

>> this is insane.

>> we've been showing pictures while you guys have been talking. you can buy one of these pills. it costs huh $1.50 for one. when you're in the hospital. if you go to amazon.com, you can buy a hundred for less than that. for --

>> but nobody looks at the charge, when you're being charged for all of these things on your bill, the mark-up is gigantic.

>> this is like the late 1970s when everybody started doing those pentagon investigations about the $4,000 toilet.

>> right.

>> absolutely.

>> what does the affordable care act do?

>> there are good aspects and bad aspects, but it doesn't bend the cost curve . part of what's in the affordable care act , because congress gets, they get more money from both red and blue congressmen from the hospital industry, the healthcare industry , four times as much money than the defense and aerospace industry . so they're looking out for these folks. so obamacare doesn't bend the cost curve . medicare actually bends the cost curve . so one of the things that obamacare says is you can't actually look and test the effectiveness of certain drugs and the cost and that's partially because of all the lobbying by the health service industry. it's unfortunate. but medicare , if there's a hero to this piece, it's medicare , and the bureaucrat there is looking at costs, trying to keep down costs, and that is good for most americans. one of the things steve advocates and counterintuitively, if you lowered the age of medicare eligibility, not raising it. i would argue if you made medicare to buy in for people under 65, that would improve the health system .

>> why medical bills are us. rick stengel, this is a really good issue. rge tha

>> thank you. i have something about the pensacola hospitals that i'm going to show you. you can read it off my iphone.

>> fantastic. i love it.

>> coming up here on set, oscar-nominated don cheadle will be here. you're watching " morning joe ."