'America's Bitter Pill' by Steven Brill... Contemporary History of Healthcare in America

This video provides an in-depth exploration of the book "America's Bitter Pill" by Steven Brill, offering a contemporary history of healthcare in America with a specific focus on the creation and implications of the Affordable Care Act (ACA), or Obamacare. Dr. Eric Bricker, the speaker, positions the book as essential reading for anyone in healthcare finance, highlighting Brill's extensive access to key political figures, industry leaders, and administration officials during the ACA's development. The presentation delves into the complex political and economic forces that shaped the legislation, revealing insights that challenge common perceptions about healthcare reform and its outcomes.

The core themes explored include the pervasive influence of corporate lobbyists on both Democratic and Republican politicians, the often-unseen power players behind major policy decisions, and the internal ideological schisms within the Obama administration regarding healthcare reform. Dr. Bricker emphasizes Brill's findings that the "coverage team" ultimately triumphed over the "cost reduction team," leading to an ACA designed more for expanding access to the existing high-cost system rather than fundamentally lowering costs. The video also highlights the surprising lack of cooperation and trust between the Department of Health and Human Services (HHS) and the Centers for Medicare and Medicaid Services (CMS), despite CMS being a division of HHS, which has significant implications for future federal reform efforts.

A central argument presented is that federal action to significantly lower healthcare costs is highly improbable because high healthcare costs directly translate into jobs, which politicians are unwilling to jeopardize. This perspective frames the American healthcare system as, in essence, a massive jobs program. Dr. Bricker concludes by discussing Brill's proposed solutions, which include hospitals selling their own insurance to eliminate the current health insurance industry middlemen, and implementing price controls for the pharmaceutical and medical device industries, drawing parallels to the "perverse incentives" of the fee-for-service model.

Key Takeaways:

• Pervasive Corporate Lobbying: Contrary to popular belief, corporate lobbyists exert significant influence over both Democratic and Republican politicians in Washington D.C., particularly evident during the crafting of Obamacare where medical device companies like Medtronic and Zimmer Biomet influenced policy decisions to avoid certain taxes. This underscores the deep entanglement of industry interests with legislative processes.
• Hidden Power Brokers in Policy: The individuals publicly perceived as driving major healthcare reform (e.g., Kathleen Sebelius, head of HHS) were often not the true power players. Key decisions were frequently made by less-known figures within the administration and Senate, such as Nancy-Ann DeParle, Gene Lambrew, and Liz Fowler, indicating that public narratives may not reflect the actual dynamics of policymaking.
• Internal Administrative Divisions: The Obama administration itself was deeply divided between a "cost team" (including Peter Orszag, Larry Summers, Ezekiel Emanuel, Bob Kocher) focused on reducing healthcare costs and a "coverage team" (Nancy-Ann DeParle, Gene Lambrew, Liz Fowler) prioritizing expanded access. The coverage team ultimately prevailed, leading to an ACA that expanded access without fundamentally addressing the underlying cost structure.
• ACA's Intentional Design for Coverage, Not Cost Control: The legislation, according to Brill, was not a failure in controlling costs due to poor implementation, but rather was designed through a series of political deals with pharmaceutical, medical device, and health insurance industries that inherently prevented significant cost reduction. This suggests that the rising healthcare costs post-ACA were an anticipated outcome.
• Healthcare as a "Jobs Program": A critical insight is that federal efforts to lower healthcare costs are highly unlikely because high costs equate to income for a substantial portion of the U.S. economy (20%), thereby creating jobs. Politicians are disincentivized to support measures that would reduce jobs and potentially lead to their removal from office, aligning political self-interest with maintaining high healthcare spending.
• Inter-Agency Distrust and Dysfunction: There is significant distrust and lack of cooperation between the Department of Health and Human Services (HHS) and the Centers for Medicare and Medicaid Services (CMS), even though CMS is a department within HHS. This internal friction, exemplified by CMS withholding information about the botched ACA website from HHS, poses a major impediment to any future federal healthcare reform efforts.
• Ineffectiveness of Certain Cost-Control Mechanisms: Initiatives like Accountable Care Organizations (ACOs), often touted as cost-control measures, were never truly intended to lower costs within the ACA framework. They were designed to "sound good" and "look like" they were controlling costs, but were undermined by the political deals made to expand coverage.
• Brill's Proposed Solutions: Steven Brill suggests two radical solutions: A) Hospitals should sell their own insurance, effectively eliminating the health insurance industry as a middleman, and B) Price controls should be imposed on the pharmaceutical and medical device industries, especially given the monopoly power granted by patent protections.
• Perverse Incentives of Fee-for-Service: The video implicitly and explicitly critiques the fee-for-service model and the role of various "middlemen" (like the health insurance industry) for creating perverse incentives that drive up costs without necessarily improving care.
• High Recommendation for Industry Professionals: Dr. Bricker strongly recommends "America's Bitter Pill" for anyone working in healthcare finance, emphasizing its ability to provide a foundational understanding of the complex forces at play in the American healthcare system.

Tools/Resources Mentioned:

• Book: "America's Bitter Pill" by Steven Brill
• Book: "16 Lessons in the Business of Healing" by Dr. Eric Bricker
• Website: AHealthcareZ.com

Key Concepts:

• Obamacare (ACA): The Affordable Care Act, a comprehensive healthcare reform law enacted in the United States in 2010.
• Fee-for-Service: A payment model where services are unbundled and paid for separately. This gives providers an incentive to provide more treatments because payment is dependent on the quantity of care, not the quality.
• Lobbying: The act of attempting to influence decisions made by officials in a government, most often legislators or members of regulatory agencies.
• Medical Device Tax: A tax on the sale of medical devices, which was part of the ACA but faced significant industry opposition.
• Accountable Care Organizations (ACOs): Groups of doctors, hospitals, and other healthcare providers who come together voluntarily to give coordinated high-quality care to their Medicare patients. The goal is to ensure that patients, especially the chronically ill, get the right care at the right time, while avoiding unnecessary duplication of services and preventing medical errors.
• Price Controls: Government-mandated maximum or minimum prices that can be charged for specific goods or services, discussed in the context of pharmaceutical and medical device industries.

Examples/Case Studies:

• Corporate Influence: Medtronic (Minnesota-based medical device company) and Zimmer Biomet (Indiana-based medical device company) were cited as examples of companies that successfully lobbied against the medical device tax through their respective Democratic senators and congressmen.
• Healthcare Institutions: Cleveland Clinic, Columbia Presbyterian, New York Presbyterian Hospital, Geisinger, UPMC were mentioned as examples of hospitals whose presidents were interviewed by Steven Brill.
• Insurance Industry: The CEO of United Healthcare was interviewed by Steven Brill, and the company was later cited as potentially executing Brill's strategy by acquiring doctors and facilities.
• Key Figures in Obama Administration/Senate:
  • Nancy-Ann DeParle, Gene Lambrew, Liz Fowler: Identified as the true power players in crafting Obamacare.
  • Peter Orszag, Larry Summers, Ezekiel Emanuel, Bob Kocher: Members of the "cost team" within the Obama administration who ultimately lost the internal debate over cost control.
  • Senator Max Baucus: Spearheaded health reform in the Senate.
  • Kathleen Sebelius: Head of HHS, but had limited influence on Obamacare's creation.