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Special Reports
The Sorry State of Health Care in America

In the Public Interest
May 5. 2008

This is the grim story of a cancer patient, Lisa Kelly, and the famous,
well endowed, non-profit M.D. Anderson Cancer Center of the University of Texas.

Barbara Martinez, a reporter for the Wall St. Journal, related the billing
hurdles that Mrs. Kelly has been confronting since late 2006 in a shocking
front-page story on April 28, 2008.

This is a tale of pay or die that recurs again and again all over our
country and only in our country in the entire western world.

Advised by her physician to go to M.D. Anderson for urgent treatment of
her leukemia, Mrs. Kelly was told she had to pay $105,000 up front before
being admitted. The hospital declared her limited insurance unacceptable.

Sitting in the business office with seriously advanced cancer, she asked
herself – “Are they going to send me home?” “Am I going to die?”

Time out from her torment for a moment. M.D. Anderson started this upfront
payment demand in 2005 because of a spike in its bad debt load.

The Journal explains – “The bad debt is driven by a larger number of
Americans who are uninsured or who don’t have enough insurance to cover
costs if catastrophe strikes. Even among those with adequate insurance,
deductibles and co-payments are growing so big that insured patients also
have trouble paying hospitals.”

It isn’t as if non-profit hospitals like M.D. Anderson are hurting. Look
at this finding in an Ohio State University study: net income per bed at
non-profit hospitals tripled to $146,273 in 2005 from $50,669 in 2000. And
you also may have noticed the huge pay packages awarded hospital

M.D. Anderson, exempt from taxation, recipient of funds from large
government programs and research grants has cash, investments and
endowment totaling $1.9 billion, with net income of $310 million last
year, the Journal reports.

Back to the 52 year old, Lisa Kelly. She and her husband returned with a
check for $45,000. After a blood test and biopsy, the hospital oncologist
urged admittance quickly. Then the hospital demanded an additional
$60,000-$45,000 just for the lab tests and $15,000 for part of the cost of
the treatment.

To shorten the story, she received chemotherapy for over a year. Often her
appointment was “blocked” until she made another payment.

In a particularly grotesque incident, she was hooked up to a chemotherapy
pump, but the nurses were not allowed to change the chemo bag until Mr.
Kelly made another payment.

She endured other indignities and overcharges. Reporter Martinez cites
$360 for blood tests that insurers pay $20 or less for and up to $120 for
saline pouches that cost less than $2 retail.

Imagine anything like Mrs. Kelly’s predicament and pressures occurring in
Canada, Belgium, Germany, Italy, France, Switzerland, Holland, England or
any other western country. It would never happen.

These countries have universal single payer health insurance. No one dies
because they cannot afford health care. In America, 18,000 Americans die
each year because they cannot afford health care, according to the
Institute of Medicine of the National Academy of Sciences. Many more get
sick or become sicker.

None of these countries spend more than 11% of their GDP on healthcare.
The U.S. spends over 16% of its GDP on health care and does not cover 47
million people and tens of millions are under covered

In the U.S. the drug companies charge their highest prices in the world,
even though we, the taxpayers, subsidized them in large ways. In other
countries like Mexico and Canada, they cannot get away with such drug
price gouging, with a pay or die ultimatum.

In the U.S., computerized billing fraud and abuse cost over $200 billion
last year, according to the GAO arm of Congress. In other counties, single
payer prevents such looting.

In other countries, administrative expenses of their single payer system
are about a third of what the Aetna’s and other insurers rack up.

In other western countries, medical outcomes for children and adults and
paid family leave are far superior to that of the U.S. The World Health
Organization ranks the US health care system 37th in the world.

When apologists in Washington hear these statistics, they say “but we have
the best medical research centers in the world, like M.D. Anderson.”

Clearly much is wrong with the nature of pricing health care.

Like other hospitals, M.D. Anderson is caught in a macabre spider’s web of
cost allocations mixing treatment costs with research budgets, cash
reserves, and just plain accounting gimmicks that burden patients.
(Documents from Mrs. Kelly’s case are available at

When a friend showed the Journal’s article to a Dutch visitor, the latter
blurted in anger – “you are a nation of sheep.” Not a very flattering
description of “the land of the free, home of the brave.”

Someday, soon maybe, Americans will finally band together and say “enough
already,” we’re going for full Medicare for all- without loopholes for
corporate profiteers and purveyors of waste and fraud.

Last month after being in remission, Lisa Kelly’s leukemia has come back.



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