A chat with Steven Brill on the evolution of 'Bitter Pill'

Returning to his hotel after giving a talk on education reform last year, Court TV founder and longtime journalist Steven Brill was taken aback by a curious sight: A group of tall towers glowing so high and bright in the nighttime Houston sky they reminded him of the oil-rich kingdom of Dubai.

Except Brill knew the Houston skyline was in the opposite direction, home to such upstanding structures as the 40-story Enron tower. He was peering at the complex of buildings for the MD Anderson Cancer Center, about six miles south of downtown.

That got Brill to thinking about the financial firepower required to construct such edifices. When I made his acquaintance last summer, he had just started working on an article about the hospital industry. I even lent some admittedly microscopic assistance on how to access financial statements for California's hospitals.

Brill's work led to the recent publication in Time magazine of "Bitter Pill: Why Medical Bills Are Killing Us." The 24,000-word article discussed how hospitals and healthcare systems systematically pile charges onto patients, inflating prices for even the tiniest aspect of care (such as $7 for an alcohol pad--about 700 times its actual retail cost), while channeling the revenues back into growing ever larger.

The article meticulously and breathtakingly documented the price gouging, seven-figure salaries, and other financial shenanigans connected to hospitals, the drug industry and their lobbies. Such items have been a staple of trade media and local newspapers and this space for years. However, it had not commanded a significant amount of attention in such a mainstream national publication until now.

"Bitter Pill" honed right in on MD Anderson, which didn't hesitate to mulct nearly $84,000 from Sean Recchi and his relatives for just his initial cancer treatments because it didn't like the way his insurance smelled, the Recchi family told Brill. And in an act that nearly makes Accretive Health look like Mother Cabrini, MD Anderson took a $7,500 advance on Recchi's credit card because it feared a check from his mother-in-law wouldn't clear before they could get around to having a look-see at that growing mass in his chest, according to the Rechhi family.

Anecdotes such as Recchi's pepper Brill's article like birdshot. He told me he had no trouble finding them. The more than 100 interviews he conducted simply began with his sending some emails to select friends.

"I have a working theory in journalism--that if 10 or 15 people know something, I ought to be able to know it. Well, 300 million people in this country have gotten medical bills," Brill said.

And despite enjoying a huge measure of media visibility and success from Court TV, American Lawyer magazine and other enterprises that he has since sold (he now runs a company providing paywall services to online publications), Brill seemed genuinely unprepared for the response to his article. Although it's been a few weeks since "Bitter Pill's" publication, he's still receiving dozens of emails a day in response.

"I'm getting them from patients, doctors and whistleblowers," he said. Among the more interesting tidbits that may yet see the light of day is a graph and memo from hospital management scolding a doctor because his trendline for performing a mind-bogglingly pricey test had been going down, Brill said.

It will take some time before it becomes clear whether "Bitter Pill" changes the needle on healthcare finance. It has created a wide-ranging dialogue, which is the first step toward legislation being introduced in statehouses and in Congress. But it also prompted long responses in both Forbes and the National Review, whose respective owners are no doubt anxious about Brill's suggestion for fixing healthcare finance: Essentially expand Medicare into a single-payer system. It is not ideologically motivated; he just notes that no other payer exercises their ability to control costs more effectively.

And Brill's article also raised the hackles of the American Hospital Association, which issued a statement "to set the record straight," saying Bitter Pill contains "inaccurate or misleading statements," and pointing out that "even not-for-profit hospitals ... must have revenues that exceed expenses."

When I mentioned to Brill that at least three AHA executives are paid more than $1 million a year, he barked a laugh. "It doesn't surprise me," he said.

"Bitter Pill" came perilously close to not becoming a critical talking point for healthcare finance. Brill was initially writing the article for the New Republic as a cover story that would have served as that magazine's "reboot" under new ownership. Yet as his reporting progressed, Brill began to develop buyer's remorse about committing the article to what is widely regarded as a niche publication, although he was prepared to stick to the commitment.

However, the New Republic decided to run an interview with President Obama for its reboot edition rather than Brill's article. Per his contract, he withdrew the article and returned his fee. Three other publications agreed within a 10-hour time span to publish it. Time got the nod because it agreed to run it in a single edition.

"It couldn't have found a better home," Brill told me.

What Brill does next remains to be seen. He seems to think healthcare finance holds a future for him--he is contemplating a startup to focus on that issue, or perhaps latching onto an existing asset. 

Or, he said, he may just go on to the next reporting project.

I certainly hope Brill starts up "Healthcare Finance TV." There would be tons to discuss. - Ron (@FierceHealth)

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