Weekend Reading: Why Medical Bills Are Killing Us & The Extraordinary Science of Addictive Junk Food

Two really very thoughtful and interesting articles I read this weekend.

The first, a TIME cover story, Bitter Pill: Why Medical Bills Are Killing Us, talks about how hospitals set the fees from everything from Tylenol to CTs, and how steep the markups are for what are suppose to be non-profit institutions:

On the second page of the bill, the markups got bolder. Recchi was charged $13,702 for “1 RITUXIMAB INJ 660 MG.” That’s an injection of 660 mg of a cancer wonder drug called Rituxan. The average price paid by all hospitals for this dose is about $4,000, but MD Anderson probably gets a volume discount that would make its cost $3,000 to $3,500. That means the nonprofit cancer center’s paid-in-advance markup on Recchi’s lifesaving shot would be about 400%.

When I asked MD Anderson to comment on the charges on Recchi’s bill, the cancer center released a written statement that said in part, “The issues related to health care finance are complex for patients, health care providers, payers and government entities alike … MD Anderson’s clinical billing and collection practices are similar to those of other major hospitals and academic medical centers.”

The hospital’s hard-nosed approach pays off. Although it is officially a nonprofit unit of the University of Texas, MD Anderson has revenue that exceeds the cost of the world-class care it provides by so much that its operating profit for the fiscal year 2010, the most recent annual report it filed with the U.S. Department of Health and Human Services, was $531 million. That’s a profit margin of 26% on revenue of $2.05 billion, an astounding result for such a service-intensive enterprise.

The president of MD Anderson is paid like someone running a prosperous business. Ronald DePinho’s total compensation last year was $1,845,000. That does not count outside earnings derived from a much publicized waiver he received from the university that, according to the Houston Chronicle, allows him to maintain unspecified “financial ties with his three principal pharmaceutical companies.”

The author of this cover story, Steven Brill was also interviewed on the Daily Show, and it’s definitely worth watching.

The other piece is a NYT Magazine cover story, The Extraordinary Science of Addictive Junk Food looks into how processed food is made and marketed, and partly about the dilema that these companies face – which is when they put out nutritional food, it sells poorly (or doesn’t work b/c of the long shelf life requirements). Yet when they load it up with sugar and salt, it sells well. The story also goes in to how these foods are marketed at kids and busy working moms — really interesting stuff:

Mudd then presented the plan he and others had devised to address the obesity problem. Merely getting the executives to acknowledge some culpability was an important first step, he knew, so his plan would start off with a small but crucial move: the industry should use the expertise of scientists — its own and others — to gain a deeper understanding of what was driving Americans to overeat. Once this was achieved, the effort could unfold on several fronts. To be sure, there would be no getting around the role that packaged foods and drinks play in overconsumption. They would have to pull back on their use of salt, sugar and fat, perhaps by imposing industrywide limits. But it wasn’t just a matter of these three ingredients; the schemes they used to advertise and market their products were critical, too. Mudd proposed creating a “code to guide the nutritional aspects of food marketing, especially to children.”

“We are saying that the industry should make a sincere effort to be part of the solution,” Mudd concluded. “And that by doing so, we can help to defuse the criticism that’s building against us.”

What happened next was not written down. But according to three participants, when Mudd stopped talking, the one C.E.O. whose recent exploits in the grocery store had awed the rest of the industry stood up to speak. His name was Stephen Sanger, and he was also the person — as head of General Mills — who had the most to lose when it came to dealing with obesity. Under his leadership, General Mills had overtaken not just the cereal aisle but other sections of the grocery store. The company’s Yoplait brand had transformed traditional unsweetened breakfast yogurt into a veritable dessert. It now had twice as much sugar per serving as General Mills’ marshmallow cereal Lucky Charms. And yet, because of yogurt’s well-tended image as a wholesome snack, sales of Yoplait were soaring, with annual revenue topping $500 million. Emboldened by the success, the company’s development wing pushed even harder, inventing a Yoplait variation that came in a squeezable tube — perfect for kids. They called it Go-Gurt and rolled it out nationally in the weeks before the C.E.O. meeting. (By year’s end, it would hit $100 million in sales.)

According to the sources I spoke with, Sanger began by reminding the group that consumers were “fickle.” (Sanger declined to be interviewed.) Sometimes they worried about sugar, other times fat. General Mills, he said, acted responsibly to both the public and shareholders by offering products to satisfy dieters and other concerned shoppers, from low sugar to added whole grains. But most often, he said, people bought what they liked, and they liked what tasted good. “Don’t talk to me about nutrition,” he reportedly said, taking on the voice of the typical consumer. “Talk to me about taste, and if this stuff tastes better, don’t run around trying to sell stuff that doesn’t taste good.”


A great little spot in the mission in San Francisco [4sq]:

Food Inc

For a couple of years I’ve been meaning to watch this documentary Food Inc, about how food is now produced in the U.S. — and just the other week saw that it became available on Netflix streaming and had no excuse — watched it on my iMac that night.

I found it to be a pretty powerful movie and the interviews with the farmers were very revealing. The stats on FDA investigations, and E. coli contamination were hard to argue with.

And is if on queue, this story popped into my stream today “1 million pounds of ground beef recalled: 7 people sickened by E. coli after eating meat from California company” while I was eating a quick bite, and I just had to blog this 😉

My $.02: Cost and lack of choice make it hard for everyone to pick locally grown produce and organic meats. I think efforts to have food labels include the source of the food, treatment of the animals, etc — and make it available online — are a good approach to this. Then people can vote with their pocketbooks on what foods they want to consume, and hopefully drive the marketplace to better choices and better pricing as farmers gain predictability of demand. In fact, in Food Inc there is a segment on how Walmart is moving in the direction of offering more sustainable and organic foods — purely because that’s where the market is heading and that’s what their customers want.

Movie trailer below:

Dinosaur Bar-B-Que in Harlem NYC – best BBQ I’ve had

dinosaur_t.jpgI generally don’t comment on food 🙂 But when something stands out I feel compelled to share ! I just wrapped up dinner up on 131st at Dinosaur BBQ. (yelp review here) The food was fantastic, the portion just-right, and the service was impeccable. I ordered the “traditional sampler” that included a little bit of everything.

Now some of you who know a little bit about Automattic know that we all take BBQ very seriously. My title even includes “QA for the secret company BBQ sauce”. It will be interesting to see what my other colleagues who have a long history with BBQ think of this place.