The Market Ticker
Commentary on The Capital Markets

Here it is:

"Notwithstanding any other provision in state or federal law, a person who presents themselves while uninsured to any provider of a medical good or service shall not be charged a price greater than that which Medicare pays for the same drug, device, service or combination thereof."

That's it.

One sentence.

If you want to add a penalty clause with it I propose the following:

"Any bill rendered to a person in excess of said amounts shall (1) be deemed void, with all services and goods provided as a gift without charge or taxable consequence to said consumer but not deductible by said physician or facility from any income or occupational tax and (2) is immediately due to the customer in the exact amount presented as liquidated damages for the fraud so-attempted."

It ends the "Chargemaster" ripoff game.

It ends the $150,000 snake bite or the $80,000 scorpion sting.

It ends the $500,000 cancer treatment.

It ends all of that, immediately and instantly.

I remind you that Medicare is required to set pay rates by law at a level that in fact are profitable -- that is, above cost by a modest amount -- for everything it covers.  Further, those pay rates are audited regularly to prove that they in fact are above cost.

Does this solve every problem?  No, and in fact that would leave alone the existing monopolistic pricing systems that many medical providers, whether they be drug makers, device makers, service providers or otherwise have in place.  It would exactly nothing to get rid of the 10 paper pushers hired for every doctor or nurse, none of whom ever provide one second of care to an actual person through their entire time of employment.

But it would instantly end walking into an emergency room and getting hammered with a $50,000 bill for something that Medicare will pay $5,000 for.

I remind you that even quite poor people can manage to come up with $5,000 in a life-threatening emergency.  Sure, they might wind up paying 25% interest on the credit card, but they can probably do it.

It's not an answer to the problems, but it would sure as hell bring down costs for people instantly and permanently, and would make the decision to not carry insurance one that people could opt for while having a rational shot at paying cash.

This matters because most of the argument for so-called "health insurance" is actually about extortion -- either buy the product or be ruined with charges that are 5, 10 or even 100x what someone who has bought the product will pay.

Ending that will force health insurance companies to actually provide a product that is affordable and provides a reasonable set of benefits -- or people can simply stick up the finger and pay cash.

Pass that, which should take no more than 30 seconds to introduce and put on the floor of both the House and Senate and then we can debate this as a permanent solution.

View this entry with comments (opens new window)

2017-06-23 10:40 by Karl Denninger
in Corruption , 121 references
[Comments enabled]  

Here's the real nutshell issue with so-called "business today":

Now, Uber has for the first time has acknowledged that Levandowski informed its now-departed CEO, Travis Kalanick, that he had five disks filled with Google's information five months before joining Uber. 

In other words the company recruited and hired this guy knowing he had stolen trade secret information from Google.

If you think this sort of event is isolated, it's not.

Witness nearly one in four Medicaid recipients being prescribed opiods in the last 12 months.  I remind you that a large percentage of Medicaid recipients are kids so the percentage of opiod abuse among adults funded through Medicaid is probably within spitting distance of half of all adult recipients.  Do you really think the pharma companies and doctors don't know this?  Of course they do, but they worked mightily to conceal it because they also know damn well that their lives will be upended if it comes to light.  Then the truth eventually does come out and what is the reaction?  A few lawsuits aimed at some pharmaceutical companies instead of indictments for drug pushing, 20,000 dead people a year be damned.

How about the market generally?  "Technology" will lead?  Is it "technology" or scams?

The biggest scam of all is found in medicine where somewhere around $3 trillion a year is spent in the United States and 80% of that is either stolen or wasted.

The largest act of theft on a daily, continual basis ever in history and yet not one indictment pops out of that conduct.

In fact our own Congress wants to pass laws to make the scam greater rather than lesser, utterly ignoring 100+ year old law that says that the entirety of these schemes are illegal -- and not just civilly illegal either, felony criminally illegal.

We have a sitting Senator, Rand Paul, who has propounded that medical providers should be explicitly exempt from said lawwhich is a blatant and outrageous admission that today they are not and should all be in prison!  Never mind that there is not one but two Supreme Court decisions which confirmed that medical-related firms are not exempt from anti-trust law.  This is what Rand wants and has expressed in his legislative blueprint:

Provides an exemption from Federal antitrust laws for health care professionals engaged in negotiations with a health plan regarding the terms of a contract under which the professionals provide health care items or services.

Of course being a doctor he ought to know, right?  Or perhaps he can simply read the US Supreme Court cases dating to the early 1980s and knows that all existing physicians and medical practices, including hospital administrators, should be rotting in prison right now and would be but for our government's 30+ year long intentional refusal to enforce said 100+ year old law?

How about Amazon?  Robinson-Patman makes illegal price discrimination in goods where the effect is to exert market power to lessen competition.  Do you really believe all that so-called "artificial intelligence" doesn't result in different prices for different people buying the exact same item in the exact same quantity?  This is outrageously illegal if you have market power -- and Amazon, in the online space, most-certainly does.  The record with regard to brick and mortar retailers is clear in this regard.

How much of so-called "innovation" today is in fact simply a means of finding a way to break a law that you are quite confident the government will not enforce?  That companies once in a while get the "oh they won't enforce the law" part wrong (e.g. Volkswagen) doesn't change the general tone one bit, especially when you manage to steal trillions annually in one industry (health care) alone!

And why, may I ask, do we the people put up with the lack of enforcement when your much less-serious lawbreaking, such as speeding, results in an immediate citation, insurance surcharges and similar -- without apology or forgiveness?

Where is the outrage aimed at these jackals, both within and beyond the beltway?

View this entry with comments (opens new window)

2017-06-23 07:00 by Karl Denninger
in Editorial , 226 references
[Comments enabled]  

This is a nasty indictment of so-called "sharing economy" entities.

We found that 85% of side-gig workers make less than $500 a month. And of all the side-gig platforms we examined, Airbnb hosts earn the most by far.

In other words there's not a prayer in hell you can make a living doing any of this; excluding AirBNB the average person was making under $400 and the median person is making under $200!

What's worse is that none of this appears to account for costs.

If you make $200 driving for Uber but spend $100 of that on fuel then how much an hour are you actually making?

Oh, and you must account for the deterioration of your vehicle (each mile has a cost in maintenance, deterioration of and consumption of the engine, transmission, suspension parts, tires, etc) as well.

And let's cut the crap on the name of this thing too.  You share something you would already be doing.  If I'm driving to work and your home and office locations are between where I would otherwise travel then we could be sharing a ride to work.  If you page me on some sort of app and I make a trip I would otherwise not make I'm not sharing anything -- I'm selling you the service of carting your ugly ass from one place to another.  Likewise, the premise of "Task Rabbit" or "Doordash" has nothing to do with sharing; I would never bring you food or deliver your package without being paid to do it because there's no part of my daily life that involves performing some random task for you.

Note that since this data set comes from people applying for loans the error, if any, is likely to be in overstating their income and expenses are not asked for.

When you consider the tens or even hundreds of billions of so-called "market value" these various "spring-ups" have in the so-called "sharing" space you have to shake your head at the gullibility of the general public -- those who are providing said services.

There's another possible explanation, incidentally, that's even worse: These firms may be exploiting people at the margin of economic survival to the point that they're "willing" to accept 50 cents/hour of real compensation.  Why? Because it beats zero -- and literal starvation.

I cannot argue that as a consumer having Uber and Lyft available as an alternative to monopolistic medallion-endowed Taxis has benefit.  However if the facts are that these so-called "firms" are simply a way to bring third-world, 10 cent/hour style wages to America, and many of these firms are additionally trying to create an indenture model to go with it (e.g. Uber and "leasing" the cars to be driven at usurious interest rates and inflated financed prices) then what we have here is an outrageous, ridiculous and intentional circumvention of laws that are supposed to protect American workers - - specifically, wage and hour law, with the firms involved being nearly the sole economic beneficiary of the actions performed.

View this entry with comments (opens new window)

From the AP:

When U.S. Senate Republicans unveil their plan to overhaul America's healthcare system, they will face a skeptical public that already does not buy the justification for an earlier version that passed the House of Representatives, according to a Reuters/Ipsos poll released on Wednesday.

They're right to be "skeptical"; Obamacare did exactly nothing to address cost, which is where the real issue resides, and the House bill, as I analyzed, would actually make it worse (which is hard to believe, but true.)

The Senate "attempt" will do the same.

The problem is not "insurance" or "coverage" -- it's cost.

Then there's this sort of nonsense, which IMHO argues for locking up doctors en-masse as drug pushers:

Nearly one in four people on Medicaid, the U.S. health program for the poor, received powerful and addictive opioid pain medicines in 2015, according to research by a drug-benefits management firm.

One person in four?

Folks, these drugs are responsible for some 20,000 deaths due to overdoses a year which wildly outranks other means of accidental death, save one: car accidents (~35,000)

There is only one way to address health care cost: Attack the monopolist practices of the industry and you need no new laws to do it, since we have a 100+ year old body of said law which, I remind you again, drug and medical firms have tried to shoot down twice at the US Supreme Court (in the 1970s timeframe) and they lost both times.

It requires only an executive either at the state or federal level, which again I remind you has responsibility for enforcing the law, to stand up and do their ******ned job, leveling indictments against everyone involved in this industry that attempts to promote monopolies or restrain trade.

That's all it will take and the entirety of the health scam will collapse in an afternoon, crashing prices by 80% or more.

You can look right here for what this would mean, and what it would do.

You will note that there is not one hint of any of this in the House proposal, and there won't be in the Senate version either.  Nor has my phone rang despite the fact that I've been to the Hill in the past and spoken with Senate staffers on exactly this point; they know damn well what's coming, why, and how to stop it.

The US Congress and President Trump are both engaged in intentionally destroying your health and bankrupting you at the same time.  These people need to be run out of town on a rail -- all of them -- and if you cheer on either political party or any of the existing political class at either state or federal level who have all refused to enforce existing law and solve this problem you are a direct contributor to and promoter of the destruction of this nation and her people.

View this entry with comments (opens new window)

2017-06-22 07:00 by Karl Denninger
in International , 286 references
[Comments enabled]  

I'm all for travel.

I'm all for adventure.

But there are third-world ****holes, never mind nations with zero respect for human rights, that are flatly unsafe to travel to.  Some are unsafe for everyone.  Some are unsafe for women (e.g. majority Muslim nations) traveling alone.  Some are unsafe for particular religious or ethnic groups.  Some are unsafe for certain nationalities and since your Passport bears your nationality prominently.....

Otto Warmbier violated rule #1 by taking such a trip -- to North Korea.  Then he did something even worse, apparently -- he stole a political propaganda piece.

Look folks, even in non-third-world ****holes there is one way to get trounced and at best be seen as an "Ugly American" -- inject yourself into the local political process.  In many nations it's actually illegal for you to do so.  It should be illegal here too for someone who is not a citizen to do so, but heh, we seem to have this snowflake thing in that regard and what's worse is that we think we can shove our particular bit of sensibility down other people's throats.

This young man paid for that first with a hard labor sentence and ultimately his life.

I will note that at least as of now despite everyone and their brother claiming he was "probably" tortured there is zero physical evidence to support that, and torture usually leaves physical evidence of some sort.  The doctors have looked for it too.  But it's not even slightly surprising, however, that if he had a medical issue in said third-world ****hole, after being arrested, that he wouldn't get much of anything in the way of care.

Inhumane?  Well, what part of third-world ****hole did you miss?

Look folks there are risks when it comes to international travel.  It's simply a fact that in a very large part of the world what we consider to be basic values regarding protection of human life don't mean a damn thing.  Those nations and people look at life as disposable and people are too.  If you expect anything approaching a United States level of care and comfort in those parts of the world you're at grave risk of ending up dead.

I hate reading stories like this one, but the fact remains that if you put yourself in a third-world situation like this that is known to be hostile, particularly to Americans, then you need to be prepared to accept the consequences -- and especially to be on your best behavior so as to tilt the odds, such as you can, toward a safe exit from said territory.

View this entry with comments (opens new window)

Main Navigation
MUST-READ Selection:
A One-Sentence Bill To Force The Health-Care Issue

Full-Text Search & Archives
Archive Access

Legal Disclaimer

The content on this site is provided without any warranty, express or implied. All opinions expressed on this site are those of the author and may contain errors or omissions.


The author may have a position in any company or security mentioned herein. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

Market charts, when present, used with permission of TD Ameritrade/ThinkOrSwim Inc. Neither TD Ameritrade or ThinkOrSwim have reviewed, approved or disapproved any content herein.

The Market Ticker content may be sent unmodified to lawmakers via print or electronic means or excerpted online for non-commercial purposes provided full attribution is given and the original article source is linked to. Please contact Karl Denninger for reprint permission in other media, to republish full articles, or for any commercial use (which includes any site where advertising is displayed.)

Submissions or tips on matters of economic or political interest may be sent "over the transom" to The Editor at any time. To be considered for publication your submission must include full and correct contact information and be related to an economic or political matter of the day. All submissions become the property of The Market Ticker.