The Market Ticker
Commentary on The Capital Markets- Category [Health Reform]

Well then I hope you don't like your privacy.... because with said systems will come the destruction of choice -- at least unless you'd like to pay a big fat penalty rate.

The head of the Techniker Krankenkasse (TK), Jens Baas, now in the "Sueddeutsche Zeitung" daring to push to want to use the information more in future. In an interview, he suggests that data should be collected in the future of fitness trackers in the planned electronic patient records, managed by the POS.

That's translated (the original is in German) -- the gist of it is that the insurance industry wants access to your fitness data as recorded by things like Fitbits and sports watches.

Uh huh.

So here's the problem -- the law "should" forbid this, but it won't.  What will wind up being implemented is that in order to get decent pricing, you will have to "volunteer" to let them have the data -- all the time.

Refusal is of course your right, but then you'll get to pay a penalty rate, and what's even better with socialized medicine (or Obamacare for that matter) there is no option to erect the middle finger when that happens.

Those of you who keep voting for these clowns here in America on the left -- you might want to consider that most of you are overweight or obese, nearly all have metabolic damage to your endocrine system as a result of eating lots of starches and grains, and this means that you're literally voting to be taxed to death for so-called "health insurance."

Stupid is as stupid does.

View this entry with comments (registration required to post)
 

It just never ends.

There are a lot of innumerate people in this nation, or worse, those who are just lazy.  Maybe they're drunk, whether on booze or the "Obama's gonna pay my gas and mortgage!" nonsense that political charisma gins up, or perhaps they've had a few too many tokes on a pipe.  Doesn't matter, really.

What matters is that elections have consequences.  In the case of Sanders, his plan for "medical reform" will go nowhere, mostly because he won't be able to pass it if elected.  And, frankly, I don't think he's electable.

If you want to know how well socialized medicine works in the United States, go ask a veteran about the VA.  Make sure you're well out of range of thrown missiles first.

The "dream" of Medicare for everyone is just that -- a dream.  Government interference in the health system, to the tune of one trillion dollars a year, is why we have the problems we have today.  It is that willful and intentional blindness to the acts of the entire industry, acts that are illegal virtually everywhere and, I suspect, could be prosecuted here as well if anyone in the government gave a damn, that leads to the majority of bankruptcies in this country -- a majority that are caused by medical debt.

There are those who say that a free market doesn't work.  Really?  Then why is it that in a free market medical system, right here in the United States, I can have a cardiac pacemaker implanted, with the device, for $11,400.  That's not a guess, it's a quote, just like it would be to change the brakes on your car.  Now try to get that price from your local "non-profit" or "for-profit" hospital.  Best of luck; you won't be able to do it.

$11,000 sounds like a lot of money, but is it really?  Not compared against the $50,000+ that your local hospital charges for the same surgery.  Or, you can have an inguinal hernia repaired for $3,000 -- in the same place, for cash, all-in, including the mesh.  Again, try getting that price in your local hospital.  Good luck.

The real ball-buster is that even these prices are massively inflated, as are drugs. The latest outrage that is being trotted out is Martin Shkreli, who had the termerity to smirk at Congress this week.  Dr Manny is "outraged" that he did so, and that he hiked the price of a drug by 5,000% to make money.

Why is Martin smirking?  Probably because Gilead does the same thing every day, but nobody is proposing to throw their executives in prison.  Sovaldi, sold in the US for Hepatitis C and an actual cure, costs $90,000 for a course of treatment.  The very same drug is under $5 a pill in India; a course of treatment is 90 days, approximately, meaning that the very same drug is $450 there.

Shkreli did indeed hike the price of a drug by 5,000%, or 50x.  But Gilead sells their drug here for two hundred times what it sells for in India, not 50.

Before you point to the socialized medicine havens such as Europe, please be aware that in Germany and France said drug still costs many tens of thousands of dollars; cheaper than in the US but hardly "affordable."  Socialized medicine not only has failed to control said cost it has exacerbated the problem rather than fix it by hiding the actual expense from the people, just as is the case here for those with so-called "insurance."

There are 330 million of us and about seven and a half billion souls on the planet right now.  We literally pay the check for all of the drug and device development in the world.  Everyone else uses it for free.  This "system", really a racket, only works because these companies have managed to get the US Federal Government involved in pointing guns at you and threatening to throw you in prison if you fly to India and fill a suitcase full of Sovaldi, then bring it back here to the United States to sell it.

But for those laws the math on this is simple.

If there are 7.4 billion people on the planet (latest estimate), and we're 330 million of them, then we're about 5% of the earth's population.  If a huge proportion of the planet (e.g. Pakistan, India, etc) gets the drug for under $2,000 (and it does) then were we to simply remove said special protections and instead prosecute anyone trying to restrain free trade in said drug the price would rise materially in places such as Pakistan (e.g. it might double) but in the United States it would plummet like a stone to some 5% of what it costs now, or approximately that same $4-5,000.

When it comes to machinery and procedures it's even more outrageous. You can literally pay for a round-trip plane ticket to Japan and an MRI for less than many MRI centers charge for the scan alone in towns across this country.  You read that right -- I can fly round trip for about $1,000 out of O'Hare to Narita (I just priced a round-trip ticket on Expedia) and an MRI in Japan is a couple hundred bucks -- cash -- including the radiologists fee to read it!  Oh, and there are good odds said radiologist was trained in a US medical school.

The average cost of an MRI in the United States is about $2,600, which means not only can I have my MRI in Japan I can have a nice little vacation too and yet pay less than at the so-called "imaging center" around the corner.

Why do we allow this sort of rape to take place?  A functioning market economy prohibits this sort of thing because someone will decide with that sort of money to be made they'll set up a competing imaging center and force down prices.

You think not?  Well then why was it that when I ran MCSNet (second company in the Chicago area to set up public internet access in the 1990s -- we missed being first by one day) there were shortly almost 100 competitors in the local market?  You don't think that hundred competitors had something to do with the price for access being kept to reasonable levels, do you?  You don't think the second, third, fourth or fifth gas station -- or beer store -- within a few miles of where you live and work keeps prices reasonable between all of them?  Really?

The only time this doesn't happen in any line of business is when the government prohibits it either by putting in place a "licensing" system that keeps the competitor from opening his doors or raises his costs to the point that he says "**** it" and decides not to set up said business, threatens to throw people in prison for attempting to break said monopoly (e.g. by prohibiting you from buying and reselling said medicines) and/or allowing blatantly unlawful behavior under existing law (15 USC to be specific) to continue such that anyone attempting to provide said competition is either swallowed up or forced out of business.

What, pray tell, makes you think that Sanders will fix any of it if he was to get his plan put in place?  Medical cost would become less transparent and there would be less pressure to hold down prices, not more -- after all, The US Government is paying for it.

Wait...... the US Government can't pay for anything.  They can only cost shift it to the people, either directly via taxes or indirectly and sneakily via deficit spending.

That deficit spending, which amounts to an expansion of 30 times in the last 40 years (from under $500 billion of marketable debt to north of $14 trillion today) is why college is so expensive, it's why health care is so expensive, it's why your car insurance is so expensive along with the car and it's why manufacturing has all been shipped off to China!

I have written dozens of articles on this topic over the years since 2009 when Obamacare was put into law and have been following this since I ran MCSNet in the 1990s.  Nobody in the political class, from either party, will take on this issue honestly.

They're all lying and screwing you blind -- apparently with your consent, too, because you keep lapping it up.

View this entry with comments (registration required to post)
 

Give me a break.

"They spend a lot on research, the FDA makes it hard and so they have to charge a lot."

Ok.

How is it legal to charge two different people different prices by a factor of more than 1,000%?

Robinson-Patman says it's not where market power exists.

Drugs are physical commodities.  For on-patent medicines market power by definition exists and is enforced by said patent.

If I charged you a different price for gasoline for your car based on which firm writes your car insurance that would be immediately responded to with a lawsuit and/or criminal charges.  I further remind you that textbook publishers tried to sue and have prosecuted someone that bought textbooks in Asia and then resold them in the United States; that case went to the United States Supreme Court and the textbook publishers lost.

These practices need to be stopped and the law already provides for plenty of means to do sothey are destroying our economy, as are the business practices of virtually every other element in the medical field.

View this entry with comments (registration required to post)
 

2016-02-04 08:26 by Karl Denninger
in Health Reform , 249 references
 

This isn't really a remedy, but it is is a good start and it's a path available to everyone right here and now should you find yourself in a situation where you have medical care that is "uninsured" billed at you.

Average charge master pricing at Florida hospitals is a minimum of 500 percent of Medicare allowable amounts (which amounts to roughly three to four times more than hospitals negotiate as reasonable rates with commercial health insurers). The chart below illustrates typical Medicare allowable rates verses average Florida hospital charge master rates.21

Got that?  Walk into a hospital and you are being overcharged at least five times a reasonable and customary amount.

Now look at the prices on the right side of the chart.  Even if you're middle-class at best you can find a way to afford $20,000 in medical care if you have a heart attack and need open heart surgery -- "major cardiovascular procedures."

Yes, that's the price of a decent used car or a cheap new one, but you'd spend (or finance) that to save your own life, right?

You probably can't come up with $118,000 though.

Now here's the punch line:

When a provider represents that charge master list prices that it intends to bill are its regular, usual, standard, or customary charges, the provider is arguably making a false representation with the intent to mislead the patient. Florida law recognizes a cause of action for promissory fraud when a promise is made with no intention to perform.42 When such a promise is made, a cause of action arises for fraud in the inducement for which punitive damages may be awarded: “The overwhelming weight of authority in this state makes it clear that proof of fraud sufficient to support compensatory damages necessarily is sufficient to create a jury question regarding punitive damages.”43 Fraud in the inducement to make a contract is not barred by the economic loss rule. It is an independent tort that requires proof of facts that are distinct from the allegations of a breach of contract.44 Stated differently, inducing a party to enter into a contract by misrepresenting a material fact on which the party justifiably relies to its detriment constitutes an independent tort.45

In other words you not only can sue to get the bill reduced you can sue and demand punitive damages -- that is, punishment in the form of money.

Now yes, this is legal theory to a material degree, but punitive damage cases are quite interesting for a number of reasons, not the lease of which is that attorneys will often take them on contingency (that is, you don't have to fork up anything in advance) because the amount of money that can be awarded is essentially unlimited and thus taking a percentage looks quite attractive.

Now all we need is for an enterprising attorney, or group thereof, to take the obvious next step which is to bring a Racketeering suit in which treble damages are available and which is, by definition, a class action that will involve millions of dollars with the plaintiff class being every uninsured person treated in said hospital(s).  After all the "chargemaster" practice is not a singular act; it is in fact a pattern of conduct and is not confined to a single actor or facility -- it is industry-wide!

Are the landsharks beginning to smell blood?

View this entry with comments (registration required to post)
 

It's about damn time...

An uninsured woman who went to OHSU Hospital's emergency room and left a week later not knowing she'd soon be billed $31,000 is suing the hospital, claiming it charged her far more than it would have charged an insurance company for the same services.

Claire Amos' lawsuit claims that she and many other uninsured emergency room patients at OHSU have been kept in the dark about how much their treatment cost until they received their bills in the mail.

Robinson-Patman prohibits this practice for physical goods.  Everyone's hospital stay involves physical goods that move in interstate commerce.

How far is this sort of behavior from racketeering (I'd argue "it in fact falls under that category") in that it has the intent of compelling people to buy "insurance" because the implicit threat is that if you don't you'll be billed at 2, 3, 5, or even 10x or more than what the insurance company would pay?

How is this not racketeering and extortion?  Oh sure, you can claim that the insurance company and the hospital are not the same firm -- but that's a losing argument, particularly in the world we live in today where hospitals are part of affiliated networks and so-listed by insurance companies.

Goodspeed Claire Amos....

View this entry with comments (registration required to post)
 

Main Navigation
MUST-READ Selection:
Convention Of States?

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.

NO MATERIAL HERE CONSTITUTES "INVESTMENT ADVICE" NOR IS IT A RECOMMENDATION TO BUY OR SELL ANY FINANCIAL INSTRUMENT, INCLUDING BUT NOT LIMITED TO STOCKS, OPTIONS, BONDS OR FUTURES.

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 reproduced 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 or for commercial use.

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.