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

The pukefest is on today....

Congress is within reach of trashing the old and unworkable formula that Medicare uses to pay doctors. By itself, this is what it sounds like -- a bureaucratic maneuver that matters little to anyone but the doctors who treat Medicare patients. The system that Congress replaces it with, however, could represent a big step forward in improving the quality, and lowering the cost, of everyone's health care.

Uh, no.

At any rate, changing the way Medicare pays doctors is worth some deficit spending -- especially if not changing the formula, and relying on more short-term fixes, is also likely to result in deficit spending. If a new payment formula can change the way doctors practice, the long-term savings and the improvement in public health may make it worthwhile.

Worthwhile?  Utter nonsense.

What would be worthwhile (and also take a chainsaw to deficit spending) would be to remove the special exemptions in the law for medically-related goods and services and then vigorously prosecute under the Sherman, Clayton and Robinson-Patman acts the medical health care providers, facilities, insurance companies, physicians, pharmaceutical and supply firms.

There is utterly no way that you can have a $5 box of surgical absorbent pads be billed out for $77 in a hospital (which is utterly common, by the way) except via various forms of behavior that are recognized in the law as either blatant violations of anti-monopoly statutes, consumer-protection statutes or both when applied to virtually every other area of commerce.

The law recognizes that if there is a hurricane approaching (an exigent circumstance) you cannot, as a gas station owner, suddenly charge people $25/gallon for gasoline when it was $3/gallon previously.  Try that and you'll go to jail.

But you are in exactly the same position when flat on your ass riding on a hospital gurney into the OR, or in the ER.  You are a captive of the hospital and its pricing structure at that point in time and have no meaningful ability to negotiate.  Yet you can buy at retail, in single unit quantities, that box of absorbents for $5 on Amazon.  If you're a hospital and buying them by the caseload you're probably paying $2.50 -- that $5 is a retail price.

Yet the hospital will not only refuse to tell you in advance what supplies will be used and what they will cost (if the surgery is elective), despite having data on literally thousands of similar procedures and thus knowing exactly what is likely to be used, thereby using that intentional lack of disclosure on their part to prejudice your ability to negotiate in an exigent circumstance such as a heart attack or other medical emergency you are literally unable to negotiate.

Exploiting customers and holding them hostage in this fashion is, in virtually every case of commerce, unlawful.  Your car dealer cannot do it; they used to all the time when it came to repairs, but consumer protection laws were passed that forced them to issue binding estimates that had some rational connection with the service to be performed.

If you want to actually put a stop to the insane amount of money we spend on Medicare and the deficit spending it causes then you must stop the practice of billing someone $77/box for surgical wipes that cost $5 when bought at retail in single-unit quantities, along with $30,000 for a vial of scorpion anti-venom that costs $100 a couple hundred miles south in the country of origin, and which can be bought OTC there in Mexico.

The way for Congress to do this is quite simple: Repeal the special exemptions that exist and then start putting the people who pull this crap in prison where they belong.

The cost of medical care, were we to do that, would plunge by 80% and MedicareMedicaid and private health "insurance" as we currently know it would all become unnecessary.  What would remain of these current systems would be a low-cost catastrophic insurance policy that we could provide as a social benefit to those who are truly poor and thus unable to afford its modest (few hundred dollars a year) expense.

View this entry with comments (registration required to post)

So the CPI index claims the rate of inflation in prescription drugs is 5.6% annualized eh?

Well, that's only about 3x the rest of the index, but..... 

The nation's largest pharmacy benefits manager says prescription drugs spending rose 13 percent last year, the largest annual increase since 2003.

The culprit are drugs to treat things like Hep C.  Accounting for a tiny number of actual prescriptions (by volume) they're a third (roughly) of the spending.

Yeah, that's going work out real well....

And people wonder why I maintain that the current model we have for these products, where manufacturers can engage in behavior such as pricing differently across different markets (perfectly fine) and then getting laws passed that make it a crime to resell their products, effectively denying you ownership of that which you bought (outrageous), is utterly unsustainable and unsupportable.

Pricing a product how you wish is perfectly ok.  Making it a felony to buy something from someone and then resell it for whatever you can get for it is not; the latter, were that interference to be removed, would instantly cause the leveling of prices across the world and force these companies, who wish to sell to everyone on a global basis, to adopt sustainable pricing instead of literally screwing Americans blind.  The lawmakers that permit this and the pharmaceutical executives lobbying for it both deserve to spend the rest of their lives in prison; this sort of activity ought to be defined as racketeering and extortion and punished as same.

View this entry with comments (registration required to post)

So here we have a big insurance company that was just hacked and exposed nearly 80 million Americans' data -- including Social Security numbers and quite probably health information.

The Federal watchdog agency (OPM's IG office), which gets to play with these guys because Anthem serves federal employees, was told to stuff it when it tried to perform a security audit.

Not just once, before the breach back in 2013 either -- but again, now, after the hacking happened!

So here we are, with about one out of every four Americans data compromised due to this one company.  Yet we as Americans have allowed our government and these firms, along with medical providers such as doctors, hospitals and dentists, to mandate that they be permitted to demand from us positive identification, including Social Security numbers, and to store that data, along with our health information, on their servers and computers while they are not fully and financially responsible for any misuse or theft that may occur.

Are you really so stupid as to allow this crap, America?  Exactly why, may I ask?

This information is some of the most-personal there is, especially if there is something abnormal going on with you -- or has ever been in the past.  Ever had VD?  How about any sort of abnormal test?  It doesn't matter what it is, or whether it was later refuted; that information standing alone is enough to prejudice future employment, say much less a whole lot of other factors (like health insurance.)

Folks, you can either choose to take control of your life back from these jackals or not.  The choice to sit on your ass and allow data like this to be compiled and held by third parties who have been proved to have zero accountability for its safe-keeping or improper use is one that will eventually be used to destroy you.

This is not speculation, it is fact.

View this entry with comments (registration required to post)

Main Navigation
MUST-READ Selection:
The Search For Unicorns

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 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.