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Is that the sun I see this morning?
It might be.
Look folks, I don't trust Trump. Then again I don't trust politicians generally, no matter who they are, simply because they have a proven record of lying and yet while their lies are never punished ours are turned into felonies whenever those they empower are asking the questions -- including themselves!
So here's the challenge before us: As I've pointed out repeatedly in these pages since 2009 when the health care debate came into the forefront of American politics, and turned into Obamacare, we have only two choices fiscally as a nation:
1. Enforce the law against hospitals, doctors, pharmaceutical firms and those running clinics and diagnostic centers.
2. Our nation will be fiscally and, in all probability politically destroyed.
Anyone denying arithmetic is not only a fool they're both a tyrant and a thief.
To those who claim to be "conservative" yet who have failed to act on this matter for the last three decades: You're liars, thieves, tyrants and unfit to be citizens of this nation -- you most-certainly are not conservative. Deliberately subverting the rule of law, whether done by action or intentional inaction, disqualifies you on all counts.
To those who claim to be "evangelicals" or "Christians" yet who have failed to act on this matter for the last three decades: You are not Christian; no person who is can permit the sort of ravenous theft and fraud that has driven the expansion of this racket to nearly a full 20% of our economy. You are Satanists to an individual and that's a fact. Either repent here and now or own and be proud of your serpent behavior.
The laws in question are very clear. 15 USC (collectively), otherwise known as the Sherman, Clayton and Robinson-Patman acts declare that attempting to restrain trade or fix prices is felonious at a federal level. Further laws at the state level typically declare that it is a criminal act to, through any means, deceive people as to the cost of a good or service or bill them at a rate exceeding that quoted without their affirmative and prior consent.
There are other laws that also bear on this matter, including laws prohibiting extortion (the obtaining of something, particularly money, through threats or force) which facially appear to be violated thousands of times on a daily basis by the medical and insurance industries. Then there are laws that prohibit discriminatory pricing; the usual means of getting around this is to claim that the "chargemaster" price is the actual price but that then turns the so-called "negotiated price" on your EOB from the insurance company into a kickback to the insurance firm which is also prohibited in many cases and in those where it's not that's taxable income to the insurance company as debt forgiveness yet they have never been prosecuted for the outrageous level of tax evasion -- to the tune of over a trillion dollars of undeclared and untaxed income a year -- that such a scheme involves.
Hillary Clinton, should she win the Presidency, will not only refuse to address this problem she'll make it worse. We know this because she, along with her husband Bill, tried to cram down our throat what is now Obamacare when Bill was in office -- an attempt to take a set of facially unlawful acts by an industry and compel compliance through the use of government force.
Trump has hinted at dismantling this scheme, but he hasn't come out with a full-throated intent to do so.
He needs to, and he needs to do it now, explaining why it has to happen and what will come if we both do and don't take that path.
To be clear, doing it will not be painless. There will be an industry that is turned on its head and, for a short time, a nasty recession. We must accept this, because in doing so we will take roughly 15% of the cost structure out of not only your personal life but also that of every business in America.
This will not end drug R&D in the United States or anywhere else. It will cause prices to go up elsewhere in the world, in some cases by a lot, but it will also cause them to come down here in America by as much as 85%.
It will render paying cash for medical care, even fairly complex care, practical for most Americans. For those events where it is not it will turn the cost of insurance into a bill similar to that which is paid for homeowners insurance on a modest home -- a reasonable and routine expense, since with the cost of care coming down by 85% so will the cost of insurance similarly fall.
It will permanently resolve not only the Federal Deficit and, over 30 or so years, the entirety of the federal debt, it will also permanently resolve the financial problems our state and local governments face -- threats that if not addressed will cause property and other taxes to rise to unpayable levels for most Americans.
By replacing the federal deficit with a 30-year unbroken records of surpluses it will also take the current ~2% loss of real purchasing power that you have suffered every year for the last 30 and turn it into a 2% compounded annual gain over the same amount of time. You may not get a raise but you don't need one when you are gaining 2% in real purchasing power each and every year; over 30 years this will almost double your real buying power without a single penny of increase in your wages.
And finally the dramatic reduction in business cost will mean that firms will flock to both manufacture here and run their offices and administrative functions in the United States, freed from what is currently certain fiscal disaster that any reasonably-competent CEO can and has foreseen and thus is trying, in today's business climate, to avoid.
Will Trump do any of the above?
Maybe. Or maybe not.
But unlike the other candidates he has hinted at it, and he knows where the problem is, because he's lived with it through the 1990s forward, as have I. As a former CEO myself this was the issue I identified while running MCSNet that was guaranteed to destroy my company financially given sufficient time if it was not addressed.
Competitive pressures are always present in any business; they're a function of the market and part of the job is navigating them. Arithmetic is not something you can navigate; you must face it and, if you cannot convince the political powers that be to change the underlying facts that lead to these disasters you have no choice but to move as much of your operations as possible away from the jurisdictions where these disasters will take place, lest your company be destroyed.
We have a choice in this country and the time to choose is now. In 2009 my best estimate was that we had 10 years left before the fiscal pressures reached the point of doing critical and possibly irreversible damage.
It is now 2016, and that means we have less than four years remaining.
We either act now or we fail to act at all, and our decision determines whether the light that I see this morning is in fact the dawn of a new and better day..... or an oncoming train.
In 1940, entitlement payments, which include everything from disability payments to Social Security to Medicare, amounted to just over 20% of annual government spending in the United States.
Today, entitlement spending has swelled to nearly 70% of the annual federal budget.
Things are about to get a whole lot more complicated. The 20-year baby boom that took place after World War II is now beginning to result in a retiree boom.
For context, Druckenmiller points out that in 2030, the average age of an American citizen will be older than the average age of a resident of Florida today.
This demographic trend is going to create an entitlement spending catastrophe.
It doesn't have to, and the root of it isn't "entitlement spending", in the main.
Let's think this one through.
Social Security is funded by a "one in 8" tax, basically. That is, about one dollar of every $8 you earn up to a given cap is confiscated before you ever see it. You think it's half that, but it's not because the other half is paid "by your employer" and this fiction is maintained so you don't revolt.
However, your offered wage is reduced by that amount -- guaranteed.
So let's assume that we have a 2.5:1 ratio as is put forward. That sounds horrifying, except that it's a temporary problem (it lasts 20 years, roughly), and then everyone involved in "causing" it is dead. Further, there will be some that will "file late" for Social Security in an attempt to get more -- a strategy that only works if you live a very long time in terms of total funds, and lose their bet because they will die before the break-even is reached. In fact, actuaries don't care if you make this bet because they know that on balance while some will win, some will also lose and it will all even out.
No, the problem here is not the "one in 7.5" tax for Social Security. It is the one in 34 rate assessed for Medicare.
To put not too fine a point on it, Medicare and Medicaid (combined) are roughly double the outlay of Social Security and yet they are funded at a rate of less than 1/4 that of Social Security via taxation.
Further, Social Security outlays are indexed to alleged inflation, which is intentionally machined to show smaller than real figures, and thus there is a built in depression of Social Security obligations in real terms, especially over long (20, 30, 40+ year) timeframes.
Social Security itself is unlikely to go broke. If it does "run out of money" 30 years hence there will be some reduction in benefits, but remember that even a 1% inflation "miss" against reality over 30 years turns into a 35% reduction in real expense. In other words the "you'll only get 70% of your promised amounts" out of Social Security claims are probably dead wrong; you'll get the entire amount but it will be short in purchasing power by 30%.
The disability fund is another matter; that's bankrupt now and politicians have been stealing from the retirement fund for a while to cover it up.
On the other hand Medicare and Medicaid spending is going up at a radical rate compared to inflation, government-stated or not. How bad is this?
Fiscal Year 2005, for example, spent a total of $652 billion.
Fiscal Year 2015 spent a total of $1,297 billion, or close to a clean double in 10 years.
This was not mostly-centered in Medicare -- that is, retirees. Medicaid went from $182 billion to $349 billion, damn close to a double standing alone. In other words it was across-the-board in all age groups served.
That's a 7.2% growth rate which far exceeds alleged inflation -- inflation allegedly was up 20% over the same 10 years, or an annual rate of about 1.8%.
In other words that segment of the economy as spent by the government went up at a rate four times that of general prices.
Need I remind you what happens any time two exponential growth curves have a different growth rate? Go look at Leverage; there's a damn good reason that this is covered in the front of the book because if you don't understand and deal with it nothing else matters.
This, and only this, is the cause of all of the federal debt expansion, pension fund problems both private and public and the detonation that will occur in the federal budget and forward liabilities unless it is stopped and reversed.
Note carefully that we spend as a nation roughly double as a percentage of GDP what other developed, G20 nations spend on health care -- and virtually all of those other nations have socialized medical systems.
Socialism is always less-efficient than capitalism because there is no reward for innovation in a socialist system; you cannot take market share from someone else since market share is not a function of market success or failure.
This, in turn, means we're definitely overpaying by more than twice for medical care; we are in fact probably overpaying by as much as 80% across-the-board.
It is not hard at all to find examples of people being billed 10 or even 100x a price in another nation for a given thing. It is cheaper for me to fly to Narita, Japan, round-trip, and have an MRI done there by more than 50% than the average amount charged for the same scan here in the United States.
While you can in some cases get that scan done for a few hundred bucks here they're all $200 or so in Japan, and most people grossly overpay here in the US. Why? Because of various practices that all amount to consumer deception, extortion, price-fixing or all of the above -- all acts that are supposed to be crimes.
Let's say you go to the ER "in-network" on your alleged health insurance. While there some doctor sees you. He isn't in your network and you get a bill for hundreds or thousands from him. The hospital administrator should be imprisoned for allowing this along with the doctor who did it; you neither consented to such a bill nor in many cases had any ability to refuse, but the administrator could have required that said doctor be "in network" to be there or if not that he take the same reimbursement rate as if he was. He didn't and thus they both took advantage of your "in extremis" situation to bilk you. That's supposed to be illegal as a matter of general consumer protection yet not one person has gone to prison for it -- ever -- that I can find a record of.
Drug companies set prices by nation based on various things, including GDP and what they think their drug is "worth" in terms of your life or health. It's illegal to restrain trade (15 USC, Sherman, Clayton and Robinson-Patman) yet that's exactly what they do, with the help of the Federal Government, in that if you get on a plane and buy a suitcase full of some drug at a much cheaper price to try to bring it back and both make a profit while dropping the cost here in the United States it is you rather than they who will go to prison.
It is virtually impossible to get a binding quote on a procedure from nearly all medical facilities in advance. The notable exception are places like The Surgery Center of Oklahoma, which posts "all-in" prices. I note that said prices are typically one third to one fifth of what is charged in hospitals that don't post prices, including hospitals in the same general area of the country. Gee, I wonder why, and then one wonders why there haven't been thousands of criminal indictments and lawsuits alleging racketeering and extortion filed against the administrators and doctors in all the other hospitals.
Here's the reality folks, and it's a matter of arithmetic, not politics:
If we stop this right now the Federal Government would immediately and permanently run a roughly $400 billion a year surplus. In other words your purchasing power would go up rather than down every year and the federal debt would slowly be retired at a rate of about a trillion dollars every three years.
In addition the "entitlement bomb" being discussed in the linked article would instantly and permanently disappear. It simply would not exist; the short-term stress on Social Security would be manageable without material changes to the program due to the inherent understatement of inflation in the CPI used to link benefits and over the longer, indefinite time horizon the program remains stable.
Finally, were we to stop this keeping the Medicare impact on Seniors as it is today would allow Medicare to almost entirely disappear. The reason is that Medicare is an 80/20 program; if the base cost of medical care decreases by 80% (and if we only equal the socialist nations it would fall by 50%; we can do better than that with capitalism) then exactly zero needs to be spent for the cost to an actual Senior to remain the same. However, since we did promise such an 80/20 program keeping that promise is not an irrational act and thus some spending (about 1/8th to 1/5th of what it is now) would remain. Likewise, Medicaid is currently basically-zero cost for beneficiaries; if the cost of care drops by the expected amount we might well be able to get rid of many of the beneficiaries entirely since they would be able to afford to pay cash.
FISCALLY SPEAKING THE ENTIRE PROBLEM RESTS HERE -- AND NOWHERE ELSE. IF WE FIX THIS WE NOT ONLY ARE OK AS A NATION FROM A FISCAL PERSPECTIVE WE PROSPER. IF WE DO NOT FIX THIS AS A NATION WE FISCALLY (AND PROBABLY POLITICALLY) DIE.
THIS IS NOT POLITICS, IT IS ARITHMETIC. ARGUING OVER OTHER MATTERS WHEN IT COMES TO OUR POLITICAL SYSTEM, UNTIL THIS IS ADDRESSED, IS STUPID AND SERVES ONLY TO PROTECT THOSE WHO ARE CURRENTLY ROBBING YOU BLIND -- LITERALLY.
INSTEAD WE SHOULD BE DRAWING UP LISTS OF PEOPLE AND FIRMS TO BE INDICTED AND IMPRISONED. AFTER JUST THE FIRST FEW WERE SERVED THIS ENTIRE EDIFICE OF FRAUD WOULD COLLAPSE IN UPON ITSELF AND PRICES WOULD FALL LIKE A STONE.
WE EITHER DEMAND AND ENFORCE THIS NOW OR NOTHING ELSE MATTERS.
Let's update one of my Tickers from a few years ago.
We're going to use official government figures here, ignoring, for now, the private sector.
The figures of note are the following (figures to the nearest billion), out of a total of $3,688 billion.
Military programs: $563 billion or 15%
Social Security Old Age: $741 billion or 20%
Social Security Disability: $146 billion or 4%
Medicare and Medicaid: $1,297 billion or 35% (Medicaid amounts to $350 billion granted to the States (no breakdown on what part is drugs), Medicare Part D (drugs) is $75 billion; the rest is clinical services for the most part -- hospitals, doctors and similar. S-CHIP, the children's portion, is $9 billion (insignificant) and administrative expenses are about $14 billion total, which is damned efficient -- only 0.4%. Incidentally I don't believe that figure, but even if it's three times as much it's still damned impressive.)
VA (Veterans Health) approximately $61 billion or 1.7%
SNAP - food stamps -- is $104 billion and is up from last year, despite so-called "improvements" in the job market. TANF is a separate line item, $16 billion. Together, 3.3%.
That's where the money goes. Conflating Social Security and Medicare/Medicaid is the common horsecrap line run by both parties, but it's intentionally dishonest. Disability is a fraud-riddled mess, but the "old age" part of Social Security is neither going to bankrupt the nation nor is it an immediate budgetary problem.
But the $1,297 billion in Medicare and Medicaid is.
Now let's look at what Trump is proposing against this.
Price transparency in the pharmaceutical area alone would be a monster. Let's assume that of the $350 in Medicaid 10% is drugs. That makes drugs a roughly $110 billion annual federal expense.
What happens if you ban the gouging that is done today across the entire medical industry?
Well, let's remember that Medicare is an 80/20 program. That is, the government pays 80%, you pay 20%. If you look at the cost of procedures at the Surgery Center of Oklahoma, which I have posted multiple times, you'll find that many of them are about 1/3rd to 1/5th the price of local hospitals.
In other words a very material percentage -- perhaps as much as 80% -- of Medicare's non-drug spending would disappear and your bill as a Senior would drop by the same amount.
That is, of the $872 billion spent now on non-drug services on Medicare, not Medicaid, and we manage only to cut the cost in half, which just takes us to where socialized medicine manages to get in other G8 nations, $436 billion of spending by the Federal Government would disappear each and every year.
In reality competitive markets outperform socialized ones in virtually every case where there are multiple and diverse providers of products and services. As a result that 50% decrease is ridiculously conservative; I expect we'd achieve 70%, leaving us with just over $600 billion less in Federal spending every year.
Now take the drug side, which is $110 billion and presume that by leveling prices on an international basis (by ripping down the barriers) we also get a 50% savings there. That's another $50 billion every year and again, that is probably conservative; the actual drop would likely be higher.
Now let's turn to Medicaid. If we save half under the same approach, and do not drop any of the poor from the rolls (which we should be able to do for the same reason; some currently on Medicaid with this very large drop in price would be able to pay cash) we'd save another $157 billion.
We just generated $800 billion, or $8 trillion over the usual "10 year" period that is quoted, in spending cuts and not one person had one benefit they currently enjoy from the Federal Government touched in real terms.
What's even better is that we did it in one literal day starting on the first day rather than some mythical Unicorn-style belief of savings a decade hence (that have never materialized, incidentally) that the GOP typically puts out in their "budget projections."
It gets better. The Federal Government, as noted, spent $1,300 billion last year on medical care (ex the VA.) The economy as a whole spent about $3,420 billion; the other $2,100 billion or so was spent by the private sector.
These same ratios would apply to the private sector and thus you, as a consumer, would see an approximate 10% immediate and permanent increase in your real purchasing power because you would no longer be spending it on health care, either through "insurance" or directly. If your "health insurance" is through your job you'd get that 10% in the form of a raise as the cost of said insurance to your employer would drop precipitously.
Even better, the benefit would skew wildly toward those in the lower income but insured income brackets (e.g. full-time middle-class workers) because the percentage of your pay that goes to health insurance is much higher than it is for someone who is making $300,000 a year.
Of course the medical, pharmaceutical and insurance industries will scream. But there's really nothing to scream about; the claim of "charity care" is nonsense in a world where Obamacare and expanded Medicaid exists; you either have one or the other, right? As for pharmaceutical companies if they charge $2,000 everywhere for Sovaldi or $1,000 in Pakistan and $80,000 here in the United States they make the same money; what they can't do any more, nor can other nations, is soak the United States, effectively forcing our citizens to fund 100% of the development costs for drugs they then get to use.
If you're middle class these changes would mean you would be able to pay cash for anything routine and normal, and catastrophic insurance against the unthinkable (e.g. cancer, etc) will now cost a tiny fraction, 10-20%, of what it does now. That in turn means you can afford to buy it on the open (cross-state, in Trump's case) market so if Obamacare is repealed even the modest-income household can pay for said catastrophic coverage and cover the rest in cash.
Even having done so you will still be ahead on purchasing power by about 10% if you're in the middle class and quite-possibly materially more if you're in the lower income brackets and have a chronic illness. If you're wealthy you'll see a benefit too, but on a percentage basis it will be quite a bit less.
And that's just the direct impact on your personal budget that you will see immediately.
The real benefit is the long-term macro-economic benefit that comes from getting rid of federal deficit spending on an immediate and permanent basis.
Because the United States will now be running a roughly $350 billion a year surplus instead of a deficit we will start to retire the national debt. Yes, it will take decades; four or five to be exact. But that $350 billion in debt reduction every year means your purchasing power goes up even more; that is, there are fewer dollars in circulation and so each is worth more in goods and services.
This is the invisible benefit but it will accrue to everyone in the United States equally. Rich, poor, white, black, yellow, green, young, old, doesn't matter -- everyone will see an exactly identical percentage benefit.
How much? About 2% a year, every year, until the debt is retired.
That's right -- instead of you suffering inflation of the mythical 2% a year and your purchasing power being destroyed you will instead be able to save for retirement and see a 2% compounded improvement in what that money buys without taking any risk in the stock market or even being paid interest at the bank!
Finally, at the same time all of these really good things happen to you personally and the federal budget, state and local budgets, which are under severe pressure due to these spiraling costs embedded in their pension expenses, will all be immediately and permanently returned to a stable state as well.
Now this is, admittedly, assuming that Trump is actually able to implement his proposal and you can bet that there will be a lot of corporations and pressure groups that are going to do everything they can to derail it, especially when it comes to anything that has to pass through Congress.
But I will remind you that while the Executive (which is the part of the government the President controls) cannot make laws it is the Executive's job to enforce laws and there is a large body of law, specifically 15 USC, that makes felonious any attempt to monopolize a market or fix prices.
The executive is empowered to enforce existing laws without any act of Congress whatsoever.
In fact, barring passing a new law there is absolutely nothing Congress -- or the lobbyists -- can do to stop him or any other President from doing so.
The reason none of the recent Presidents have done so ought to be obvious; they, along with Congress, have all been bought and paid for.
Billionaire investor Stan Druckenmiller said an aging population will present a “massive, massive problem” for the U.S. in 15 years.
“The young people are not going to be talking about cutting back,” Druckenmiller said Wednesday night in New York at an event hosted by Addepar, a technology company that provides software to financial advisers, fund managers and family offices. “There will be nothing to cut back.”
Druckenmiller, 61, has argued for several years that the mushrooming costs of Social Security, Medicare and Medicaid will bankrupt the nation’s youth and eventually result in a crisis worse than the financial meltdown of 2008. The government will have to reduce payments to the elderly, he said at the event.
How do you do that when the elderly can outvote the younger people?
Further, will you stop including Social Security in this description of the problem? It's not the problem, and that Stan, like so many others, continue to include it tells me that something is very wrong with what is being propounded -- probably that he knows damn well where the problem is and thus how to address it but doesn't want to put that on the table.
It's really not complicated folks: Medicare and Medicaid are the problem, all of it.
Medicare tax receipts, last fiscal year and all-in, were $224 billion. That's it. Medicaid received zero since there's no tax associated with it.
But between Medicare and Medicaid last year $1,187 BILLION was spent, resulting in a deficit between spending and tax receipts of nearly a trillion dollars. In fact last fiscal year the US Federal Debt increased by $1,085 billion which means that essentially all of the actual deficit was due to this disparity.
You got that folks? The entire reason that we have a budget deficit -- all of it -- is that we are spending $963 billion more than we take in through taxes on Medicare and Medicaid.
THE ENTIRE PROBLEM LIES THERE, ALL OF IT.
Now to be fair, the Social Security system ran a $150 billion deficit last fiscal year too. But $150 billion is chump change compared against $960 billion, and the latter is growing in payments far faster than receipts.
If you think you can effectively double the tax rate paid for Social Security, Medicare and Medicaid (that, I remind you, would mean that your actual tax rate for these programs would be 30% from dollar #1 for all wage dollars up to the FICA limit and then 15% for every dollar thereafter!) you're nuts. That sort of tax increase would literally drive anyone in the middle income brackets and below into the poorhouse; it would be a doubling of the actual effective tax rate on those not making enough to pay federal income tax net of deductions and credits, for example, and would be a monstrous (30% or more) effective tax rate increase even on those with a $100,000 gross income!
That's simply not plausible to implement -- period.
Nor can you CUT Medicare and Medicaid expenditures by 80% (which you'd have to) except by getting rid of the need for both programs for everyone except those in abject poverty.
This means there's only one way to solve the problem:
You must eliminate the need for Medicare and Medicaid for everyone that is not abjectly poor.
So how would you go about doing that?
What if you knew that scorpion antivenom that costs $30,000 a vial in Phoenix was $100 a vial in Mexico where it is made, just a few hundred miles south? It is.
What if you knew that Sovaldi, the cure for Hepatitis C that costs nearly $90,000 for a course of treatment in the United States has a cost of approximately $1,000 in India and Bangladesh? It does.
What if you knew that if you went to either Mexico or Bangladesh and bought 100 courses of treatment of either drug and brought it back into the United States to sell at a 100% mark-up, an act that (if replicated) would not only make you a nice profit but also instantly force down the price in the United States down to something reasonable, you would have your lawfully-purchased courses of treatment confiscated and you would almost-certainly be charged with a crime and imprisoned? That's exactly what would happen.
What if you knew that an MRI that is often billed out at $3,000 in the United States can be purchased for cash for about $200, including the reading of the results by a qualified MD, in Japan? This means that it is actually cost-effective for you to get on a plane, fly to Japan, have the test done and then fly back home as opposed to having it done at the MRI place around the corner! That too is true.
What if you knew that surgeries performed in an open competitive market were often available, even here in the United States, for 20% -- that is one-fifth -- of the price charged in other places just a few miles away? Oklahoma Surgery Center anyone?
What if you knew that people are routinely billed hundreds or even thousands of dollars for a "consultation" that consists of a doctor who you never met and had not consented to treating you sticking his head in your hospital room and saying "Hello!"? This happens literally every single day in hospitals across this country.
What if you knew that people often cannot get a quote on a procedure before it is performed and even if they do hospitals and other medical centers will frequently bill for other things without consent, even when it could have been provided, and then demand payment? Such a practice in virtually any other business, such as auto repair, air conditioning and heating work and similar is a criminal act under state consumer protection laws, incidentally. That happens literally every single day in medical centers and hospitals as well.
What if you knew that people were being billed for procedures that never took place in hospitals, such as being billed for a "trauma team activation" when no life-critical trauma occurred and in fact no such activation or care was provided? Such an act in other businesses, such as billing you to replace an alternator in your car that wasn't actually replaced is and is prosecuted as a crime. This has been documented to happen as well.
What if you knew that common off-patent medicines are often "reformulated" in their inactive ingredients (that is, the ones that don't treat the condition) and then the former product discontinued, sometimes under government pressure, resulting in cost increases of 200, 300, or even 500% and the disappearance of inexpensive OTC alternatives? This happens all the time with Albuterol being one such particularly-outrageous example; Primatine Mist, the OTC alternative, was forced off the market and the price of the prescription alternative roughly tripled.
What if, in short, you knew that medical care and so-called "health insurance" in this country is effectively a cartel operation that, in virtually any other industry, would be considered racketeering and prosecuted with thousands of people going straight to prison, firms being broken up or closed and those gouged having their funds returned?
Well, there's a damn good argument that this industry is chock-full of exactly that sort of behavior by virtually everyone in it!
Now let's look at what has happened not in gross dollar terms but in terms of GDP. Health care has gone from a low single-digit percentage of the economy (about 3-4%) to roughly 19% today.
We have a $17 trillion economy and of that $3.23 trillion, roughly, is health care, $1.2 trillion of that spending is by the government and virtually all of it spent in deficit by devaluation of everyone's purchasing power amounting to roughly 6% per year, compounded!
If we broke up those cartels and both Health Care and Health Insurance were returned to being a competitive market the share of the economy would shrink from $3.23 trillion to about $640 billion a year.
Now let's think this one through -- there are 330 million people, roughly, in the nation today. At $640 billion total per-person expense on medical care would drop to approximately $2,000 per-person from the $10,000 per-person spent today.
Nearly all people can afford $2,000 per year; if the threshold for "affordability" is 10% of your income all-in, anyone who makes $20,000 a year or more could afford it where right now you need to make $100,000 to reach that threshold.
Further, with even the cost of catastrophic events dropping by 80% you would be able to buy catastrophic insurance for the few instances where you can't afford the out-of-pocket for a small amount of money -- and that comes out of this $2,000 per-person cost! In other words it would be about as expensive as a basic automobile liability policy to have catastrophic health insurance -- about $75/month.
The screamfest about things like "birth control" are an intentional fraud by those advancing such arguments; you can buy, for cash, birth control pills for under 50 cents a day. In many cases for drugs like this, along with common antibiotics, the co-pay is higher than the cash price for generics!
Resolving this situation would effectively allow the removal of Medicare and Medicaid from the federal budget even though it would not actually go away. It would instead be limited in accessibility to those who are under the poverty line and between that restriction and cost reductions it would fall in expense by about 90% in the Federal Budget.
Simply restoring The Rule of Law to the medical and insurance industry instantly and permanently ends the federal deficit and in doing so would result in a roughly 6% improvement in every citizens' purchasing power every single year thereafter, compounded, because the purchasing power destruction that inevitably and immediately is caused by deficit spending disappears.
That benefit goes to everyone, rich and poor alike and as a consequence will massively benefit the economy as a whole over time.
Who loses? The medical and insurance company cartel members. Yes, their income would decrease - - a lot. And? These people are a small minority of the population and more to the point the "service" funds they consumed could then be spent in the production and purchase of goods, which improves the net wealth of the nation instead of simply shifting money from one person to another, and furthermore the cessation of purchasing power destruction would be of benefit to everyone -- including them.
You've seen me spend a lot of digital ink on this issue over the last six or so years but not one person in a public policy role wants to engage in this debate. None. Not in the Republican Party, Democrat Party, Libertarian Party or otherwise. I was damn near run out of town in the Libertarian party for insisting that the party stop endorsing and supporting candidates that refused to take this on and in fact lied about it in their campaigns. When it became apparent that the party had zero intention of addressing this issue, the issue that will destroy us economically without question, I left the party.
You'd think if any of these political types had a counter-argument that made sense they'd be happy to take me on and demolish me publicly in said debate (after all, it would be great for them, right?) but it hasn't happened despite multiple offers on my part, and that of a few others, to engage on this point. I have made repeated offers to do so and in fact have offered in the past (and you can count this posting as a further offer) to travel at my own expense to Washington DC or anywhere in the State of Florida to engage in said debate.
Even people attempting to solve the problem through example, such as the folks running the Surgery Center of Oklahoma, can't get a functional debate going with either public policy people or the heads of traditional hospitals and insurance companies.
We all know why this is the case but sticking your head in the sand will not stop what Stan (and I, along with others) have outlined from coming to pass. That can only happen by taking this issue on and focusing political energy virtually anywhere else is a waste of time both because this is a certain destroyer of our economy if it is not halted and halting it will take time.
How much time do we have? I don't know where the zero barrier is on this from a fiscal point of view and neither does anyone else, but that it exists and that markets never let you reach it are both a certainty.
Every day we delay as a nation and a people is one in which the odds of an "accident" in this regard go up, and once our feet go off this cliff there is simply no clean way back on solid ground.
It isn't often that three bogons show up in quick succession, but we've got it here from the so-called paper of record of the scam machine known as Wall Street.
First, let's deal with the so-called Obamacare Escalator.
On Wednesday the actuaries at Health and Human Services released their new annual projected measurement of national health expenditures for last year and through 2023. Spending in 2013 grew at a relatively low rate in historical terms for the fifth consecutive year below 4%, though at 3.6% it still outpaced real economic growth. They expect the rate to climb to 5.6% in 2014 and continue rising by 6% a year on average through the decade.
Health spending as a share of the economy rose to 17.2% in 2013 from 16.2% in 2007 and will hit 19.3% in 2023, assuming that GDP grows as smartly as the auditors project. In other words, health care will soak up nearly one of every five U.S. dollars instead of one of six. Taxpayers will finance 48% of that spending a decade out, up from 41% in 2007. Thank you, Peter Orszag
So let me see if I get this right.
Health care spending as a share of the economy will go to 20% within the next 10 years. It's bad because that will hit the Federal Budget. But it would be "good" if it didn't, and instead skull****ed everyone in America who isn't Michael Jordan or Bill Gates within an inch of their lives?
The mental gymnastics required to get there are beyond ridiculous. Oh, and guess what -- they even try to justify it:
Medical spending is valuable to the extent Americans are buying longer and healthier lives and financing innovation in treatments and therapies.
Would spending on gas be "valuable" if the fuel was $30/gallon to the extent you could get to work using it?
Well, maybe. But shouldn't we instead be asking why it's $30/gallon instead of $3 when the only reason it's $30 is the monopoly protections that the government provided for in the form of specifically enabling price-fixing of various sorts?
How do we know this? We know it because hospitals claim it's perfectly reasonable to charge $9,000 to bandage a finger and $60,000 for two $100 vials of scorpion antivenom that can be purchased over the counter a couple hundred miles to the south. We also know this to be true because a common test that can be purchased for $20 is charged out at $10,000 by some hospitals.
It is in fact laws that make criminal the sale and possession of said anti-venom without a valid license from a cartel-controlled group that enable said $60,000 price, just as it is laws that make a crime your attempt to have such a test done for $20 on yourself without a valid prescription by a member of that very same cartel.
Those acts -- restraint of trade where market power exists -- are supposed to be felonies according to The Sherman and Clayton Acts. They in fact result in prices that are thousands of percent higher than the market price for said commodities and services. It is in fact these acts that leads to an entire industry being required for most people and having a reason to exist in the first place (that is, the medical "insurance" business), a situation that is facially a close analogue to a mafia protection racket.
Then there's this ditty on Disillusioned Doctors....
This economic interaction fostered a better physician-patient relationship. Unfortunately this is lost in U.S. health care, where third-party payment dominates and physician allegiance is divided between trying to take good care of patients while adhering to demands of government agencies and insurance companies which pay the bills.
You know what happens when you allow yourself to be used as a pawn akin to a drug mule for a cartel?
You get ****ed, that's what.
Doctors really thought they could be a part of the above crap, actively participate in ****ing their customers out of trillions of dollars at the behest of and for these other actors and come out ahead in the long run?
Oh sure, it worked great for a while. Being a doctor used to be a solid middle-class profession. Then it turned into one that got you a Porsche and a mansion when you began robbing people. That was a carrot -- the stick is that you weren't going to be able to keep any of it long term because you were cooperating with and enabling the devil.
I was proud to see the health-care system working, to see academic medicine working, and most of all to see my son run as fast as he could out of the ER two hours later.
Then the bill arrived, and you know where this is going: $20,000. Our insurance had already paid $17,000, and we owed $3,000 out-of-pocket. What for? Among the items listed on the printout was a $10,000 charge for a "trauma team activation." This made me want to give consumers some very simple tips on how to fight their health-care bills, so here goes:
The rest of the article is a bunch of arm-waving about how he got rid of the bogus $10,000 charge.
Bogus, I say, because no such activation of said trauma team occurred and if it had it would have been in direct violation of published regulations.
He finishes with (after getting the bogus $10k charge removed) "be graceful in victory and realize you got lucky."
You see, billing someone for a thing when you didn't do it has a name -- F.R.A.U.D.
When that is systemic, that is, intentional and widespread instead of an occasional "mistake" how do you argue against a position that you're operating a criminal enterprise.
And that means that everyone involved would be engaged in the felony known as Racketeering, which in turn means treble damages, huge fines and prison time for everyone involved from the Hospital Administrator on down to the doctors and clerks who were fully aware that they billed out for services they didn't perform.
All in my opinion, of course, since that would be the outcome if we lived in a world where there was actual Equal Protection of the Law.
I will remind you that we're supposed to live in that world because our Constitution via the 14th Amendment says:
All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the state wherein they reside. No state shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any state deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.
So there is supposed to be one law for everyone. So says Amendment 14.
You and I go to prison when we rip people off for 10 large, especially when we do it daily on a systemic basis.
So here's my position on all of this:
If the hospital, doctors, billing clerks and administrators don't have to obey the law why should those people expect anyone else to obey the law in their dealings with them?
You want to know how we get Mad Max in this country? Keep playing this game long enough, keep making excuses for what ought to be hard-time felonies, and eventually you'll******off the public enough to find out.
I'm not looking forward to that day and if you have any common sense you're not either.
Cut the crap and stop making excuses.