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Considering sending spam? Read this first.

And.... here it is!

On sale for you for the long weekend....


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2020-02-16 06:27 by Karl Denninger
in Health Reform , 106 references
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I want Bob Hertz's full bio.

The recent proposal by Sen. Bernie Sanders to cancel $81 billion of medical debt is a very good start – but it is only a start.

The RIP Medical Debt group–which buys  old medical debts  ,and then forgives them– is absolutely in the right spirit. Its founders Craig Antico  and Jerry Ashton  deserve great credit for keeping the issue of forgiveness alive.

Unfortunately, over $88 billion in new medical debt is created each year – most of it still held by providers, or sold to collectors, or embedded in credit card balances.

Tragically,  none of this has to happen! In France, a visit to the doctor typically costs the equivalent of $1.12 .  A night in a German hospital costs a patient roughly $11. German co-pays for the year in-total cannot exceed 2% of income, Even in Switzerland, the average deductible is $300.

Note that, if you read the article, the byline is "Bob Hertz, a health care essayist."

What is a Health Care essayist?  How do you make a living writing essays?  More to the point, what's this dude's day job?  A quick Google search doesn't shed usable light on the subject and Yves didn't link to a full bio either.

I do give one piece of credit; as Yves notes, he lays out the different categories of people who get ass-rammed by the medical fraud system in a fairly-comprehensive manner.  But notice what's missing, repeatedly and intentionally through that piece of prose -- Yves didn't, which leads me to wonder why not, given the glaringly obvious points made.

  • Billing someone "by surprise" is felony criminal fraud.  You can't consent because there is no offer, acceptance, consideration and performance.  There is thus no contract.  You cannot have a meeting of the minds -- offer and acceptance -- when you are intentionally deceived.  The hospital in the case of the out-of-network "assistant surgeon" knows the "assistant" is out of network and deliberately does not tell you before putting you under anesthesia.

  • Coerced "assignments" and "consents" are felonies standing alone; they are literally extracted while you are under duress, and in many cases incompetent by means of drugs administered by the entity who asks you to sign!  We put people in prison who "roofie" your drink and then screw you -- with good cause.  The law calls that rape, because it is.  This is no different.

  • Ditto for "responsibility paperwork" often presented to family members. The hospitals who do this are no different than members of the mafia; they imply they'll let your mother, father or sibling die if you don't take financial responsibility for their medical procedures.  That practice should be met with immediate summary execution of said business with RICO prosecutions and revocation of business licenses; any organization engaged in that practice is functionally no different than The Mob and should be treated with equal harshness.

But really, when you get down to it, this man's essay is completely devoid of any policy matters related to cost.

Everyone wants to talk about "insurance", which is also a fraud on its face and a criminal felony.  Insurance is a legally-defined term.  The business of insurance is defined as the practice of pooling large numbers of persons together who each pay a small amount of money into a pool from which unlikely but expensive events are paid out.

You cannot buy fire insurance on your house if it is already on fire.  Nor can you buy flood insurance if your home is already flooded, or likely to imminently be so.  Insurers suspend underwriting during a potential named storm impact, even if the hurricane is not yet fully-formed and it is not yet certain where it's going to hit.  Once the probability rises materially above the baseline that exists at any time underwriting is suspended for the same reason you can't buy fire insurance once your home is on fire.  An event that is no longer possible but now is in the probable or certain category is not insurable.

Since, as the author notes, everyone eventually needs some sort of health care you cannot sell nor buy a thing legally defined as "insurance" against such already-occurred events.  We can call it something else but calling that thing insurance is a criminal felony act of fraud and every executive, employee and medical provider who uses the word "insurance" in relationship to such a product has deliberately deceived you as to what you what was and is being both sold and bought, which is an act of fraud.  Period.

The cost of "insurance", when what you buy is actually insurance, is directly related to the cost of the underlying event.  Nobody works for free.  Ever.  Therefore if something is too expensive layering some indirect means of payment on top of it makes the problem worse rather than better.


That sort of system is not a "safety net" it is further criminal fraud, this time by the politicians all of whom deserve prison.  Right here and now.

And finally those advocating for expansion of criminal frauds are co-conspirators and, under the principles of law that have existed since before this nation, are liable as accessories before the fact for the frauds of the primary actors.

The only means to address the problem is to go after cost.  We currently are putting nearly 40,000 people a month "to work" in the so-called medical industry and have been for the last decade yet fewer than 1 in 10 of them ever provide a single second of care to a single person.  The rest are "employed" chasing money -- that is, they are employed for the explicit purpose of screwing you.

This is intentional and undertaken for the explicit purpose of driving up price.

I remind you that all insurance is a regulated business with a regulated profit margin.  The only way for such a business to "grow" is for the events "insured against" to become either more-frequent, more-expensive or both.  Would you rather make 10% of 1 million or 10% of 100 million dollars?

That's what I thought and yet there is exactly zero mention of this -- a further scam -- in the media.

Buying up practices and consolidating them in a given area is likely criminally illegal under 100+ year old felony anti-trust law (15 USC Chapter 1.)  One of the primary tests, indeed, the test of such actions is whether they are intended to or do reduce competition.  Study after study has shown that is in fact what happens and is the intent of said persons; prices inevitably rise after such acts, often by outrageous and unconscionable (e.g. doubling or more) amounts.  Yet not one felony indictment has been issued that I can find in the records despite literal thousands of such "consolidation" actions over the last decade and more.

Medicare prohibits self-dealing (e.g. a doctor owning a lab to which he refers work.)  Congress only prohibited this for Medicare and Medicaid.  Why did we need a new law on this at all?  Such self-dealing when the customer is not given any opportunity to shop said services is an outrageously deceptive practice without any new laws and as such is prohibited by consumer protection law in all 50 states.

I cannot find one prosecution for this anywhere in the country.

Why not?

There are relatively simple answers to the problem of cost but all such answers flow through The Rule of Law.  My proposal would immediately resolve essentially all of these issues.  But -- it gets no hearing, and the reason is simple: There are millions of people who make a lot of money screwing you in the ass, and stopping the screwing, no matter by what means, will put those people out of work.  In addition insurers, doctors and hospitals will all see their extraction end and they, along with the pharmaceutical company, bribe Congress by the billions.

What's worse, however, than the current******job is what people like this jackwad propose.  Providing official government support to the existing racketeering games in the health care system is nothing more than institutionalizing them into the Federal Government!

All government at some level is coercive.  We accept this because the common good demands it but logic demands that we only accept it when it is employed to stop existing force or frauds being leveled against the public.  When someone robs a bank the act of apprehending them, along with their subsequent trial and incarceration, is coercive.  But said person(s) earned that coercion by first sticking a gun in a bank teller's face.

I have been on this crusade for more than 20 years.  It began when I started running MCSNet, bought group health care for my employees, and rapidly became very educated on exactly how it is priced (it's individually-rated, if you didn't know that) and the screwing this results in for people both seeking and those currently holding jobs.  Yes, that screwing is illegal, but it happens every single day and there's nothing you can do about it because while asking someone if they're likely to have a child (for example) is illegal what can't possibly be made illegal nor punishable is simple observation of the blatantly-obvious and visible characteristics of someone who comes in for an interview.  You can pass all the laws you want to try to "stop" that but there's no possible way to enforce them.  Nor is any such law just as any such law is demanding that said person's fellow employees, who are clearly not so-compromised, pay the cost in the form of reduced salary so said person can have a job.  Using the government as a means to shove a gun up someone's nose because they're not sick and force them to pay for someone else is the very definition of Communism: From each according to their ability, to each according to their needs.

The flaw in all such arguments is that you cannot compel those with "ability" to employ said ability to the limit of their capacity.  In fact you cannot compel them to employ their ability at all.  There is a point beyond which all persons will choose to throw up their hands and cease making an effort to produce.  That point is different for every person but it exists in all cases.  If you tax income over $500,000 at 100% then everyone who currently makes more than that will either find a way to shelter that income legally or, if they cannot, when they reach $499,999 in earnings they will stop working and instead choose to sit on a beach and suck down drinks, producing nothing more.

There is only one answer to the problem when it comes to medical care: You must attack cost.

If you do then the price of medical care falls like a stone and nobody needs insurance at all except for catastrophes.  Said insurance will be inexpensive since catastrophes are both reasonably rare and, while expensive, are not ruinously so as they are today.  You can buy hazard insurance on a reasonable home for about $100 a month.  There is no reason actual medical insurance should cost more than this.  But your hazard insurance doesn't cover new carpeting, a pest control contract, a replacement for your refrigerator or a new roof -- those things are routine and expected expenses.  Home Depot runs sales on refrigerators and carpeting all the time; competition keeps everyone honest.  While Frigidaire makes a profit what they can't do is charge you $10,000 for a $1,000 refrigerator because if they try that GE will undercut their price and Frigidaire will go out of business.

Resolving this problem would be difficult were cost not ridiculously inflated by schemes that were defined as felony crimes 100+ years ago.  But the medical system in this nation is full of such schemes -- in fact, they are responsible for the bulk of the cost of medical care -- 80% or more -- in the United States.

There is only one way to address this problem -- which, I remind you, is bankrupting the American government and within just a few more years will lead to a fiscal crisis and likely collapse.

That is to adopt a solution substantially similar to what I have proposed.

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2020-02-15 11:23 by Karl Denninger
in Podcasts , 112 references
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2020-02-15 08:10 by Karl Denninger
in Banking System , 154 references
[Comments enabled]  

I know more than a few people in the millennial cohort who are deeply underwater financially.

If you think that the "CFPB" or whatever claptrap Congress ginned up during and after the 2008 crash are actually there to help you -- you're nuts.  Most of these people were not old enough to get into serious credit card trouble at that time but have become old enough since.

The outright predatory tactics of lenders have not changed a bit.

They run this crap on an automated basis on everyone. Those who are foolish enough to fall for it get ass-rammed.

Hell, they even just tried it on me.

I generally run pretty-much all my "ordinary" household expenses through a credit card. I do it because I get a cash back on it; if I can get a 1% or 1.5% discount on everything I'm going to take it.  If some merchant wants to offer me a 2% or greater discount for cash I'll pay in dead Presidents, but basically nobody does, so **** 'em.  I'm not go to ask -- you either offer or I'll take the discount I know I can already get.

never run a balance.  But over the years I used to charge up a crap ton monthly on (mostly) my Amex account, because when I was running my Internet company I often put entire trade shows on it.  Mid-five-figure monthly spend was not uncommon at all, and Amex knew this.  When I sold the company I got rid of the corporate-paid-for annual fee "high fautin" card of course but do maintain an Amex "cash reward" card.  Why not?

Anyway, another institution (not them) is where I usually run most things through.  Every year they (and everyone else) asks for me to "update" my financial information.  I never respond.  There is no law that says you must.  They could shut the account down due to my insolence but never have -- they like the discount charges from the merchants, of course, so why would they do that?

Point being they have nothing other than my payment and credit history and whatever else they can get out of public records to go on in judging whether I am "good" for a bigger line.

So the last couple of months my spend has been well above average because I'm doing my redoubt thing and in the process I need to equip it, etc.  It's a one-time deal, but it's a fairly substantial expenditure.  No biggie.

One of those issuers just jacked up my line on an unsolicited basis as soon as I ran utilization up near 50% over a single billing cycle.

I don't care as I'll never use it but it's a trap for those who will.

You go out and get a card when you're young, and it probably has a $500 line.  This one's dangerous to your FICO as utilization is very easy to get too close to the line with, although you have no score at all originally.  You don't want to use more than half of the line on a regular basis, in short, which makes for interesting choices.  Ok, so soon you find the line expanded to $1,000, then $2,000.  Now you can run your monthly household expenses on it and use about half the line or less, and your FICO score keeps climbing.  Soon it's in the low to mid 700s.  For most people this is achievable within the first one to two years.

What happens next is that the same issuer suddenly doubles the line again, to say $5,000.

That's a trap; you probably can't pay off $2,500 a month on a revolving, routine basis, but it's very, very tempting to invade that "more than half utilized" space.  If you do it you're going to start paying interest at a crazy rate, especially given today's Fed Funds -- likely at something approaching 20% and always at double-digits.

As soon as you start accruing a balance if you're running your household through it on a revolving basis you're in serious trouble.  To do it once and then pay it down over a couple of months if (for example) your car breaks is one thing.  But if you are running your household bills on it to get the cash back and then add to it a big lump for such an event you are very likely to be screwed because instead of getting paid 1% every month back in discounts you're suddenly paying 2% or more monthly, which is a 3+% instant addition to your spending while you are overcommitted.

The banks know this and don't care.  They're trying to force you into a corner where you will screw up.  Just one late or (worse) missed payment and you instantly get hammered with the default rate on the entire balance, which is frequently 25%+!  Now you're really hosed and your FICO gets hammered too, which means trying to consolidate or refinance out of it becomes impossible as nobody will write that loan.

The only way out of that trap is if you have some assets you can sell and pay it down or off entirely.  Got an extra car or something else expensive you don't need?  Get rid of it immediately and pay the card off.

But if not?

You're ****ed.

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2020-02-14 09:53 by Karl Denninger
in Podcasts , 156 references
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Don't want the politics?  Skip the first 10 minutes....

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