The Market Ticker
Commentary on The Capital Markets- Category [Health Reform]
Logging in or registering will improve your experience here
Main Navigation
Full-Text Search & Archives

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.

Considering sending spam? Read this first.

2019-12-13 07:00 by Karl Denninger
in Health Reform , 193 references
[Comments enabled]  

Go ahead, keep whining about "impeachment"


This is two months of spending (first two numbers) against last year's same two months (last two numbers.)  It is an 8% escalation.  Over the full fiscal year we will spend $1,750 billion, up approximately $200 billion from last year.

This, over the remaining period to 2024, will lead to us attempting to spend $2,380 billion each year on these two programs and increasing by 8% continually on a forward basis.

Nancy Pelosuckmeoff claims she will get "relief" for some people by passing a bill to allow Medicare to "negotiate" on prescription drugs.  May I point out that prescription drugs constitute about five percent of the total annual spending on these two programs last fiscal year, and in the entire market (public and private) it's only about 10% of the total?

This is what Washington DC repeatedly does: Claim to solve a problem -- or materially address it -- when they target just ten percent of whatever problem exists.

Never mind that last year Medicare Part "D" (drugs) were ~80 billion.  Pelosi claims the bill will cut $36 billion a year out of that expense, which depending on how you choose to count the numbers and where they're headed is anywhere between 30-50% of spending.  That's nuts either way -- either the government has been robbed through a degree of racketeering never before been seen in America or you have been but irrespective of which is the case the "savings" will mean exactly nothing to the impact that Medicare and Medicaid are having on the trajectory of the deficit -- and the collapse that they will cause.

I remind you -- by 2024 these two programs in their entirety will attempt to double the Federal Deficit, with an ever-escalating amount thereafter.  This will blow up in our face as a nation and instead of dealing with it head-on using the existing legal authorities in 15 USC Chapter 1, which are sufficient to IMPRISON thousands of health care, insurance and drug executives standing alone, the head **** in the House proposes to try to misdirect you and goad you into cheering on her intentional destruction of this nation by the brigands in the health care industry.

You must refuse that attempt and instead demand that this individual stop the bull**** along with everyone else in the Feral Government or you will, within just a few short years, be faced with even more-stark choices, most of which will involve some form of violence whether by you or against you.

View this entry with comments (opens new window)

2019-11-24 07:00 by Karl Denninger
in Health Reform , 224 references
[Comments enabled]  

Yet another story in the press:

Lee-Ellen Macon had beaten breast cancer once.

So when she went to the doctor this spring with what she thought was a slight thyroid issue, and instead received a stage IV cancer recurrence diagnosis, she was terrified.

"That's the worst cancer you can have," said Macon, 57. "Hardly anybody can recover from that."

Almost as scary was Macon's subsequent discovery: Her out-of-network deductible was $4,000.

It shouldn't take $4,000 to find out that you have cancer, or what stage it is in.  It should cost $400.

In a free market economic system for medical care, where everyone has to post a price and everyone is charged the same amount of money for the same good or service, just like the corner gas station, grocery store and WalMart, that is what it would cost.

The fact of the matter is that there's likely nothing she can do, but if she wants to try, that's up to her.

But it is profoundly evil, to the point that society should contemplate putting people who do this into plastic chippers feet first, to prey on those who are deathly ill by refusing to quote them a price or charging them a different, higher price than the next person who shows up with the same malady but has "better" or "government" coverage.

We recognize in virtually all cases that predatory pricing aimed at those who can't negotiate due to their circumstances (e.g. after a hurricane) is both morally wrong and criminally wrong.

There are libertarian purists who argue against this -- that such laws shouldn't exist because those who prepare should be able to benefit from preparation and that in fact $10 for a bottle of water is better than no water at all.  There's an argument to be made for this in the case of a hurricane where you have days worth of warning, but there is no argument for it when you're flat on your back due to a car wreck that you had no means to forecast nor any way to control, nor were you able to direct where you were taken or comparison shop.  Likewise while you can control in some cases the risk of cancer you cannot control if you actually get cancer.

"Medicare for all" doesn't solve this.  But my short-and-sweet bill found here, or it's longer and more-expansive version, which covers those with no money or "insurance" with a true backstop, does.

Pick one.  Short and simple or the longer and more-expansive.

Either way this lady, and thousands like her every year, no longer will be bankrupted.

She's probably still doomed, when you get down to it -- but at least her family will have something left of their economic situation when the time comes.

View this entry with comments (opens new window)

Gee, someone else figured it out?

As the Democratic presidential candidates argue about “Medicare for All” versus a “public option,” two simple policy changes could slash U.S. health-care costs by 75% while increasing access and improving the quality of care.

These policies have been proven to work by ingenious companies like Whole Foods and innovative governments like the state of Indiana and Singapore. If they were rolled out nationally, the United States would save $2.4 trillion per year across individuals, businesses, and the government.

What was my number?  80% or more.  And that's without screwing a single person.

The first policy—price tags—is a necessary prerequisite for competition and efficiency. Under our current system, it’s nearly impossible for people with health insurance to find out in advance what anything covered by their insurance will end up costing. Patients have no way to comparison shop for procedures covered by insurance, and providers are under little pressure to lower costs.


Price tags also insure that everybody pays the same amount. We currently have a health-care system in which providers charge patients wildly different prices depending on their insurance. That injustice will end if we insist on legally mandated price tags and require that every patient be charged the same price.

It's not "injustice" -- it's too many felonies to list, all of which carry hard prison time for everyone involved.

It's extortion to threaten, whether by implication or statement, that unless you buy health insurance you'll be billed 10x as much for the same thing.  Yet that happens all the time.  It also constitutes an illegal tied sale (forcing you to buy another product or service, in this case health insurance, you don't want or you will be disadvantaged) -- this too is unlawful under anti-trust law.

In addition it implicates 15 USC Chapter 1, which carries a 10 year prison term, in that it is clearly an attempt to restrain trade -- how do you have competition when you can't get a price?

15 USC has been on the books for more than a century.  The medical industry has twice tried to get an exemption through the courts and lost both times.

As a side benefit, we will also see massively lower administrative costs. They are currently extremely high because once a doctor submits a bill to an insurance company, the insurance company works hard to deny or discount the claim. Thus begins a hideously costly and drawn-out negotiation that eventually yields the dollar amount that the doctor will get reimbursed. If you have price tags for every procedure and require that every patient be charged the same price, all of that bickering and chicanery goes away. As does the need for gargantuan bureaucracies to process claims.

This is why the politicians refuse to address this and the cops won't arrest.

We have added roughly 400,000 people a year since the crash to the "health care" sector in employment.  Yet a look at the statistics for doctors, nurses and other direct care-givers shows that doctors have barely moved in number and nurses, while they've increased, have only gone up by a few.

All told roughly ninety percent of the "employment" adds in this sector since the crash in 2008 never provide a single second of care to a single person and this did not start in 2008 either; it's been going on for at least the last two decades.

If you put a stop to the scam nearly all of those people instantly lose their jobs.  We're talking about roughly 15% of the economy that instantaneously evaporates.

Now it won't stay gone for long; with much lower costs the resulting economy progress that will follow will set records for years and those people will be hired to do something else.

But the immediate effect of doing this will be a 15% contraction in GDP and the loss of millions of jobs on an immediate basis; the papers will scream "Depression!" (because from the perspective of a classical economic basis it is) and the political blowback in the short term will be extreme.

The second policy—deductible security—pairs an insurance policy that has an annual deductible with a health savings account (HSA) that the policy’s sponsor funds each year with an amount equal to the annual deductible.

There's no need to do that but its an OK adjunct.  Why not?  Because I've got a better answer to that, although HSAs, as they already exist, are certainly a good thing and can be an effective part of the answer.

Oh, and before you say it won't work?

We know this to be true because while price tags and deductible security were invented in the United States, only one country has had the good sense to roll them out nationwide. By doing so, Singapore is able to deliver universal coverage and the best health outcomes in the world while spending 77% less per capita than the United States and about 60% less per capita than the United Kingdom, Canada, Japan, and other advanced industrial economies.

Note that Canada, Japan and the other economies are all socialist systems in whole or part.

I hope that politicians on both sides of the aisle will get behind these proven solutions. Washington should not be a place where good ideas go to die.

They will not unless the only alternative, as expressed by the people, is a gallows being erected on the National Mall or worse.

I've been tracking this trajectory since the 1990s when I was buying health insurance for my staff at MCSNet.  It was glaringly obvious what was going to happen, and I started raising Hell about it.  Nobody gave a wet crap.  Nobody has since.  Despite serving on the EC of the Florida Libertarian Party not one time did I manage to get that into the party platform nor did I manage to get one candidate to run on such a platform.  In my time before or since exactly zero politicians of either major party have done so.

Matt Gaetz (R-FL-01) lied to my face and that of a room full of Seniors at a town hall meeting here about a year ago, claiming that the Health Industry was exempt from 15 USC.  When challenged with the two USSC decisions that say otherwise he promised to get back to me and never did.  He is a liar and a fraud, just as are the rest of the politicians.

Leverage, my book which was published in 2011, pointed out all of these facts and numbers.

Since then I've published a whole series of articles on Health Reform, many of which remain available.  You can get the reverse-chronology reading list right here.

specific legislative proposal to solve the problem can be found here; it contains a link at the end that goes to a second article that describes how implementation would look.  It resolves all of these scams.  Part of it can be done by Executive Order or simply by starting to prosecute providers, insurers and drug companies under 100+ year old criminal felony law.  The rest needs Congress.

Oh by the way doing this eliminates the entire Federal Deficit and the government runs a surplus.

I'm not kidding -- it really does and it really will; that's the math.

So why won't the politicians take this on?

Simple: If you do it nearly all of those 4 million people employed robbing the public lose their jobs and the stock prices of the firms who have made all their money ripping people off, never mind all the billionaires who have done so in the medical and drug industry lose much or even all of their value.

I remind you that Obama claimed he was going to fix this.  He lied.  Trump had three bullet points on his campaign web page that, in effect, would implement most of this.  I said during the election season that I didn't believe a word of it as it all sounded good but lacked the sort of detailed exposition that indicated he really meant it and had studied it.  All three points disappeared on the night of the election as soon as it was called for him; his recent "proposal" has no teeth in that it carries a trivial $300 fine for non-compliance.  He's a known serial liar when it comes to this issue as is every single GOP member in the House and Senate.  The Democrats, for their part, want to enlarge their control over this part of the economy even more than exists now.  When they can't pay for it, which will occur within the next five years, the government will collapse or if you actually need health care you will be left out in the cold to die

I suppose the Democrats consider that "reasonably safe" in that someone ill enough that they'll expire without their "health care" probably is too sick to be able to mount a revolt, never mind that "one nut at a time", which is exactly how the press will present it to you, just gets themselves either arrested or dead.

Again, from the above:

The immediate effect of doing this will be a 15% contraction in GDP and the loss of millions of jobs on an immediate basis; the papers will scream "Depression!" (because from the perspective of a classical economic basis it is) and the political blowback in the short term will be extreme.

Thus the only way this will happen is if the people of this nation as a whole, not a few "nuts", make clear that not implementing this change is worse.

What's worse than losing your job to a politician?

Only one thing: Losing your head.

Thus the people of this nation must make clear as a whole, not a handful nor a fringe group, that either this policy change is implemented or a literal ejection and replacement of the entire government of this nation by whatever means are necessary, up to and including through the use of force, will occur -- a literal "second act" of 1776.

If the people of this nation will not rise and make that demand as a body politic then it will never happen.  In fact, a number of years ago when I met with Senate staffers to discuss exactly this that was what was communicated to me; they had no intention of doing anything like this from both sides of the aisle and the reason was they knew they'd get voted out of office if they did.

Therefore the only means of obtaining that outcome is for the people of this nation to insist that it happens under penalty of worse than being voted out of office.

You don't have to like logic and where it takes you; I certainly don't like where logic leads in this instance.  But whether I like it or not is immaterial to the facts; it is what it is.

All governments exist only with the consent of the governed.  That is the lesson of 1776 and our Constitution.  This fact is clearly stated, in plain English, in the Declaration of Independence.

Our economy currently has one dollar in five spent on health care and 80%, approximately, of that is stolen through these schemes.

The medical and "health insurance" system in this nation is the largest criminal enterprise and organized racket, extracting more money from more people, than any other in the history of mankind.  It personally costs each and every citizen in this nation, man, woman and child, in excess of $10,000 per year and is expanding at a rate of approximately 8% every year, far beyond economic growth and the ability to pay.

The continued existence of this scam is an existential threat to the United States.

It must be stopped here and now.

Whether it is, or whether we instead all go down the toilet together, is collectively up to you.

View this entry with comments (opens new window)

2019-11-16 09:23 by Karl Denninger
in Health Reform , 122 references
[Comments enabled]  

You'd be forgiven (maybe) if you didn't pay any attention to the Presser that the President gave on health pricing transparency, given that it wasn't impeachment-related.

Breathless CNN didn't cover it.  Neither did Fox with any sort of density.  CSPAN did, however.  I (mostly) listened to it in my car and had read the published proposal a bit earlier.

You'd be forgiven for thinking that there's a grenade in there that will definitely be stuffed up your ass with the pin pulled.  After all, the health care ETF was up two percent plus yesterday into the maw of this announcement, the exact opposite of what would happen if prices are going to actually come down.

So let's talk about it a bit.

The rules changewhich is sure to run into an immediate lawsuit or 50 by the industry, would allegedly do the following things:

  • Finalize a rule that has been in the pipe for roughly a year now that will require hospitals to show their negotiated prices between insurers and themselves to patients starting in 2021.  What is not clear is whether you'll be able to see all negotiated prices (that is, you'll know that your insurance company pays X, Medicare pays Y, Medicaid pays Z, and the other insurance companies pay A, B, C, D and E) or whether you'll have to know both your insurance carrier and plan code to get anything.  Further, it's not at all clear whether you (or anyone else) will be able to grab the entire bag of data and sift it.  Only a "yes" to both of those will allow you to actually shop.

  • Second, add a rule that will require insurance companies to show you "expected" out of pocket costs before you have a procedure done.  This is a new one and is subject to 60 days of public comment; it has no announced implementation date as of yet.  Most insurance companies will give you this already if you ask (and you damn well should) but the problem with it is that "expected" doesn't mean "binding", even in a "binding estimate" (e.g. subject to 10% variance, etc) format.

The truth of any law is always in the punishment section.  That is, a "law" that has no "or else" is not a law at all; it is a suggestion no matter whether or not it is in the Statute Books.  For a prime example of this look at the Federal Reserve Act which states that the Federal Reserve's mandate is for stable prices.  Well, stable means unchanging and yet Fed Chair after Fed Chair dutifully trots up to the dais and gives testimony to Congress in which he or she states their intent to violate said law, and touts their record in doing so -- that is, they both tout and proclaim their intent to target 2% inflation and have a near-perfect record of actually exceeding 2% over the longer term (the actual record says it's about 3% on a long-term basis, and that's if you believe the so-called CPI!)

How many of said Fed Chairs have gone to prison?  Zero.  Why?  Because there is no or else in the Statute and thus nobody has to enforce it -- and nobody does.  After all, making the stock market go up is more important than following the law, right?

Well, right up until you get a grenade stuffed down your throat it is.

What's the penalty here?  $300/day.  Garbage, in other words, and that assumes anyone actually brings a case to collect it, which for $300/day isn't worth it.  How many hospitals would simply add the $109,000 a year in "fines" to your bill on a ratable basis and shove that up your ass instead of complying?

Probably all of them.

Note also what was missing: No threat to enforce 15 USC Chapter 1, which already exists, has twice been challenged to the Supreme Court for health-care firms and both times the health and insurance industry lost.  In other words we already know that 15 USC Chapter 1, which provides for one hundred million dollar fines for corporations per instance and ten years in prison for all persons involved, applies to this conduct.

Now enforcing that not only requires no comment period it almost-certainly couldn't be successfully challenged legally either since the precedent has already been set all the way to the Supreme Court and, while I certainly expect the medical industry would try to appeal all the way up (after all, the alternative is to quit screwing you up the ass and the related firm's stock prices would collapse) they'd almost-certainly lose since to do otherwise the Supremes would have to overturn not just one but two prior precedents.  That's unlikely enough to be in the realm of fantasy-land nonsense.

So why did Trump do this?  For the same reason he listed three almost-identical items on his 2016 campaign web page, all three of which disappeared on the night of the election: He is a lying piece of **** and is trying to use this for the 2020 election campaign

Proof I'm right?  The Health Care ETF was up over 2% yesterday right into the maw of, and during this announcement.

There is a fix for all of this and it's right here.  Note that exactly zero of that was found in these "proposals" -- not even the you must post a price and everyone pays the same price rule, which incidentally applies to every single item at WalMart and every gallon of gas at the corner station.  Gee, it's so complicated -- NOT!

View this entry with comments (opens new window)

2019-07-01 07:00 by Karl Denninger
in Health Reform , 291 references
[Comments enabled]  

Watch this one folks.

$400 vials of insulin.

$25 for the very same vial in Canada.

CNN points out that the manufacturers, of which there are three, intentionally do not enter competing lines of business and thus there is no competition between providers.

On purpose.

Intentionally divvying up markets like this is a felony.  It has been a felony since the late 1800s -- more than 100 years.  The Sherman and Clayton acts, known as 15 USC Chapter 1, declare such practices or any attempt to engage in them federal criminal offenses carrying 10 years in prison for each person so-involved.

The number of criminal prosecutions in the medical and drug sector over these obvious, blatant criminal acts number zero.

The media calls this "greedy" as do "activists."

They do not call it what it is under more than 100 year old law: Felonious.

They do not ask: Where are the ******ned handcuffs and why aren't the executives in prison?

They do not call for prison terms -- right now.

They ignore, as do the activists, the clear statement of law found in 15 USC Chapter 1.

There is no "hard" problem here to solve.

You need only jail a few executives and all of this bullcrap will stop across the medical industry instantly.


If the government will not do its job then why do you sit back and whine and run "human interest" stories instead of storming the Halls of Congress and State AG offices, along with demanding that both the FBI and State Cops raid these firms and arrest all of the executives inside, shuttering the buildings and chaining the doors closed until this blatant and obvious lawless behavior stops?

View this entry with comments (opens new window)