Cut The Crap Trump And Congress: HealthCare
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2017-03-14 12:40 by Karl Denninger
in Health Reform , 2539 references Ignore this thread
Cut The Crap Trump And Congress: HealthCare*
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Where is the discussion of facts when it comes to health care?

Why do we keep talking about the cost of "health insurance" when that's a symptom and not the problem?

Why do we keep talking about "subsidies" (tax credits, etc)?

If you're coughing incessantly because you have lung cancer do you simply take a cough suppressant and call that a "fix" when you stop coughing for a while?

That entire line of discussion, which is the only discussion being held politically and in the news, is a fraud.

Why?

Two reasons: First, "health insurance" is not insurance to the extent it covers an event that is either certain to happen or has already happened. Insurance is a thing you buy to cover a possible future event you cannot pay for yourself.  It is less expensive than the event will be only because the probability is less than 1.0 -- that is, the event is unlikely.  If the event is either certain or worse, has already happened then the probability is 1.0 and the cost of "insurance" against such an event is always more than simply paying for it in cash because the insurance company has costs it must cover or it will go out of business.

Let me repeat that just in case you missed it: The cost of insuring against a bad event is directly and mathematically determinable by the cost and probability of said event.

Second, due to the above mathematical fact if you wish to decrease the amount "insurance" costs there is only one way to do it: You must decrease the cost of the event, the probability of the event or both.

This is arithmetic, not politics and anyone arguing otherwise needs to be indicted, tried, convicted and imprisoned for their intentional act of fraud upon the public because that's exactly what they're doing -- defrauding you.

I don't care if they're pundits, media personalities, Congresspeople or the President -- and I remind you that The President is well aware of how insurance actually works since he's been a Real Estate developer and operator for decades.

Now let's address the only two means by which we can lower health insurance costs.  And lower them we can -- by 90% or so, and quickly too -- in fact, within months.

First, insurance must be actual insurance.  In other words it must only cover events for which p < 1.0.  By definition those are events that are neither certain to happen (e.g. routine, every-day visits to a doctor) or have already happened (e.g. pre-existing conditions.)

While you might be able to buy fire insurance on your house if it's on fire (or you are in the process of setting it on fire!) the cost of that insurance will always be more than the fire damage to said house because the probability is 1.0 and the company has to cover its cost and make a profit or it goes out of business.  It is therefore always cheaper to simply pay cash for the fire damage than to buy said "insurance" and this is true irrespective of what you're "insuring" -- including health.

Again, this is math, not politics.

Second, we must address both "p" (probability) and "c" (COST.)

We must address "p" (probability) because it will directly and grossly reduce the cost of insurance since it is a multiplier to cost.  Reducing "p" by 10% directly reduces cost of insurance by 10% all other things being equal.

We must address "c" (cost) because that not only reduces the cost of insurance (but on a smaller basis than "p" since it's multiplied by the fraction of risk) for the person who has already had the bad thing happen to them medically it enables them to pay directly for the treatment required. I remind you that paying directly is always going to be cheaper than running that same payment through an "insurance" company (typically by about 10-20%) because said company has costs that have to be covered.

Let's take "p" on first.  An utterly enormous amount of health expense occurs because people choose to be overweight or obese.  As noted in a previous Ticker the American Diabetes Association claims $250 billion a year is spent by Medicare alone due to both the disease and its effects.  Best guess is that another $150 billion is spent by Medicaid (which they don't specify.)  This is for one disease and essentially all of that money doesn't have to be spent.  It is spent because people choose to consume foods that promote and exacerbate the condition rather than reduce or even eliminate its effects.  The cost of changing what you put in the pie hole, medically, is of course zero.  Therefore for each person who is diabetic (Type II) and makes said lifestyle change resulting in either the control or elimination of the harm to their body from same we eliminate all of the health spending by said person on said disorder!

There are myriad other diseases and disorders associated with being obese and overweight.  Hip and knee damage, eventually leading to (expensive) replacement surgeries, for one.  Heart attacks and strokes (many caused by high blood pressure that, again, is often a result of being overweight) for another.  These are all avoidable costs and if we wish to address the cost of health care reducing "p", the probability of bad events, is a key item.

It is absolutely true that personal choice is a huge factor here and the government does not have the right to tell you how or what to eat.  However, you do not have the right to demand that someone other than yourself pay for the consequences of your personal decisions.

It is therefore perfectly reasonable to put in place a protocol that says if you are overweight or obese and diabetic then the lifestyle change in terms of what you put in the pie hole that has a near-100% record of reducing or eliminating your need for drugs and medical procedures and has a cost of zero will be the only option offered under said publicly-funded programs until and unless you prove, by individually-shown test, that it doesn't work in the case of your particular metabolic makeup.

Doing this for one disease alone would cut roughly $400 billion off the federal budget this year and every year thereafter and would cost the patient exactly zero on top of it.

Can we extend this demand to private health care policies by force?  No, but we can certainly allow companies to multiply their pricing by the change in "p" that not following such a lifestyle, if you're overweight or obese, comes with.  Since this one disease is such a huge component of said spending my best guess is that the surcharge for refusal would likely be 25% or more and if you're already diabetic then it can (and should) be an immediate disqualifier for any coverage of any consequential event whatsoever unless you prove, by individual test, that the lifestyle change outlined above doesn't result in control of your condition.

Second, we must break all the monopolies in the medical system.  There are in fact simple ways to do this, requiring no new laws, which I've outlined before going way back in time.

If you force price transparency by treating any health provider who refuses to do so, or who tries to bill on a discriminatory basis as committing a criminal act under existing consumer protection and anti-trust laws (at both the State and Federal levels) you will instantly and permanently remove all so-called "network" games, break the monopoly pricing games played by the health industry and as a result competition will cause prices to fall like a stone.

It's worthless to even attempt to argue that this "can't" or "won't" work because we know it does.  The Surgery Center of Oklahoma does exactly this right here, right now, today and their pricing with the monopolist-laced chain of supplies for drugs and surgical devices still undercuts "traditional" hospital prices by 80%.  For example a cardiac bypass is $10,700 -- cash, all-in, one-price and if there's a complication taking care of that is included.

Can you come up with $10 large to save your life if you need it?  Almost-certainly, even if you're poor.  Yes, it would be a lot of money for someone without material means, but remember -- we're talking about a price that's anywhere from 1/10th to 1/5th of what that same procedure costs in a "traditional" hospital setting and you're choosing between that and death.

Don't tell me it can't be done and wouldn't result in these sorts of cost reductions because it is being done right now, right here, today and has resulted in these cost reductions -- even with a huge part of the medical scamjob monopolist games still embedded in their pricing because they can't get away from the drug monster in their ORs at present.  In other words their pricing is high (probably by 20% or so) compared to what it would be if we stopped all of the monopolist games.

Here's the bottom line folks -- if you think "health insurance" costs too much you're being misled.  The problem isn't health insurance it's the cost of health care.  The solution to the problem is to first require firms to offer true insurance (that is, does not cover events where p = 1.0) then require all providers to post prices and charge everyone the same amount.

Next, using existing law you then indict and prosecute all violations of 15 USC Ch 1; the health insurance and related industries already tried to claim exemption in a case that went to the Supreme Court in 1979 and they lost.  It is therefore simply a matter of political willpower to get out the handcuffs and start issuing indictments.  That will further collapse prices since now providers will be forced to compete for business.

To put numbers on this we're talking about "health insurance" for catastrophic events being something that costs the average person well under $100 a month and for virtually everyone they would pay only a few hundred dollars more a year in direct, uninsured cost.

With the cost of care collapsed to 1/5th of what it is now for the truly indigent we can certainly afford to help -- but for nearly everyone we won't need to, because even those of modest means can afford to pay cash at a price 1/5th of what is charged in the United States today.

The obvious question is "Why won't Donald Trump or Congress take this position, since it's clear on the math that it will solve the problem permanently and at the same time nearly eliminate both the Federal budget deficit and all State and Private Pension budget problems at the same time?"

The answer is quite simple: Doing so will cause an immediate and deep recession as the health industry collapses from ~19% of domestic output back to its historical level of about 3-4%.

Said recession won't last very long because that money will get redeployed in other areas of the economy but until it does the impact on GDP will be severe, immediate and deep -- and both Congress and Trump know it.

Oh, and it will put a whole bunch of lobbyists out of business too.

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User Info Cut The Crap Trump And Congress: HealthCare in forum [Market-Ticker] Item is Pinned
Max_planck
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Southern Arizona
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Quote:
(will) nearly eliminate both the Federal budget deficit and all State and Private Pension budget problems at the same time?


Can you elaborate on how Private Pensions will be helped? Is it those that include retiree health benefits (not many anymore)? Or is it yield improvement from economic growth (after the health industry-caused recession)?
Tickerguy
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Both; post-realignment America will be the place to do business as the cost of business operation will drop materially -- 20% or more.

(Why 20% you ask? Because it's NOT just health insurance for employees -- it's also liability insurance costs that companies have to cover when accidents causing injury occur, all of which get run through the scam-riven medical system. The impact on automobile and truck insurance rates alone would be enormous -- bodily injury liability premiums would almost-certainly drop by more than half.)

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Winding it down.

Wtf_247
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The repeated focus is entirely on insurance costs because the underlying prices have been jacked up so incredibly high that is very easy to scare people into thinking that without any insurance at all I'll be bankrupt for even the most minor hospitalization.

It is entirely the wrong focus, but you could easily see how and other industries the same thing can and will happen if you allow the underlying cause to be jacked up through collusion. Imagine how much auto insurance would cost if all of the repair shops got together and decided that $2,000-$5,000 an hour for repair technicians was a fair price. Your insurance would basically have to cover almost a new car because even minor repairs it take 6 or 7 hours would likely exceed the value of any car even a few years old. Simply add in some government regulation to make it incredibly hard for new competitors to enter into the market and you have the same problem as we do with health care now.
Themortgagedude
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saint louis
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The whole thing is ****ed up. The Socialist Party of Obama should have been pushing for single payer. They caved to the medical cartel. The Republican Party should be pushing for law and order and transparent pricing. They caved to the medical cartel.

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I think its time we ask ourselves if we still know the freedoms that our founding fathers intended for us. Ronald Reagan 1964
Ktrosper
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TG wrote..
if you think "health insurance" costs too much you're being misled.
They've successfully got EVERYONE fixated on the insurance side of this equation once again.. It's full on retard. Cui Bono? Well, it leaves the $4 Trillion HC industries financial******scheme in place for a little while longer.

It WILL end. Question is, will it be violent, painful and uncontrolled or will it be painful and controlled.

Thanks for the great ticker. Glad you pinned it.

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The unexamined life is not worth living.-Socrates
The only stable state is the one in which all men are equal before the law.-Aristotle
Liberty exists now in the spaces government has not yet chosen to occupy.-Doc Zero
I anticipate that 10 Dallas Cowboys Cheerleaders will blow me this evening.-K.D
Vernonb
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East of Sheol
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The big question I have is when this all blows up and the people figure out how they have been raped since the 60s how many doctors, lawyers, hospital administrators, healthcare stock holders, insurance executives and insurance salesmen will find themselves at the end of a rope of mob justice?

How many of these "healthcare" dens of thieves will find themselves burnt to the ground?

These people have been given ample warning and time to change their ways. They continue in this manner at their own risk. Instead they have decided to double down on the corruption and thievery. These people shall become the Tories of old. The colonial revolutionists knew their own internal enemy.

I suppose one can dream about the wrath of the virtuous.

Nothing but empty bellies and the lack of I-crap devices seems to motivate the American people as a whole now. Too many are content to be chattle and/or parasites feeding off the resources of their fellow man.


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"Mass intelligence does not mean intelligent masses."
Wis/min
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Politicians have one goal maybe two.

Get re elected.

Push the problem to the future.

That works until it doesn't.

What's worse is that the pols with a few brains and moderate math skills know exactly what they are doing.

Stop thinking they care about you. THEY DON'T

I had hoped Trump would be better.
Azengrcat
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Price transparency should be automatic, point me to a hospital that does not receive federal funds or state funds. If they can't provide public pricing then no more public funds.
Tickerguy
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It has to be not only public pricing but also level billing -- everyone is billed and pays the same amount.

Now how you pay is up to you. If you have insurance, how much that company pays is between you and them -- NOT them and the hospital or other provider.

To do it ANY OTHER WAY is flat-out vertical integration and to the extent it lessens competition, which I remind you INCLUDES attempting to force you to buy the second product or service (insurance) lest you be treated in a disadvantaged manner is A FELONY is under 100+ year old law.

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Winding it down.
Azengrcat
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Thank you for the clarification to my post, if non-level billing is revealed i.e. Illegal activity, those hospitals/medical practices shall not receive federal or state funds for 5 years. The CEOs would change the pricing structure so fast your head would spin.
Mabman
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toronto
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My friend in the US just posted this on her facebook page:

Stephanie Fowler&#8206; to DonJoy
March 1 at 2:44am
Hi,
Could someone explain to me why at my orthopedic surgeon's office I received one of your leg braces for a torn ACL and had to sign a release stating I was aware this brace cost $974 and the same one is on Amazon for less than $200.
An explanation would be greatly appreciated as I am responsible for the $974 since I have not met my deductible.
Aztrader
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Scottsdale, AZ
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Aztrader
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Scottsdale, AZ
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Thinking about the $10,000 number and it's almost what I pay per year in health premiums. That math doesn't lie.............
Goforbroke
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Drain the Swamp!
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I don't watch TV much, but my goodness. Every other ad is a drug ad. With some sexy name. Pretty soon they're going to run out of possible letter combinations.

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Our deepest fear is not that we are inadequate. Our deepest fear is that we are powerful beyond measure. It is our Light, and not our Darkness, that most frightens us. -- Marianne Williamson
Tritumi
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tokyo
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A ticker so clear and precise that it is right between the eyes.

But here in Japan, you know, we have a single payer system.
Tickerguy
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Which a non-citizen can't use for "free", and you can bet they don't sell to foreigners at a loss.

Capitalism always beats socialism because it adds the element of beating your competitor over the head with a stick in an attempt to steal all his customers by being better, faster, cheaper -- or all three.

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Winding it down.

Tritumi
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tokyo
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I would amend your comment only to note that everyone living in Japan after a short time is legally obligated to participate in the system, whether citizen or not. Cost is relative to income, with a co-pay of 30%, which one can hedge with private insurance. One can also insure privately against specific illness, such as cancer. A couple of years ago, an additional tax for long term care was added.

Nothing is free and neither should it be.

Somewhat off topic, but perhaps reinforcing your better faster cheaper point:
Korea's third AI-based oncology center to open next month
http://www.koreatimes.co.kr/www/tech/201....
IBM Watson and an LK tech combine.
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