A Clear Illustration Of The ACTUAL PROBLEM
The Market Ticker - Commentary on The Capital Markets
2017-05-05 07:00 by Karl Denninger
in Health Reform , 921 references Ignore this thread
A Clear Illustration Of The ACTUAL PROBLEM
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Sometimes the mainslime media manages to write a story that actually illustrates an issue, if you have an IQ greater than your shoe size.

This is one of those times.

John S. Williams, an attorney in New Orleans whose multiple sclerosis medication costs $70,000 a year, buys insurance through the Affordable Care Act’s marketplace. Without protections for pre-existing conditions he fears he would have to close his law practice and find a job with that offers a group insurance plan.

“We always hear about job growth and business creation — being able to have affordable health care drives that,” Williams said. “I have tremendous satisfaction with owning a business, but I know that if I can’t get coverage, I would be forced to get a different job. I can’t not have coverage for my multiple sclerosis.”

So let's analyze this man's statements.

1. He has a chronic, serious condition.

2. The current cost of controlling (not "curing") this man's condition is $70,000 a year plus physician monitoring.

What he currently does is steal from other people in order to pay the $70,000.  If he is denied the ability to do this through subterfuge as he currently does he will do it through subterfuge with an employer instead.

Let's be clear: Applying for work at a place while not disclosing that you have a condition that costs $70,000 a year to manage and which you expect the employer to pay via their health insurance is theft.  You are not only stealing from the employer you apply with (who is prohibited by law from refusing to hire you if he detects it beforehand) you are also stealing from every other employee who will see their wages damaged if you are hired by the expense you impose through your act of fraud. It happens to be legally-sanctioned and in fact protected theft because employers are barred by law from discriminating on the basis of your health status whether they figure it out before or after hiring you, and since this man is an attorney I assume if he detects what he believes is such discrimination he will sue.

But the fact of the matter is that there is only one way to characterize intentionally concealing the presence of a nasty and expensive health condition from an employer so as to con your way onto their "group" health plan and steal money from said company to fund your condition.  The words for it are theft and fraud.

So how can we resolve his problem?  Further enabling and supporting theft and fraud is not the answer.  In fact anyone who does so is rightfully considered a mobster and a racketeer, and thus deserves to be prosecuted and, if caught in the act, well....

There is only one answer: Remove the monopolist protections that make this man's treatment so expensive.  In other words instead of $70,000 that treatment will cost anywhere from a few hundred to a few thousand dollars a year -- a price he can pay without scamming anyone.

Let me point out something you have probably not thought about: If we took all of the R&D spending by the top 10 pharmaceutical companies and added it up we'd get about $70 billion.

Last year the Federal Government spent $1,400 billion on Medicare and Medicaid alone, with over $300 billion of that on drugs. 

We do we allow this?

We could spend the $70 billion publicly and pay nearly zero for everything that R&D produced.  It would amount to five percent of Medicare and Medicaid spending and would cut the cost of Medicare and Medicaid by more than three times that amount.  Further, the private spend on such drugs would fall by 90% or more too and now this guy's drug would be cheap.

Look, I have no problem with capitalism; in fact I live on it.

But what we have isn't capitalism.  It's monopoly, it's fraud, it's theft and it's a ******ned scam that needs to stop with the people involved in protecting and promoting going to prison.  Those involved in this in a commercial fashion must have their businesses legally burnt to the ground through lawsuits and indictments and the ashes used as chrism so the example set by them is clear to all.

Those protecting this scam in Congress and the White House, Mr. TRUMP, had ******n well better cut that **** out right now or it is going to destroy the federal budget.

That's not politics, it's math.

And no, it doesn't stop with pharmaceuticals.  In fact the worst offenders are found in hospitals and diagnostic businesses!  $3,000 for an MRI that you can buy for $150 cash in Japan?  Cardiac bypass surgery that's $100,000 in a hospital, $10,700 at the Surgery Center of Oklahoma or $2,000 in India -- with the latter two having lower complication rates than the first!

Folks, we're out of time and we're way past the point of tolerating the sort of bull**** that the AP ran without a single critical word toward that quoted gentleman when it comes to the root of the issue: COST.

Technological innovation reduces cost everywhere when a free market and competitive pressure exists.  When it fails to do so that is prima facie evidence that conduct is taking place that is not only inappropriate it's a crime under 100+ year old law.

We either stop this crap -- now -- or it consumes our nation.

That's the beginning and end of it.

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User Info A Clear Illustration Of The ACTUAL PROBLEM in forum [Market-Ticker]
Flappingeagle
Posts: 2582
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Quote:
costs $70,000


With modern manufacturing being what it is, I have a huge problem believing that a year's supply of any of the 99.9% of the drugs used in America can cost more than $100 to make and deliver to the pharmacy!

To go even further, since a lot of drugs are prescribed in the same quantities (i.e. here's a month's supply of X) the manufacturers could pre-package them in those quantities so that the pharmacists (really lower paid techs) could just hand you the bottle.

When I gave across America all is see is scam.

Flap

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Here are my predictions for everyone to see:
S&P 500 at 320, DOW at 2200, Gold $300/oz, and Corn $2/bu.
No sign that housing, equities, or farmland are in a bubble- Yellen 11/14/13
Trying to leave the Rat Race to the rats...
Porter
Posts: 38
Incept: 2011-03-29

Elkridge, Maryland
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I don't see in the article where it says he would use subterfuge on his new employer to get coverage. I get the price of $70K is BS to begin with and any service will cost more when accessed through someone else (no one works for free). I also know that having him in the "pool" will diffuse his costs on everyone else. I know a woman at work with MS and there is no hiding it from any physical assessment of simply walking in for an interview. At $70k a year I doubt he has just been diagnosed such that it could even be hidden. Why would he hide it at all if he is protected by law? What am I misinterpreting?
Tickerguy
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Quote:
Why would he hide it at all if he is protected by law? What am I misinterpreting?

That he's STEALING from everyone else currently in the company where he applies.

Do you think THEY get to approve his employment? Of course not. So yes, he's practicing subterfuge -- upon everyone else in the place!

The EMPLOYER is legally prohibited from considering his "disability" in regard to making the employment decision. In fact they can't ASK in ANY context beyond whether it impacts his ability to perform the job he applies for. As a former employer I know good and ******n well how this works AND EACH AND EVERY TIME SOMEONE COMES IN AND APPLIES FOR A JOB IN THIS SORT OF SITUATION THEY ARE STEALING AND THE MOST-SERIOUS VICTIMS OF THE THEFT ARE THE EXISTING STAFF, ALL OF WHOM GET ****ED IN THE ASS IN THE FORM OF LOWER SALARY AND WAGE INCREASES FOREVERMORE AS LONG AS THAT ****FACE IS ON THE PAYROLL -- AND THERE IS NOT A ******N THING THAT THE EMPLOYER CAN LEGALLY DO ABOUT IT!

YOU WANT TO KNOW WHY NOBODY HAS MADE ANY ****ING PROGRESS IN TERMS OF MEDIAN HOUSEHOLD INCOME IN THIS NATION IN THE LAST 20 YEARS?

YOU WANT TO KNOW WHY I WILL NOT SET UP ANOTHER COMPANY AND HIRE PEOPLE, HAVING SEEN WHAT THIS DOES FIRST HAND FROM THE "BOSS" SIDE OF THE DESK?

THAT IS WHY.

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Winding it down.

Goforbroke
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smiley

smiley

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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

Vernonb
Posts: 1775
Incept: 2009-06-03

East of Sheol
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Quote:
With modern manufacturing being what it is, I have a huge problem believing that a year's supply of any of the 99.9% of the drugs used in America can cost more than $100 to make and deliver to the pharmacy!

Flaps I used to be in that industry. Even when we were making capsules and tablets by hand those costs were less than $0.12 per capsule for small batches (< 10000) in the early 1990s. This included all capsule components, manufacturing supplies, and labor. Its usually a pretty fast process.

The only question is the cost of anything proprietary in chemical or a release system in the manufacture but let me assure you even that is not what is causing these outrageous costs nor is it the cost of R&D or medical trial testing.

It is greed and monopoly entrenchment at the final product pricing that makes CEOs and shareholders rich by corrupt business practices. Anyone that owns pharma or healthcare stocks in these companies deserves the hand of justice as much as the executives.


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"Mass intelligence does not mean intelligent masses."
Max_planck
Posts: 11
Incept: 2017-01-09

Southern Arizona
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A plug from James Howard Kunstler this AM:
Quote:
This is almost entirely due to the hocus-pocus of pricing for services. For an excellent dissection of all this, I urge you to read Karl Denningers comprehensive manifesto, How To Permanently Fix Health Care For All, which he posted one month ago. You have to wonder whether anybody in congress happened to read this, because the debate has been devoid of any of the crucial points that it addresses.

The way it works now, the so-called providers (doctors, hospitals) refuse to post the cost of any service, and then charge whatever they feel they can extract, subject to an abstruse and dishonest ceremonial negotiation with the insurance company. The result: hospital and insurance executives get paid multi-million dollar salaries, doctors get to drive fine German cars, and the patient gets financially ass*****d, kicked to the curb, and eventually stuffed into the bankruptcy courts.


http://kunstler.com/cluster****-nation/p....

Tickergroupie
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WHY is this SO difficult to understand?!? smh.....
Tickerguy
Posts: 148678
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Quote:
WHY is this SO difficult to understand?!? smh.....

It is not difficult to understand.

What is outrageous is that someone who pops up with an ADMISSION that they are STEALING today and worse, intend to steal and defraud others in the future isn't met with an immediate and justified response instead of "oh, yeah, we have to find a way to ENABLE your theft!"

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Winding it down.
Porter
Posts: 38
Incept: 2011-03-29

Elkridge, Maryland
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Karl,
I wasn't trying to get you angry or make you think I don't get it. I know it is open theft and there is nothing an employer can do. My interpretation of "subterfuge" was that this guy was going to actually walk in for a job and deny he had an illness (openly lie). While the law effectively does that or lets that occur, again my point was that I thought there was something I missed, that a lawyer was going to personally deny his issues. Sorry.
Tickerguy
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He doesn't have to "deny" them because the employer is prohibited BY LAW from even ASKING beyond an inquiry that relates to his ability to do the job. The employer is LEGALLY COMPELLED to ASSIST this cocksucking ****face in STEALING from every single other person on the payroll at that company and he has the balls to ADMIT that this is exactly what he intends to do.

I'm well-aware of this because even in the 1990s this **** was part of the mix that I as a CEO had to deal with -- at a time when the cost someone like this could impose on everyone else in the building was FAR LESS THAN HALF of what it is now.

THAT is the problem.

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Winding it down.

Handyone55
Posts: 113
Incept: 2010-07-06

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Spot on article Mr. Denninger. I work in a company that WAS temp to perm. The way it USED to work is you temped for a year then a decision was made to hire you or lay you off. Sounds brutal, but this was clearly explained going in and the job has good pay and benefits. In my depressed area, people were standing in line to apply.

We had a temp who continually whined about his back and was living on Tylenol out of the first aid cabinet. The guy was a whiner in all other respects as well, with a lot of absenteeism. Somehow, this temp convinced management to hire him full time. The instant he was hired full time, his back went out and required surgery and 6 weeks off. Guess the stress of full time employment popped a vertebrae out of line. Multiply this times all the slackers who are better at conning management than actually showing up and working.

Now, my employer has changed the business model. They still hire temps, but, they are told up front that they are very unlikely to be hired full time. Healthcare is provided by the temp agency. There is no way in Hades that I would ever hire an employee in the USA.
Flappingeagle
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Quote:
There is no way in Hades that I would ever hire an employee in the USA.


There we see reason number one as to why I went for a Ph.D. and academia instead of taking over my father's business. I could clearly see the hassle involved in trying to manage employees.

There were other reasons but employees were #1.

Flap

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Here are my predictions for everyone to see:
S&P 500 at 320, DOW at 2200, Gold $300/oz, and Corn $2/bu.
No sign that housing, equities, or farmland are in a bubble- Yellen 11/14/13
Trying to leave the Rat Race to the rats...
Bagbalm
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Just North of Detroit
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I had a discussion about this with a person recently.
They simply could not admit the difference between offering equal opportunity and guaranteeing equal outcomes.
After three rounds of trying to rephrase it so they could understand I can to the conclusion they really understood it, but would never admit to knowing the difference, because their job and political identity depended on not understanding it.
Trinityalpsgal
Posts: 34
Incept: 2017-03-30

Weaverville, CA
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@ Max: Thanks for the Kunstler heads-up. His referral to KD's Permanent Healthcare for All post is great news.

Karl, your efforts matter. Your messaging gets more focused and refined each time you write. Thank you for today's post (and all of the others).

Do you think that Hugh Hewitt might be a good prospect for outreach?

Any other "influencer" types we could pitch?

David Stockman?

Jimmy Kimmel?

Samantha Bee?

Tulsi Gabbard?

Tickerguy
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I have no idea. My repeated attempts to reach the so-called "influencers" have not been effective.

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Winding it down.
Psdrone
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Karl - I am in complete agreement with your anger and frustration over the scam that we call health care in the US. One question re your dire predictions about the level of US Govt. spending on Medicare, Medicaid and Federal Employee health care: since those programs pay claims at low or even penurious (Medicaid) rates, how will stopping the "retail" pricing illegalities reduce the level of government spending on these programs? In order to reduce the overall spending it seems to me we need to ration Medicare ($ per person per year) and stop paying for nursing home/assisted living/ hospice care under Medicaid - another white collar scam perpetrated by lawyers. Also need to stop paying for Kidney Dialysis even though the sympathy by government is understandable. All of these Medicaid payments should be borne by the recipient (or their family) at reasonable rates.
Tickerguy
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Quote:
One question re your dire predictions about the level of US Govt. spending on Medicare, Medicaid and Federal Employee health care: since those programs pay claims at low or even penurious (Medicaid) rates

That's a common lie that many people believe.

But it is, in fact, a lie.

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Winding it down.
Trinityalpsgal
Posts: 34
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Weaverville, CA
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I will make a commitment to pitching those influencers mentioned above.

Am in the process of finalizing a document to be used for introducing you and your plan to others. My thanks to several of your loyal readers who stepped forward to help; they have contributed to the document in a meaningful way.

RE: the healthcare victory tour: It will be interesting to see how real people interpret the House/Trumpcare plan and how they will respond. Surely their homeward-bound Congressmen and women will get in on some juicy feedback. The MSM is whipped into a frenzy over it all. Let the debate rise to great, super grate great, really greatly great heights.

The emerging dynamics of this are an opportunity for you Karl.

Why? Because the energy it takes to prop up the on-going fraud is consuming everyone and everything in its path. The effort to sell the unsellable is peaking.

The House did us a favor by offering up a pile of crap and then celebrating about it. Their action will produce the frustration and anger we need to push even more people over the edge. Folks from various camps are now forced to see more reality: Obamacare and Trumpcare make EMPTY PROMISES and are both failures because neither one really solves their problems - including the cost of their premiums and their deductibles.

And WHY is the cost of premiums and deductibles so high? Because the real problem is that the cost/price of care is too high. It all starts there.

And as Kunstler pointed out in todays post, NO ONE IS TALKING ABOUT THE COST OF CARE. Except for one person that isKarl, your opening is near.
Azengrcat
Posts: 403
Incept: 2010-05-31

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My employer is handing out VRIFs and early retirement packages like crazy. They'd rather have a bunch of millennial f-ing up the place (myself included) than be on the hook for hips, insulin, bypasses, etc.

Once off the company plan, they get on the government plan where the conditions get worse and more costly. Fun system we have!
Smacktle
Posts: 1806
Incept: 2009-01-20

Texas
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Thank GOD Karl is going to save the world and I won't have to do anything about it./ sarc off

Crawling back into my bunker to play with my bobbleheads now.

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The faults of the burglar are the qualities of the financier.
- George Bernard Shaw
Orionrising
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Incept: 2017-01-26

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Mark Styne was guest host on rush today he was at least talking about it being a cost problem, got much closer then most to Karls understanding, though he was just complaining about the pricing structure and how insurance worked, but did not have the anti trust angle. Did bring up how it was cheaper to fly to Bermuda etc to get treatment.
Porter
Posts: 38
Incept: 2011-03-29

Elkridge, Maryland
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50% increase. Glorious.
I have tried multiple times to get this issue with links to this site going on WBAL radio in Baltimore. Ron Smith would have been talking about this. But after 9 attempts, they won't take my call.

https://www.washingtonpost.com/news/wonk....
Goforbroke
Posts: 6951
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Quote:
Jimmy Kimmel?

Fat ****ing chance.

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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
Malaclypse
Posts: 8
Incept: 2016-05-07

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Exactly why I dropped out of the system. CareFirst wanted 37% more from me this year than last. Last year they wanted 13% more than they did in Dec 2015, which was 10% more than they wanted in Oct 2015 (billed retroactively for all of 2015 in November of course). I ate that one as I wouldn't have been able to qualify for short gap and it was in I was better off paying the BS premium than the tax for a two month gap. Even if it's to my own detriment I refuse to do business with a company that sees me as a cash cow.
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