In-Your-Face Felonies, Willfully Ignored
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2019-04-25 10:28 by Karl Denninger
in Health Reform , 311 references Ignore this thread
In-Your-Face Felonies, Willfully Ignored
[Comments enabled]

There are times that you read something and as you do you start counting the criminal felonies -- just the ones in which someone gets prosecuted mount up so high you literally lose count.

But what's worse is the ticking off of the felonies that nobody gets arrested for, but are outlined in stark relief.

This is one example from CATO's book on Health Care:


That describes a classic form of extortion: "That's a very nice house you have there.  It would be a shame if you had to sell it because you got into a car wreck and were taken to the 'wrong' hospital."

Since it's also happening between multiple people we can add Racketeering to the allegations.

What's worse is that it has a name, as is described just a bit further on and has been documented as being criminal in that at least one company got charged and prosecuted.  But did the people defrauded get their money back?  No.  Nor did anyone go to prison.

Never mind that just a few pages later we hear that more than a third of physicians admit intentionally "up-coding"; that is, billing for things that didn't happen by exaggerating the complexity of a patient's condition.

third folks -- and those are just doctors who admit it.

Let me point out that every single one of those instances is theft, it is a criminal act, and given the amount of money involved and the active planning and involvement of their staff it is almost-certainly for every one of those physicians a serious criminal felony.

Oh, and if you think our current legislators are not involved?  Uh, Dan Gaetz -- father of Matt Gaetz -- is fingered in that book on page 200.  He was vice-chairman of the board of a firm that got caught.  He, of course, claims to have had no knowledge of it despite being on the board which has a legal responsibility to know what the company is doing.

He son is now in the US Congress where the rip-off continues, just as is former Governor Scott who, if you remember, was CEO of Columbia/HCA while the firm was robbing Medicare and Medicaid, ultimately paying $1.7 billion in fines.  Of course this was less than they stole, and further, none of the robbed -- who, I remind you in the case of Medicare, means Seniors since participants are responsible for 20%, got a nickel of their money back.

Not only that but the book points out something that is a central part of my argument on the fix: Hospitals make money -- and lots of it -- by giving you infections.


Got that folks?  The hospital makes nearly ten times as much if it gives you a commonly-fatal infection.

Why would they care to take the precautions -- a simple checklist -- that prevents nearly all such infections?  

When they don't not only do you get massively screwed financially there's a very good chance you die.

This is not a "low probability" thing either; the record shows one in five persons that has surgery acquires a complication that is preventable through simple procedures that the hospital or physician did not perform.

The problem with the entirety of "Part 2" in this work is that it does nothing to address the out-of-control lawlessness.

The existing system is not one that is simply full of perverse incentives: It is full of outrageous, crippling fraud and felony, all of which is illegal.

Like so many other tomes on the matter even thought this one uses the "F" (fraud) word liberally (most don't) it doesn't use the other "F" word, felony, even though frauds are felonies.  It fails to call out both State and Federal prosecutors for failing to put a stop to all of this despite the existing laws that criminalize this conduct from top to bottom.

Oh yes, it does point to a few convictions.  The key here is "few"; in point of fact the structure of the system it documents is fraudulent and illegal.

Further, the book refuses to point out that if the cops don't want to arrest and the prosecutors don't want to prosecute then there is no solution until and unless the people make them do so, no matter what "structural" changes are enacted.

If I rob banks and realize that as long as I never point a gun at a cop and thus don't get shot, but when caught I will be required to give back only some of the loot then as long as the economic decision -- that is, I get to keep some of the money -- is to rob banks that is what I will do.

Simply put if the probability of getting caught robbing a bank is 1 in 3 then until and unless I must pay more than three times what I steal, if I never go to jail and never get shot then robbing banks is a good business.

The Government will never stop this voluntarily folks.  Never.  From the book and Rick Scott's own words:


If that doesn't make clear what's going on here nothing will.

Simply put it's this: The cost of medical care can be cut by 80% with little or no disruption to the health of Americans.  In fact health is likely to increase if for no other reason than avoidable errors and physician caused infections will drop like a stone as soon as those mistakes cost providers money instead of making them money.

If we were to force a fix then the Federal Deficit goes from over $1 trillion a year to an immediate and permanent surplus and your spendable value increases this year and every year thereafter.  You become wealthier even without a single raise -- ever.  The only people who get "screwed" are the 20% of the population that is currently screwing you.

If we don't do it then in just a few short years both Federal and State budgets collapse and deficits skyrocket.

Politicians will not do it voluntarily.  There is a 30+ year record on that.

They will instead find new ways to try to screw you in a vain attempt to keep the scam going -- and expand it.  Not one of the politicians running for election in 2020 to be President nor Trump, who said he would take this on during the 2016 campaign, has or will do so.  Many of these candidates that have said they will "help" are in Congress now; Bernie Sanders, for example, has a proposal that will increase the damage -- including by giving unlimited "free" medical care to illegal invaders who have no money -- and as such you will get their bill.  Bernie Sanders has been in office since 1991, first in the House and then Senate; he has had dozens of opportunities to stop these scams and has not only deliberately failed to do so he has voted for you to get butt****ed by medical firms and insurance companies -- repeatedly and more-violently.

CATO seems to think that the GOP had an "opportunity" to explain these facts to the public when Trump was elected.  But the GOP never intended to do any such thing.  Mitch McConnell, just to name one jackwad by example, has been in the Senate since 1984; he has failed to stop any of the screwing, ever, over the last 35 years despite being in a position to do so.  Rick Scott, who is now a Senator, and Matt Gaetz, a Representative with a father who was a State Senator, both have had a vested interest in increasing the flow of cash through health insurance companies -- and both are GOP members.  Both were involved up to their necks either personally or at a family level with health company related scams.  Their reward for engaging in same by themselves or their family members was Congressional seats with which they can screw you more.

Since insurance firms are regulated as to their maximum profit margin the only way they can make more money is for the total amount spent through them to increase.  This is the essence of Rick Scott's statement and it's absolutely true no matter the form of insurance.  As another example while car insurance companies will never tell you this (because you might burn the building to the ground and eat your insurance agent for lunch) they want you to buy more cars with more expensive collision repair costs -- more often.  They're even happier when you have more crashes so long as they're survivable.  The insurance industry loved both seatbelts and airbags -- and lobbied heavily to make both mandatory (along with passing mandatory seatbelt use laws in the states) because they made more-severe crashes survivable and thus not only did the amount of money that went through the insurance company go up on the present crash you would continue to be their customer after the crash and buy another car instead of being dead and never buying car insurance again.

IIHS crash-tests vehicles.  They rate them on survivability.  In point of fact the way they advocate reducing the force vectors for the people inside is to absorb more of it in the vehicle and they're perfectly fine with the entire vehicle being destroyed.  In crashes that would not be lethal (either with or without "modern" vehicle design) this greatly increases the monetary damage to the car.  They're very open about this ("the car gave its life for the people") but not about why, and it has nothing to do with you.  The economic incentives are for crashes to continually be more and more expensive -- in fact insurance companies want even modest crashes to be "totals" -- so the amount of money that flows through the auto insurance companies continually goes up.  Likewise the automakers don't care because the more vehicles are totaled in collisions the more money they make.  The only thing neither wants is dead people because dead people don't buy any more cars -- or insurance.

These entities all say they want more auto safety but the facts are that to grow their business they must have more cash-flow that goes through them, which means they either need more crashes, more expensive crashes or both -- so long as the operator survives.  Therefore the more damage the vehicle takes the better -- so long as you live.

One of the other arguments CATO makes is that Medicare pays more out than you paid in.  This is true but remember that Medicare is paying out grossly inflated prices and a huge amount of flat-out fraud.  Subtract that back out -- which is at least half the dollars spent and more-likely greater than 3/4 and the picture looks different.  Now add a reasonable Treasury rate of interest to your tax payments over your working life until you turn 65 and you actually bought an annuity with said tax payments which, on an actuarial basis, is quite sound and leaves enough money for management expenses.  You cannot say that Medicare is a "transfer" from the young to the old under those circumstances; that theft and fraud makes it so is not an excuse when both are intentionally un-prosecuted felonies.

Neither I nor anyone else who paid those taxes are responsible for the intentional failure to prosecute nor for the commission of the acts in the first place.  That responsibility rests with the health providers, insurance companies and government.

CATO also goes after the Medicare for All scam accurately enough.  Specifically, Medicare could, right now, negotiate price and refuse to pay if the price demanded was too high.  But every time CMS has asked for this authority in any way Congress has refused to provide it -- as CATO nicely documents.  When CMS thought it had ways to do this administratively Congress passed new laws to prohibit what CMS intended to do.  Bernie Sanders, along with the rest of the Democrats know this -- many of them, including Bernie specifically, actually were in Congress for one or more of these charades and voted to stop CMS from putting a stop to even the smallest portion of the scams!

One valid point is made that I've brought up before in this column: Use your Passport if you need significant medical attention yet are ambulatory.  You won't believe the price difference, and the percentage of people who have things go wrong is much lower besides -- mostly because they can't charge you for their screw-ups.  It's true that you largely can't sue in such a circumstance if something does go wrong but the odds of successfully suing here are low to begin with and the risk of the bad outcome here is higher.  In fact these medical centers typically are equal or better than the best in the United States, better by half or more than the average US hospital and cost 1/10th as much or less.  As just one example you can frequently buy a  round-trip plane ticket to Narita, Japan and an MRI for what the local place wants for the scan alone!  No, that's not a joke, nor is it uncommon.  In fact when it comes to surgical procedures and other major medical interventions it is entirely common to pay roughly 10% of what equivalent care would cost in the US; if you have a 20% cost share with insurance you're still better off getting on the plane!  Why did you spend all that money on insurance premiums again?

So what's left?

I hate to say it -- because it's damned fatalistic -- but there are only two ways this will ever be addressed in the United States:

1. The government -- federal and state -- collapses under the weight of the cost-shifting, fraud, felony and demands for ever-more.  This is slated to happen as soon as 2024 from the figures currently available, and that assumes no recession.  If we get a recession (and we probably will before then) it could occur sooner.  The cascade of failures initiated by this event, which is likely to center in Medicare first, will destroy state pensions as well if they haven't already blown up by then and will be effectively unstoppable.  Doubling or more the Federal Deficit on both a permanent and instant basis without an immediate, violent reaction in the markets, which is what it would take to stop this, is impossible.

2. The people find their pitchforks and torches, last used in 1776, and tell both Federal and State Governments as a body politic, not as a few individuals, with a credible threat to follow through: "You either cut this crap out right now with something similar to the plan I've put forward, resign en-masse and be replaced by people who will, or we are collectively are going to do business with the '100 Heads' insurance company."   It is both pointless and insane to believe that a handful of individuals could do anything other than commit suicide-by-cop through such a declaration and action but if even a few percent of the ~100 million 50+ year old Americans decided they'd had enough of this crap and were not going to sit back and watch the medical system destroy them wholesale, never mind financially raping their children and grandchildren just as they reach their Senior years the people could force an end to all of this garbage tomorrow.

Of course the government would have to believe the people, en-masse, mean it.

Who knows if 2 or 3 million people showing up on the National Mall -- which incidentally is enough to blanket the whole thing all the way from the Halls of Congress down the road in front of the Monument to the White House waving signs -- would be enough.  It might.  Then again, Congress and the White House might not believe the people are serious -- and things could get pretty ugly.

There's no evidence that mere voting will solve this.  Obama promised to solve it, and didn't -- on purpose.  Trump promised to solve it, and didn't -- on purpose.  Hillary and Bill intentionally screwed everyone in the 1990s on this exact point, as did Bush; if you remember Bill ran on this issue and then both he and Hillary hosed everyone.  The existing candidates for office today on the Democrat side of the aisle were, in large part, in either State or Federal Government when Obamacare was passed and made the problem worse rather than better, moving the date of collapse forward instead of back.  The Bernie Sanders-style "answers" are not answers at all; they're active, intentional frauds.  This issue in fact has been voted on by the public more than once already and the votes cast demanding same and the promises made to the voters were immediately ignored -- on purpose.

In fact the level of financial******imposed on the people was increased each and every time.

Any sort of violent outcome is crap and to be avoided but if we the people do not force both State and Federal lawmakers, along with law enforcement at both State and Federal levels to put a stop to the scams, frauds, racketeering and price-fixing right now the worst sort of violence is inevitably in our future.  When the ever-escalating bill, which is 80% scam, cannot be paid -- a date that is soon to arrive -- the reactionary impact by the people will be extraordinarily severe and lawless.  Civil unrest that comes from collapsed governments and budgets isn't the sort of thing that people think of when they contemplate "war", whether civil or otherwise; rather it's you walking to the mailbox and some jackwad shoots you -- because for whatever reason he thinks you have something he should have and no longer does -- like a working EBT card.  Your kid then finds who he thinks shot you, which is only some of the time the right person, and shoots him.  That cycle continues much like the alleged Hatfield and McCoy feud; soon nobody really knows why anyone shot anyone in the first place, only that they need to do it next.  That is what we're headed for -- or worse.  Think Bosnia or, if you prefer, Venezuela.  We'll be lucky if we "only" get Mexico with their 8,500 homicides in the first three months of this year alone.  To put this in perspective that's roughly five times the US murder rate on a population basis.  Venezuela, incidentally, has a murder rate ten times ours (as of 2016; it's probably worse now.) 

If you think our civil society and "roaring" stock market will look anything like they do today when, not if, such a scenario comes to fruition you're out of your damn mind.  Right now poor, black neighborhoods see this sort of thing in Chicago -- 100 killed and more than 500 shot year to date, all centered in an area of roughly less than half the city's landmass -- the rest of the city has seen zero shootings.  But if you live in one of the "blue" areas on this map nobody has been killed in your neighborhood this year at all -- and you probably feel pretty safe.

Now take those red and deep maroon neighborhoods -- all five of them -- and make the entire city look like that.

Do you really think there will be a single grocery store or gas station left that hasn't been looted and burned to the ground within hours under such a circumstance?  Really?  What about when those counts are multiplied by five or ten?

They will be.


This is what's at stake folks.  You may think you can sit on your ass and let things unfold but you're wrong, and if you sit on your ass or think any of the existing politicians are going to do jack without being forced to put a stop to this scam you're going to discover that you're tragically wrong, especially if you're one of the 80% of Americans that live in or near one of this nation's major population centers and those who actually make the things those cities need decide they've had enough of this crap and simply stop doing so.

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