Cut The Crap Trump and Congress: Healthcare

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

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

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.

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.

There are market-oriented solutions that can be implemented. Sen. Rand Paul proposes allowing other types of groups to get insurance on the same basis as employers do. For example, 10 million Americans belong to credit unions. Why not let credit union customers form a group? With that many members, you could negotiate a terrific deal and lower prices — and it’s portable because it’s not attached to your job.

We might need to loosen antitrust laws to allow small businesses to form consortiums for insurance purposes. For example, why not have the restaurants in Manhattan (of which there are MANY) for m an insurance consortium and get big-group low rates, instead of each of them (mostly small businesses) negotiating separately?

These are the kinds of things the Federal government can do to remove obstacles to a variety of market-based options.

We can also expand MSAs so that people can save up money for healthcare on a similar basis to the way we do IRAs. (That’s tax law.)

The more we can get the government bureaucrats — and the insurance bureaucrats — out of the way, the better.

Please call your members of Congress and tell them to vote NO on this disaster.

(202) 224-3121. Call your local office as well, and email them.

They will tell you that this bill is better than Obamacare. It is, but only marginally. Obamacare 2.0, as Rep. Justin Amash called it. They could do so much better.

It retains the Cadillac tax — although it’s deferred to 2025. It repeals the individual mandate, yet re-enacts it in a different form by including a 30 percent penalty when you re-insure after being uninsured. IOW, the mandate via the back door. And refundable tax credits ARE subsidies.

Way too much like Obamacare. Only marginally different. The Republicans own it now.

I don’t want to tinker around the margins. I want to get rid of it. All the more reason why we must kill the bill, and we must kill it with Republican votes.

How about re-passing the 2015 repeal bill that Obama vetoed? Apparently, it had enough support to pass, so why not pass it now when you have complete control of the government?

Even better — the Paul plan.

Fortunately, I don?t think Ryancare will pass the Senate, even if it gets out of the House. I believe there are already three Republican senators against — Cruz,. Paul, and Lee. I wouldn’t be surprised if Sasse turns out to be a no vote also.

They might not even get the opportunity, hopefully. Amash has already declared against the Ryancare plan. Hopefully, the Freedom Caucus will stand against it.

>>The problem isn’t health insurance it’s the cost of health care.

Well Captain Obvious, you wrote a whole article trying to sound smart and even mentioned the real problem, yet even after you mentioned the root cause, you say nothing about fixing that.

Nothing will ever fix health care “insurance” as long as the routine costs of health care are so astronomical. Captain Obvious might be wealthy enough to pay for his own doctor visits and prescription drugs, but this is nation where the median household income is $55k/yr.

Conservatives went crazy over “Death Panels” 8 years ago, but now we seem to be OK with “Death Wallets” because your catastrophic care policy will cover your heart attack, but it won’t cover your diabetes drugs and testing supplies.

I hate to repost such a large amount bof text, but since you apparently missed it the first time:

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.

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.

>>I hate to repost such a large amount bof text, but since you apparently missed it the first time:

I saw all that and read it twice before posting. It still doesn’t address the routine cost of diabetes or other chronic conditions. It comes close with the “monopoly pricing games”, but still misses the target.

The prices can’t fall like a stone below the medical office costs: doctors, nurses, equipment, rent, utilities, INSURANCE, profit, etc.

Same for the drug costs which the pharmceutical companies can justify by showing a full accounting of every regulatory hurdle they jump through. And do we want untested drugs? Slightly tested? Tested enough to be probably safe? What is your risk threshold? Again, is the “Death Wallet” going to determine who gets the tested version and who gets the untested version?

If coming up with 10 Large to save your life is so easy for poor people, you have to ask what they will give up. Maybe it will become fashionable to do a cost vs benefits analysis on Dad when he needs the bypass but is already costing the family 20% of its annual income in diabetes care. At least your Death Panel is family and the Hospital Rep and the credit reporting agency who can help factor your credit score into the deliberations.

Carl needs to stop crunching actuarial numbers and get out in the real world.

Health coverage is not accident coverage. People may pay for insurance for 30 years, usually to more than one company as they change career jobs, only to be denied or dumped somewhere around 50 when the actuarial tables rocket skyward - a full 15 years before Medicare kicks in. Unlike Medicare or Social Security, the person gets no ‘credit’ for having paid 30 years of premium and the newest insurance company doesn’t care how long a person has paid in, even though they may have insured that same person different times in that person’s life.

Maybe the insurance companies should have to set aside a portion of that 30 years of premiums for a special fund to offset costs for those people who actually need insurance come 50 instead of spending the money as it comes in on spectacular buildings and political contributions. So, that’s one problem.

As for paying for a house fire ‘in cash’, most $20-40K a year Americans don’t have $180K to set aside for a house fire. Fire premiums are icing for insurance companies. IF all 500,000 structure fires in 2015 were houses, at $2,000/year premium, the insurance company broke even on the $1B paid out and made a mint on the millions of other policies. If an individual put $400-$1800 aside each year instead of paying a fire premium, they couldn’t save $180K in their lifetime - not at 0.1% bank interest

Piracy is piracy. We can go 1984 and give insurance companies totally control over peoples actions and have food police inspecting garbage cans, and fire police telling people how to decorate or clean their homes, and auto police telling people how often to get maintenance on their vehicles or where they can and can’t drive or park, and genetic police marking individuals for no coverage at birth.

Or we can put some rules in place for doing business in the 300Million+ person market that is the USA, and especially for the legalized gambling industry we call insurance.

>>All of those things were covered when medical was 4% of GDP. Now it’s 20% of GDP. If you get rid of monopolies, have patent reform, allow reimportation of drugs/equipment, and require pricing transparency, prices will collapse and yes it will be a huge “hit” to GDP & stock market in the very short term. The fact that even “medium” surgeries that it’s cheaper to fly first class to Japan, stay over their for the surgery in a 5 star hotel, and fly back is significantly cheaper than having it done in the US tells you that we are just getting hosed.

When health care was 4% of GDP, people died of undiagnosed cancers all the time. They suffered massive heart attacks and died. They needed something called “exploratory surgery” to find out what that lump was. Doctors used stainless steel instruments that were sterilized (somewhat) and reused. A lot (but not all) of that extra 16% covers these improvements. We could make health care cheap again by going back to 1970 levels of care and expectations of outcomes.

Bryanw92, you wrote, frustrated with costs, I think, this: "Nothing will ever fix health care “insurance” as long as the routine costs of health care are so astronomical. Captain Obvious might be wealthy enough to pay for his own doctor visits and prescription drugs, but this is nation where the median household income is $55k/yr."

(A) We all get more from medical care than we used to. We are buying new things. We are fortunate that there are many more things in medicine to buy.

If we were still buying the same thing as 1965 it would be rather cheap to buy. So don't compare it to something like food. The percent of income that medical care consumes will not go back to the olden days. When they save your life in a car wreck that would have killed you in 1965 you live SICK and INJURED for a long time while healing, so it costs a lot more. How much did you pay for a cell phone on 1965? Zero. There weren't any. You have to compare apples to apples.

This is a captain obvious point too, and if this point is not understood and accepted then no one is going to be able to please you: costs are not going to drop as much as you want because what you want is MORE. Either accept that or subtract all the new things in medicine and compare apples to apples.

(B) That said, and this is the more important point, the Free Market is what can and will lower prices in medical care, prices which I agree are insane, but they have resulted from constraint of the free market by the fascist forces for years, culminating in our present Gruberized mess.

So, Free the Free Market!

Repeal ObamaCare!

Get rid of all the constraints imposed by the Democrats' fascism as embodied in ObamaCare.

Stop taking tax money for Federal programs in medical and health care which is doled back out only to states with fascist strings attached, making them jump through "blessed" hoops -- instead leave it in the states to run their own programs if they choose -- they would have to raise taxes to do that possibly, but oh well, at least it's legally at the state level, and We the People have more direct control over how things run in our states.

Run some low cost temporary Federal programs to encourage and coordinate insurance to (1) be sold over state lines, and (2) be sold continuously over annual deadlines. Modeling it with new cross-state-line regulations on Medicare Advantage programs would be one example.

Create a free, "opensource" 5 digit style procedural code system to replace the nasty CPT codes owned by the AMA which prevent advertising and posting of medical PRICES. IMPORTANT! People have to understand the cost of what they are buying in order to choose well!

Outlaw charging different people different prices for the same services at a Federal level, and encourage that same thing be done in states. NO MORE FAKE PRICES !

Require that "providers" for Federal plans be able to disclose their prices for services+ at the time of service and in real time. Encourage and help this to happen. Encourage advertising and posting prices!

Encourage splitting predictable preventive care procedures and services AWAY from medical services for illness and accidents, which are only 'estimatable' in the aggregate. This gives much more granular control over society providing general wellness services and medical care for the sick and injured. These are different things and should be separately controllable and they are not now. It also splits the more politically correct crap away from care of the sick and injured.

Costs Will Fall if the free market is freed. People will be able to get ENOUGH care for themselves, just like we get enough food. We cannot all eat every meal at the finest restaurants, but no one is starving! Medical Care can be just like that when you get the fascists out of the way.

Here is a good little book for everyone to read, 54 LITTLE pages written in a clear and readable manner. You can read it as fast as many complicated FR threads. It is not only about the free market, however, but it is a great help in ordering one's mind about how medicine in America ought to work.

It is from the best organization in American medicine, the Association of American Physicians and Surgeons, yes the same group that sued HillaryCare into oblivion in the 1990's.

http://aapsonline.org/common-sense-medicine-restoring-the-patientphysician-relationship/

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