Amerika

I’ve been called many names in my life – some of them well deserved. After writing this blog for a while, I’ve picked up a new name that I have never been called before:

Un-American

After all, don’t companies have a right to market and sell their products? And when marketing and selling these products, don’t they have a right to make a profit? This is, after all, the American Way. Like it or not, we live in a capitalistic society. Making a profit is the god-given right for any corporation. Besides, when a drug company or a health care carrier makes a profit, their shareholders benefit from that profit. They employ thousands of people, thereby providing for them and their families. Being against these companies is downright socialistic. If I don’t like what they are doing, why don’t I move to a socialist country?

Good point.

I have a very simple reply: claiming that I am un-American for my views is like saying that a prosecutor who puts rapists and child molesters behind bars is against sex.

Corporations that abuse the public trust and who force this country towards the brink of bankruptcy for the sake of windfall profits are the ones who are truly Un-American.

That’s my view and I’m sticking with it.


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War of the Worlds

H.G. Wells, the famous science fiction writer, was amazing in many of his predictions of the future. I have always enjoyed his masterpiece ‘War of the Worlds’. Maybe this is because I used to live near Grover’s Mill, NJ, where Orson Wells claimed Martians had landed in his famous radio adaptation of H.G.s’ work.

If you recall the original story, the invading Martians were threatening to destroy our society. In the 1898 novel, Martians attacked our civilization using 3-legged machines of war called ‘tripods’.

Funny thing is, 112 years after H.G.Wells’ novel, our society is really under attack (or, at least, our health care system) by another 3-legged menace, albeit of terrestrial origin.




I know I have spoken of the health insurance carriers and the pharmaceutical companies at length, but there is a third leg to the war machine that works synergistically with these other two threats. In some ways, this third leg is even more sinister, as it operates relatively out of sight and mind, yet it’s contribution to the system’s decline is just as pronounced. I am referring to, of course, our legal community.

Over the past half century, we have seen a seen a tremendous rise in the amount of liability lawsuits in this country, and these lawsuits have hit the medical community hard.

Once again, let’s ask Drew Carey. When his show is not featuring commercials for power chairs or catheters, you quite likely to see a commercial for a local law firm. They all sound alike:

Have you been injured in an accident? Are you willing to fake an injury? Then call the law firm of Dewey Cheatem & Howe …

Yes, if you had an auto accident, ever been exposed to asbestos, or were injured at work, your local lawsuit mill WANTS YOU.

They also want you if you were the victim of malpractice, or if you took certain prescription drugs. Remember the recent Celebrex lawsuits? Law firms all over this country have set up entire divisions to handle this class action. Once the blood is spilled in the water, the sharks are never far behind. Malpractice lawsuits and lawsuits against certain pharmaceuticals are a huge business. Multi-million dollar settlements and awards are not uncommon. Some class action suits can result in settlements or awards in the billion dollar price range. In general, a full third of these awards and settlements are paid to the plaintiffs law firm. No wonder they advertise on TV.

Let’s all remember Star Trek Economics – the money to pay these settlements come, ultimately, from your wallet. The huge premiums that a medical provider pays for malpractice insurance, or the gargantuan reserves that a pharmaceutical company keeps to fend off product liability lawsuits are all passed on to you in the form of more expensive medical care and higher prices for your prescription drugs.

And Dewey Cheatem & Howe has never even sent you a thank you card.


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Economics 101

What do Casinos and Your Health Insurance carrier have in common?

They both have an intricate understanding of statistics and the law of large numbers. They understand that the larger the number of participants, the safer they are. If the number is large enough, statistically, they will make huge amounts of money. It’s the original suckers bet – and we’re the suckers.

Want to bet me $1,000.00 on a toss of a coin? Not for me – too much of a risk. How about you pay me $1,100.00 if my side comes up but I pay you only $1,000.00 if your side comes up? I’m still not interested, as I could easily lose $1,000.00, but you’ve got my attention. Okay, same bet but we agree to repeat it 500 times. Let’s go – I’m in!

So long as you aren’t cheating, I’d be a fool not to take that bet. Without a doubt, at the end of those 500 tosses, I’m going to have $50,000.00 of your money or something very close to it. I cannot lose – guaranteed – this works every single time.

This is statistics, plain and simple, coupled with the law of large numbers. Never heard of it ? Well, it is the very foundation that Las Vegas, Atlantic City, and your Health Insurance carrier are built upon. How else do you think that those casinos can build those huge hotels on prime real estate, give away low priced buffet dinners, and pay people to come in by bus?

Take our coin toss – you know that – heads or tails – it’s a 50-50 chance to win. Flip it ten times, and one of us might get a lucky streak and win 8 out of 10 times. But flip it 500 times, or 5,000 or 50,000 times and guess what? Percentage wise, the number of times that that coin comes up heads will be very close to 50% - that’s the law of large numbers.

Okay, so it may not be exactly 50% - perhaps it might come out to 49.8% or some fractional number like that. However, because I took the 10% advantage (getting $1,100.00 when I win and paying $1,000.00 when I lose) I am guaranteed to come out ahead. Guaranteed.

Now when we deal with more complex systems – a slot machine, a roulette wheel, or a health insurance policy, the percentages are still there, but they are quite a bit more complicated to figure out. This is where the actuaries come in. Actuaries are a special breed: Part Accountant, part statistician, and part odds maker, they analyze insurance data and, using the law of large numbers, can uncannily predict how much money your insurance carrier will pay out in benefits for you next year. Mark this up by a certain percentage, and this is how they calculate your premiums.

Insurance, it seems, is a fairly straightforward business. But there is the little fact about the business that your carrier does not want you to know or even think about.

Let’s go back to our little coin toss experiment, where I made that neat little 10% margin. That 10% margin is 10% of the total amount bet. So if we bet $1,000.00 a pop, and toss the coin 500 times, we would have bet a total of $500,000.00 and I would have a profit of 10% of that or $50,000.00. If we decided to up the ante (because you are bad at statistics) and bet $2,000 a toss, times, we would have bet a total $1,000,000.00 and my 10% margin would net me a cool $100,000.00. It does not matter what amount is bet, so long as the number of bets is sufficiently large, the 10% profit will always be there.

This has a very real implication in the world of insurance – your premium – or ‘bet’ if you will – always yields the carrier the same percentage profit. This means, and I am putting this in Caps because it is so important – THE MORE MONEY YOU PAY IN PREMIUMS, THE MORE MONEY THAT THE CARRIER MAKES. In other words, in spite of how much they may try to spin the truth, AN INSURANCE CARRIER HAS ABSOLUTELY NO BENEFIT OR DESIRE TO KEEP THE MONEY THEY PAY OUT AND THEREFORE YOUR INSURANCE PREMIUMS LOW. In fact, the opposite is true – the more money they pay out = the more money you pay in premiums = the more money the carrier makes.

Now, carriers may claim that they are trying to keep premiums low, or that, because of their efforts, you are actually paying less for your health care. In fact, they spend a good deal of money promoting themselves this way. Meanwhile, behind closed doors, they are secretly laughing at us all.

Laughing all the way to the bank. You can bet on it.

Sticker Shock

Here’s one way to start getting health care spending under control – and it’s one thing that all the players really don’t want to do – so you know it’s got to be a good idea!

The idea is so simple, it’s ludicrous no one has thought to mention it before: Let’s make a law that every health care provider, every laboratory, every hospital and every pharmacy has to tell you what their products and services cost BEFORE you purchase them. Not just the co-pay amounts and out of pocket costs – the actual retail price. When you think about it, health care is the one area where we spend a large percentage of our incomes and we never bother to ask the price before we buy – where else do we do this?

The American consumer is only concerned with what it something cost them out of pocket – not what it will actually cost them down the road in higher premiums, etc.

And most of them (not you and me, of course) still believe in Star Trek Economics.

Let’s start asking: What does that test cost? Do I really need another MRI? What does an office visit cost? Do I really need to see you twice a month? How much does that Rx cost? Is there a cheaper version? Another more affordable alternative?

Like lemmings off a cliff, we remain blissfully unaware of what our health care truly cost as we leap into the abyss. If we were aware, we might be prone to make more fiscally responsible decisions when managing our health.


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One Crazy Summer

Is it me, or are our leaders in Washington crazy?

Okay, maybe ‘crazy’ is a politically incorrect word. Perhaps ‘insane’ is a better term.



One of the best definitions of insanity that I have ever heard is when someone does the same thing over and over again but expects different results every time they try it.

So, what then, can we say about our government leaders? In my opinion, a national health insurance plan is just another reincarnation of the failed health insurance model that is bankrupting all of us. Aside from the government’s involvement, it really offers any real change from what we have right now – and what we have right now isn’t working. By failing to address all of the major faults of the current system, national health care is doomed to failure. It will offer some temporary reprieve, but in the long run, we’ll end up right back where we are right now.

The sad thing is, the government has it in its power to address some of the real vampires that are sucking the lifeblood out of our current system. Instead, they are just rehashing the same failed delivery system we are stuck with today. And by doing so, we know that we’re going to end up with the same result tomorrow.

After all, we’re not crazy.


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Barnie Stimpson

Did anyone watch the CBS sitcom ‘How I Met Your Mother’ last night? I’m a big fan of this edgy comedy.

Well, last night, Barney Stimson (as played by Neil Patrick Harris, aka Doogie Howser, MD) noticed the influx of a bevy of beautiful women into the local watering hole. Barnie, for those of you unfamiliar with the show, is the quintessential ladies man (Neil apparently is the greatest American actor since Barrymore!). He excitedly identifies this troupe of women as Pharmeceutical Sales Reps, or ‘Pharmagirls’

These Pharmagirls are known for their beauty as well as their outstanding ability to flirt with men and keep them ‘on the hook’.

Barnie (or Neil) must have been reading my blog on the ‘Paninni Parade’.

Thanks, Barnie! It’s nice to know SOMEBODY is paying attention! ;-)


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Little Dutch Boy

All right then – are you ready to start plugging holes in our health care system?

Good – let’s get started by first finding some holes to plug.

Oh, some holes are obvious, and others are veiled by layers of smoke and mirrors. So, let’s find some obvious holes first – you know – to get the ball rolling. To find these holes, we should ask one of the leading experts in the field of loopholes that lead to wasteful spending of our collective health care dollar.

I am referring, of course, to Drew Carey.



You all know Drew – the portly, friendly-faced comedian with the blonde crew-cut and the thick horn-rimmed glasses. For the past year or so, Drew Carey has been the host of the extremely popular daytime game show ‘The Price Is Right”. Tune in any day, and watch the commercials – they are very enlightening!

Aside from the usual pharmaceutical commercials, you will be bombarded by commercials for medically related products that you would never think need to be advertised on national TV. Diabetic testing supplies. Catheters. Power Wheelchairs.

Plus, the announcer states over and over ‘Medicare and your insurance company will get you these items at little or no cost to you!’ ‘Star Trek Economics’ strikes again.

“I want to go-go-go in my hoveround” “it didn’t cost me a penny!”

http://www.youtube.com/watch?v=UKPeYrrhIvQ

How many people need a $7,000 power wheel chair? And if, god forbid, you did require one, wouldn’t your doctor put you in touch with a local supplier?

Diabetic Testing Supplies – Get your free meter – the supplies (that work with this free meter) are covered by Medicare -we’ll even order them and deliver them for free!

http://www.youtube.com/watch?v=YXQaMaBxwRg


How about re-using catheters? Not any more!

http://www.youtube.com/watch?v=oFEio0OCWek


OK, let me be 100% clear her – I am not against diabetics, wheelchair bound individuals, or people who need to use catheters. But please understand that these represent a relatively small portion of society. So why are we bombarded by expensive television commercials for these products that also happen to be covered by Medicare and Private Health Insurance? How can these suppliers afford to do this? The average 30 second TV commercial run nationwide costs around $100,000.00 to air. How can a company selling catheters drop ½ million a week on advertising?

There can only be one answer – there is a ridiculously high profit on these products. If there weren’t, . they would not be able to air all of these commercials and still remain profitable. This means that Medicare and Health Insurance carriers are paying far, far too much for these products – and that means we all are paying too much for them.

Need more proof? Check out what these wheelchairs sell for used. A power chair that is only a few months old in perfect condition will lose 75% or more of its value – it seems that they are not worth so much when insurance is not paying for them.

So lets start by identifying these over-priced products and restructuring the amounts that are being Medicare and Private Insurance are paying for them. This won’t have a major impact on health care cost, but it’s a start, and an easy one at that. After all, Drew has already found them out for us.

(As a side note, I would LOVE for a Hoveround Wheelchair to be featured on a The Price Is Right” showcase, just to show how much these things actually cost – I bet that few people watching the show has any idea that they cost around $7,000.00).
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