Category Archives: Healthcare Reform

Karl Denninger’s Solution to the U.S. Healthcare Mess AND Federal Deficit Spending

Steve Parker MD

One of two bridges over the Colorado river in the Grand Canyon near Phantom Ranch

Karl says that U.S. healthcare and health insurance are way too expensive because of:

  • monopolistic practices
  • collusion among the major players (e.g., insurers, labs, Big Pharma, politicians, doctors)
  • ignored violations of the Sherman, Clayton, and Robinson-Patman Acts (15 USC)
  • ignored violations of state consumer protection laws
  • absence of market forces
  • price-fixing

Eliminate those problems, and you’d cut the cost of healthcare by 80%, the point at which you would need only catastrophic health insurance coverage, if at all. We’d have enough money left over to stop our federal deficit spending and eventually retire the entire federal debt. According to Karl.

What are examples of an absence of market forces?

  • Have you ever seen health insurance companies or hospitals compete on the basis of cost? Doctors rarely do it, either (and only when insurance isn’t involved).
  • Have you ever tried to get a firm estimate on the total cost of a proposed procedure before you have it done? Good luck with that.
  • The consumer of healthcare services usually isn’t the one paying for it. Your insurance company or the government (e.g., Medicare) is paying. You’ll get no thanks for your time spent shopping around for the best deal.
  • Scorpion antivenom costs $100 in Mexico, but if you get it in an emergency department in the U.S., you’ll be billed $40,000 for it. And don’t think you can go to Mexico and stock up then sell it to emergency departments for $150—that’s illegal.

Karl sings the praises of the Surgical Center of Oklahoma. They post their prices up front, work on a mostly cash basis, and eliminate the bill-padding and wasteful bureaucracy of other facilities. Their prices are a fifth of what others charge.

One possible fly in Karl’s ointment is that insurers are exempt from federal antitrust laws per 1945’s McCarran-Ferguson Act. Only a handful of industries are exempt. Karl doesn’t mention that. Nor does he talk about the cost of medical malpractice insurance and defensive medicine, wherein doctors order excessive testing to protect themselves from lawsuits.

I appreciate Karls’ efforts. He’s a smart guy with many good ideas.


Steve Parker, M.D.

Could Smart Healthcare Reform Solve the U.S. Budget Deficit?

Karl Denninger makes the case that the U.S. federal budget deficit is the fault of medical monopolies that are exempt from the Sherman and Clayton anti-trust laws. In his 20-minute video, Karl mentions that a vial of scorpion antivenin costs $10,000 in the U.S., but only $100 across the border in Mexico.

In a free market, a buyer of a product or service can easily determine how much it costs, whether it’s a haircut or a house. If you think U.S. healthcare is anything near a free market, just call up your local hospitals and ask how much they charge for an uncomplicated hospitalization to have a baby or groin hernia repair. Go ahead, I’ll wait.

They won’t or can’t give you the numbers. Nor do they advertise the prices so you can be a smart shopper.

Have you noticed how advances in science and technology tend to lower the cost of most goods and services, such as computers, cell phones, food, and clothing? Why don’t we see that in healthcare? Because of monopolistic practices and other excessive governmental regulation and bureaucracy affecting not only healthcare providers but also Big Pharma and health insurers.

Unfortunately, I don’t see the situation changing anytime soon.

Steve Parker, M.D.



You May Need to Rein In Your Doctors at the End of Your Life

The Wall Street Journal has a sad article about end-of-life care and being in control. Some statistics caught my eye:

This disconnect has ruinous economic costs. About a quarter of Medicare’s $550 billion annual budget pays for medical treatment in the last year of life. Almost a third of Medicare patients have surgery in their last year of life, and nearly one in five in their last month of life. In their last year of life, one-third to one-half of Medicare patients spend time in an intensive care unit, where 10 days of futile flailing can cost as much as $323,000. Medical overtreatment costs the U.S. health care system an estimated $158 billion to $226 billion a year.

But you don’t care about the money because you’re not paying for it, right? Remember that physicians are much less aggressive with end-of-life care when it comes to their own lives. It’s not about the money.

Read the whole thing.

Steve Parker, M.D.

The Solution to High U.S. Healthcare Cost is LESS Government Intervention, Not More

For the argument, click through for an article at The Heritage Foundation. A quote:

The United States does not have a private-sector health insurance system, let alone a functioning competitive market for insurance or health services. In fact, the federal government has been the dominant force in American health care for decades, long before the recent massive expansion of the government’s role in the 2010 Patient Protection and Affordable Care Act (PPACA) [Obamacare]. Through overly restrictive policies, Medicare, Medicaid, and tax subsidies, the federal government has dominated the operation of the U.S. health care system for the past half-century. It is primarily federal policies that are responsible for driving up costs and making health insurance unaffordable for so many Americans.

You’ll read how Democrats helped deregulate the airline and trucking industries, leading to lower consumer costs.

QOTD On Obamacare: How Do You Tell If a Politician Is Lying?

“President Obama repeatedly assured Americans that after the Affordable Care Act became law, people who liked their health insurance would be able to keep it. But millions of Americans are getting or are about to get cancellation letters for their health insurance under Obamacare, say experts, and the Obama administration has known that for at least three years.”

Lisa Myers and Hannah Rappleye at NBC News

Big Pharma, Big Ag, and Now Big Medicine

Steven Hsieh has an article at PJ Media on how to co-exist with the U.S. government take-over of one sixth of our economy: health insurance and medical care. His major points of advice are:

  • Take control of your health spending
  • Find a doctor who will work for you
  • Be engaged in your own health care
  • Defend the morality of private medicine

As long as it’s safe and affordable, you’ll want to avoid Obamacare doctors and hospitals. Get yourself as healthy as possible by exercising regularly, eating right, avoiding obesity, stop over-using alcohol and dangerous drugs, stop smoking, etc. The Unaffordable Care Act nightmare hasn’t hit full force yet, but it’s just a matter of time.

Wonder Why Healthcare Costs So Much in the U.S.?

Nathaniel Givens explains nearly all of it in a blog post.

Imagine if grocery shopping worked like health insurance.  Let’s call it “food insurance”.

First of all, you’d better hope that you’re not self-employed or unemployed. You see, way back in World War II the United States created strict wage controls as part of theStabilization Act of 1942. Since employers still wanted to compete for the best employees–even in wartime–they had to get creative. Instead of offering higher salaries (which was now illegal), they began to offer fringe benefits. The most important of these was healthcare insurance. Let’s pretend that food insurance started in the same way. That would mean that, today, if you get your food insurance through an employer-provided plan you not only get a nice tax advantage on your own premiums, but you can also rely on the employer to pay some of your costs as a matter of traditional expectations. But if you’re self-employed, you not only lose the tax-advantage, but also the ability to get the lower rates that come with buying insurance for bigger groups.

Now let’s imagine what actually shopping for groceries would look like.

One thing Nathaniel left out is the cost of our legal system, which is significant. Adopting the “English Rule” (loser pays legal fees) would be a major step in the right direction.

Read the rest.

Cheapest Obamacare Plan to Be $20,000 per Year

…according to a report at

Gee, that seems kind of expensive. Median U.S. household income in 2011 was only $50,000.

Why Does the U.S. Rank Poorly In Longevity?

In the news once again is the poor ranking of the U.S. in terms of longevity compared to other developed countries.  As always, this will spark discussion about what can be done to improve our ranking.

The New England Journal of Medicine in 2007 published an article looking at the determinants of premature death (and poor health, by implication).  Here are some quotations from the article:

  • Health is influenced by factors in five domains – genetics, social circumstances, environmental exposures, behavioral patterns, and health care. When it comes to reducing early deaths, medical care has a relatively minor role.  [These five domains are the article author’s determinants of premature death.]
  • Even if the entire U.S. population had access to excellent medical care – which it does not – only a small fraction of these [early] deaths could be prevented.
  • The United States spends more on health care than any other nation in the world, yet it ranks poorly on nearly every measure of health status.
  • . . . inadequate health care accounts for only 10% of premature deaths . . .
  • The single greatest opportunity to improve health and reduce premature deaths lies in personal behavior [emphasis added].  In fact, behavioral causes account for nearly 40% of all deaths in the United States.
  • Although there has been disagreement over the actual number of deaths that can be attributed to obesity and physical inactivity combined, it is clear that this pair of factors and smoking are the top two behavioral causes of premature death.
  • If the public’s health is to improve, however, that improvement is more likely to come from behavioral change than from technological innovation.

Parker here again.

Behavioral patterns cause 40% of poor health and premature death.  Since healthcare determines only 10% of health status and premature death, let’s focus our health-promotion attention on the other 90%—behavioral patterns, social circumstances, genetics, and environmental exposure.  Bigger bang for the buck.

Don’t we the people already know what to do to improve our health?  Execution is the problem.

We’re smart enough to solve this problem.  But are we too lazy and spineless?

Steve Parker, M.D.

Steven Brill: Why Medical Bills Are Killing Us

Read the article at Time: Health & Family.  Quotes:

“What are the reasons, good or bad, that cancer means a half-million- or million-dollar tab? Why should a trip to the emergency room for chest pains that turn out to be indigestion bring a bill that can exceed the cost of a semester of college? What makes a single dose of even the most wonderful wonder drug cost thousands of dollars? Why does simple lab work done during a few days in a hospital cost more than a car? And what is so different about the medical ecosystem that causes technology advances to drive bills up instead of down?”

“I got the idea for this article when I was visiting Rice University last year. As I was leaving the campus, which is just outside the central business district of Houston, I noticed a group of glass skyscrapers about a mile away lighting up the evening sky. The scene looked like Dubai. I was looking at the Texas Medical Center, a nearly 1,300-acre, 280-building complex of hospitals and related medical facilities, of which MD Anderson is the lead brand name. Medicine had obviously become a huge business. In fact, of Houston’s top 10 employers, five are hospitals, including MD Anderson with 19,000 employees; three, led by ExxonMobil with 14,000 employees, are energy companies. How did that happen, I wondered. Where’s all that money coming from? And where is it going? I have spent the past seven months trying to find out by analyzing a variety of bills from hospitals like MD Anderson, doctors, drug companies and every other player in the American health care ecosystem.”
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