“Insurance” Costs

My Medicare-aged wife broke her wrist, which necessitated surgery, and our health plan provider sent us an accounting of the costs involved.  Following are the high points of those costs.  It’s necessary to emphasize that the surgery is relatively routine following a wrist “fracture,” since the wrist is little different from a sack of pig’s knuckles, and where the arm bones, the ulna and radius join the wrist is more of an abutment than a joining.  The “fracture” was more of a slight jumbling of those pig’s knuckles and small breaks of the ends of the ulna and radius; the surgery was to rearrange the knuckles and repair the fractures with a plate and some bolts.  Really quite routine and minor (save the post-op pain and the long recovery time and discomfort); that emphasizes the nature of the costs.

The initial care was in the ER of a hospital not “in network;” the injury occurred, also, 100 miles from home.

ER Service Provider’s bill to the Plan Total cost
(Plan approved)
Plan paid We paid
Wrist X-ray $342.31 $0 $0 $0
Apply splint $479.34 $0 $0 $0
ER Visit $764.99 $193.01 $115.65 $75.00
Totals $1,586.64 $193.01 $115.65 $75.00

 

Actual treatment:

Service Provider’s bill to the Plan Total cost
(Plan approved)
Plan paid We paid
Wrist X-ray $33 $873 $8.56 $0
Surgery* $24,691 $1,021 $757 $264
New Office Outpatient $285 $166.51 $143.58 $20**
Follow-up X-ray $94 $30.74 $30.13 $0
Elbow X-ray $102 $27.04 26.50 $0
Long arm splint $132 $90.13 $88.13 $0
Cast supporting splint $125 $12.27 $12.27 $0
Totals $738 $326.69 $300.81 $20

*Two separate charges, for two separate actions in the wrist’s surgery. I’ve lumped them together here.
**Copay

Just summing those high points, here are the totals.

ER Service Provider’s bill to the Plan Total cost
(Plan approved)
Plan paid We paid
Totals $27,316.64 $2,413.70 $1,182.02 $359

Notice that: the hospitals and the surgeon paid that vast majority of the costs of the provided health services.  Our health plan provider refused to pay them and the health providers were not allowed to bill us under the terms of their contract with the plan provider.  There’s no doubt, too, that the basic charges are inflated to cover those lost costs and the costs these entities incur when patients are uncovered or prove to be scofflaws.

Compare, in particular, the cost of similar surgery—nearly all inclusive—at a cash only (no health coverage plans) hospital in Oklahoma.  While the procedure listed isn’t exactly comparable to my wife’s situation, it’s close enough for this exposition.  The Surgery Center of Oklahoma’s price is $4,300; although the pre-op diagnostics like those initial X-rays are not included in the charge.

Keep in mind, too, that while Obamacare has made this situation far worse (and worsening), this sort of thing has been happening much longer than Obamacare’s existence.

One more thing.  A Medicare patient paying cash for a procedure in lieu of a Medicare plan’s coverage in order to get a lower total cost?  My GP tells me that it’s illegal for her to accept cash from a Medicare plan-covered patient.  I have to be uncovered altogether, beyond basic Medicare A, before she can accept legal tender.

It’s time we moved to a market-oriented system of health care and of health insurance.  See that Oklahoma hospital.

Spotify and Crony Capitalism

Spotify AB wants to do an initial stock offering, an IPO, on the New York Stock Exchange, and the company wants to do it without benefit of bank underwriters.  Oddly, the NYSE has to ask the SEC for permission to amend its own rules to allow this.  Even more strange, the SEC is dithering over granting that permission—to allow the private enterprise, the NYSE, to conduct its own business as it sees fit, and more proximately, to allow the private enterprise, Spotify, to conduct its business as it sees fit.  The SEC is claiming, with a straight face, that it has until the middle of February to make up its mind.

That the Government agency even thinks it needs to think about this is shady.  Government mandating bank involvement in a private enterprise company’s public offering? That would be textbook crony capitalism.

The SEC had concerns that Spotify’s direct listing could open the door for other companies with potentially risky financial profiles to access the public markets without giving investors sufficient protection[.]

Caveat emptorGovernment-favored bankers Us investors don’t need the protection of Big Brother. I understand that personal responsibility is anathema to Government bureaucrats, but this is a shield too far.

The SEC needs to reject such…stuff…stop dithering, and grant the permissions out of hand.

The Question is a Non Sequitur

John McKinnon and Brent Kendall, in their Wall Street Journal piece, asked Is FTC Up to the Task of Internet Regulation?

His piece is about the split between what the FCC (the erstwhile “regulator” of the Internet, courtesy of the Obama administration) and the FTC are qualified to regulate.

The question is a bit of a non sequitur, though. The Internet is merely a transport medium, and it needs very little regulation. The FTC is fully up to the task of regulating (ideally with a similarly light touch) trade, which is independent of the medium—highway, railroad, snail mail, or electronic—over which the traded products are transported.

And: lightly regulated commerce is highly conducive to innovation.  Just look at our communications system since the breakup and deregulation of Ma Bell.  And the Internet between its inception and the Obama FCC-imposed impediment.

“major distortive impact on international trade”

That’s the claim of European nations–Germany, France, Italy, Spain, and the UK—as they worry about the drop in corporate tax rates that the House and Senate bills propose.

Well, of course.  They also don’t like the highly competitive tax rates applied by Ireland and Luxembourg and routinely excoriate those nations for having the temerity of competing via tax treatment for business.  While the nations bleat about double taxation and how European businesses operating in the US would be at a tax disadvantage compared to US companies operating in the US, here’s the nub of the thing:

Even without those provisions, the reform would leave US businesses facing lower domestic-tax rates than some of their European peers, putting governments under pressure to reciprocate.

The horror.  And those nations—and the EU generally—still have not justified either their high tax rates or their high spending rates that underlie those tax rates.  The nations also have exposed their hypocrisy:

[T]he proposed “base erosion and anti-abuse tax provision” contained in the Senate bill could harm international banking and insurance businesses because it would treat cross-border financial transactions between a company and a subsidiary as nondeductible, subjecting it to a 10% tax[.]

Never mind that the EU already is attacking the international banking industry (and the insurance industry won’t be far behind) by demanding a tax on all financial transactions (currently masqueraded as a tax on investment transactions, but what else does an international bank do?), which itself can only depress international banking.  But hey, it’s a tax, so it’s all good.  Or so insist the Know Betters of EU Big Government.

The UK’s concern is especially interesting both as that nation drifts away from Thatcherism, even in its allegedly Conservative coalition and as the UK stands to make out like bandits in international trade following Brexit and the loss of EU fetters on its economy (always assuming the timid May government doesn’t surrender the farm in the face of EU intransigence).

Individual Mandate and Risk Pools

Louise Radnofsky and Stephanie Armour had a piece in The Wall Street Journal that looked at the small and shrinking impact of removing the Individual Mandate (or more accurately, removing the penalty Supreme Court-created tax imposed for not satisfying the IM) on the health coverage providing industry.  The piece is worth the read, but there was one remark quoted at the end that wants a particular look.

“Making the risk pool stable is a vital part” of keeping individual insurance premiums in line with the overall cost to cover a person insured through a larger group or employer, said Andy Slavitt, a top health official in the Obama administration.

You bet. However, in order to stabilize a risk pool, it’s necessary to understand risk pools. A healthy young man does not have the same risks as an elderly man or woman, and so he does not belong in either of their risk pools, either of them in his, and neither of those two in each other’s. A healthy woman of child-bearing age does not share the same risks as a post-menopausal woman, and neither share the same risks as a man of any age. None of those three groups belong in the same risk pool as any of the others.

Health-related risk pools, to be effective and accurate at estimating future health coverage costs and so arriving at reasonable fees for accepting the transfer of the risks involved, need to be reasonably homogeneous.  Belonging to the species homo sapiens is not sufficiently homogeneous.