How can we get health care costs down?

I have a story for both cat lovers and health care cost enthusiasts. Really? You’ll hear about trying to care for a sick cat shows how the free market can reduce those health care costs.

Blanca was about to lose her house after her husband died. Hear about how she recovered from that, how she took steps to ensure her financial stability, and how ironic her solution was.

Mentioned links:

Cat Bites The Hand That Feeds; Hospital Bills $48,512

Ocasio-Cortez’s Mom Leaves New York To Escape Democrats’ High Taxes

EXCLUSIVE: ‘God played quite a joke on me with this politics stuff!’ The privacy-loving mother of Alexandria Ocasio-Cortez whips up lasagna as she tells how she had to flee New York because of high taxes and gushes about wedding bells for her daughter

As New Evidence of Progressive Bigotry Emerges, Jack Phillips Finally Wins His Case

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Show transcript

OK, I’ve got a story here for you cat lovers. I also have a story for you health care cost enthusiasts. And yes, it’s the same story. Really.

Jeannette Parker saw a stray cat walking around a neighborhood just outside of Florida’s Everglades National Park. It looked sickly so Jeanette wanted to give it something to eat. She went to give it some tuna, but the cat bit the hand that fed it. Because it broke the skin, and there had been warnings from Miami-Dade County about rabies, she washed off the cut and, since the health department was closed for the day, she went to the emergency room.  She spent about two hours there, and got two types of injections and an antibiotic. She never talked with a doctor.

Then she got the bill. It came to $48,512, with $46,422 of that total for one preventive medication. That was an injection of 12 milliliters of rabies immune globulin, an antibody that kick-starts the immune system to provide protection from the virus until the vaccine kicks in. If you convert that to dollars per gallon, it comes to $14,643,820! It sounds like instead of going back to the gold standard for our currency, we could just stockpile rabies immune globulin and stash it in Fort Knox.

Needless to say, that seemed a little high to Ms. Parker.

Now, it is a complex product to make. It’s made from blood plasma donated by volunteers who have been immunized against rabies. There are 3 companies that make it, there are no current shortages of it, and the average wholesale price is $361.26 per milliliter. That comes to about $4,335 for the shot she got. But the hospital routinely charges that higher rate for the shot. However, we’ll be getting back to that.

Ms. Parker wound up paying $4,191 for that visit, most of that being her 10% share of the charges accepted by her insurance company. As she noted, her funeral would’ve been cheaper. (Well, except for the casket, but that’s an entirely different story.)

So where does this massively inflated charge for the shot come from? I have a video in the show notes done by Adam Conover as part of his series “Adam Ruins Everything” that explains what it is. All his videos are informative and entertaining (though sometimes I don’t think he’s giving us the entire story). Anyway, he tells us that hospitals used to be more free market, charging just a bit more for a procedure in order to make a profit. Then came…insurance companies. They wanted to negotiate cheaper rates but the hospitals couldn’t afford the cut rates, so the two got together and came up with a fake set of prices called the “chargemaster”. Each hospital keeps its own chargemaster list with highly inflated prices, and insurance companies base their advertised discounts off of that list. I’m sure that’s something of a simplified example, but these chargemaster are a real thing.

So insurance companies are one of the big reasons health care got out of the free market. Someone else was paying, and the real prices were a secret, so the consumer was insulated from knowing and mostly even caring about the prices. Does this sound familiar? What has happened to the price of college since the government started subsidizing it?

Anyway, the hospital that Ms. Parker went to used the price on their chargemaster to do the billing. But for too many, the solution for overly inflated prices is government intervention to go deeper into the rabbit hole of insurance. “Medicare for all”, the Democrats shout. Really? The same insurance plan that is losing doctors who accept it because the payments are way too small? That’s the solution?

Well, let me tell you what happened recently. Shortly before January of this year, the Trump administration made some new rules regarding Obamacare. One of them said that hospitals must put their chargemaster numbers on their websites. No interference in the market, just the transparency that a free market needs. Oh, we’re not nearly back to free market health care, but get this; amazingly (or not), the hospital that Ms. Parker used adjusted its price for that shot from $46,422 down to $9,900 faster than a cockroach scurrying away from the light. Still rather high, but not insanely so. And all this from a simple return to one of the requirements of a free market.

Maybe, just maybe, this free market thing isn’t such a boogeyman after all. It would be nice to give it more of a try.

This is the story about Blanca, the financial problems she faced, and how she survived and escaped her bad situation.

Blanca lived in the New York City area. When her husband dies with no life insurance and outstanding medical bills, Blanca almost lost her house. But she worked out a payment plan with the bank, and she wasn’t evicted.

“I was cleaning houses in the morning and working as a secretary at a hospital in the afternoon. I was working from 6 am until 11 pm. And I prayed and prayed, and things worked out. After the children graduated from college, I figured it was time for me to move to Florida.”

So after thing had worked out, she bailed out of New York. Any particular reason why at that point? Why yes. “I lived in the New York area for most of my life but I started being unable to afford it. I was paying $10,000 a year in real estate taxes up north. I’m paying $600 a year in Florida. It’s stress-free down here.”

Of course! High taxes can be very stressful, especially in New York City. But she had to leave, even if her famous daughter still lives there. See, Blanca has taken to signing her name these days as “BOC”, and her famous daughter, AOC, Alexandria Ocasio-Cortez, is ironically in favor of much higher taxes. And, of course, much higher stress.

I guess Mom ain’t moving back anytime soon.

Just a quick note about the Jack Phillips “Masterpiece Cakeshop” story. The Colorado Human Rights Commission had charged him again when he refused to do a cake for a “gender transition” event, a complaint that came in on the very day he won his Supreme Court case. I had waited to see if this got any traction before talking about it since I’d given it a lot of time already. Well, the Commission backed down. The link is in the show notes for this bit of good news on the Religious Freedom front.

Filed under: Economics & TaxesGovernmentHealth Care