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The Healthcare Game
Given my usual warning, I don't want to discuss politics in my writings for two reasons: it bores me to death and I'll upset 55% of my readers. But an investor cannot ignore politics especially today. What happens in Washington doesn't stay in Washington.
In his healthcare proposal President Obama is using a tactic described in behavioral finance as anchoring. Here’s a real life example from my married life. Let’s say I buy an expensive toy (usually a geeky one like an electronic gadget) for $300. My wife will ask me how much it is, and I’ll respond with $600. With a stunned look on her face, her reaction is typically “You paid $600 for this?” I then come back with, “What would you say if it was $300?”
Her answer is usually something like “Ok, that would be a good price,” and I’ll finally admit I lied and that it is $300. She’s not upset with me anymore and everyone wins. I anchored her at the higher price ($600) and then the lower ($300) now seems like a bargain.
Mr. President is doing the same thing. He asked in his healthcare bill a lot more than he knows he could possibly receive. So anytime he is giving up something, like insurance companies’ right to exist, he is "compromising" and republicans and taxpayers claim a small victory. This is important. The President knows he won't receive everything he asked for. He knows that the public option (a government insurance competitor - an Oxymoron if ask me) was a “no go” from very beginning. And thus he'll "compromise" it away with cooperatives.
As dust around the healthcare bill begins to settle, we are seeing hints that health insurance companies will not be euthanized and in the worst case, they may have to compete with cooperatives. Let me tell you this. As a guy who spent half of his life in Russia and has seen cooperatives, this is an antonym to competition. I have yet to meet a person who adores his HMO, but for-profit HMOs are a better evil and more importantly, more efficient than not-for-profit cooperatives. I am buying HMO stocks.
Vitaliy N. Katsenelson, CFA, is a portfolio manager/director of research at Investment Management Associates in Denver, Colo., and he teaches a graduate investment class at the University of Colorado at Denver. He is the author of "Active Value Investing: Making Money in Range-Bound Markets" (Wiley 2007). To receive Vitaliy's future articles my email, click here.
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We're all finally beginning to wake up to reality. We have a Charlatan in Chief!
The rural utilities are classic socialist structures. Fortunately most are set up a purely distribution operations. They receive subsidized wholesale power ( BPA TVA et al ) and meter it to the farm economy.
TD,
The problem with straying from your reasonable disdain for politics is that your arguments aren't helpful: not to the public need to access to health care, not to the administration working on the problem, and not to the opposition.
Unless you just want to jump on the bandwagon of a contentious topic for the 'hits.'
You get sophisticated finance people commenting like the dupes showing up at tea bag meetings.
As this post was not by TD you are less informed than said Dupes.
Nonsense. Nonprofit co-op is an oxymoron. A co-op is a private member-owned profit-making business with a limit of one share per person. A nonprofit is not member-owned, is public-sector, and is in effect quasi-governmental.
Non-profits are a good fit with the Conrad plan and co-ops are not.
And do not insult us with your stalinist pseudo-co-ops.
Isn't one of the stated goals of Healthcare reform removal of the profit motive? (Can't help but wonder -- what then would be the motivation for whomever is managing healthcare? Psychic satisfaction at cramming in that marginal elective boob job for Pam Anderson? that marginal liver transplant for Joan Rivers?)
Let us suppose for a moment that 16% of GDP pays 16% of Federal Tax Revenues.
Just where is the Fed going to replace 16% of tax revenues?
On another note, I overheard a couple of vets happily anticipating VA care being made the only option for everyone in the U.S.
Great to know that One flew over the Cuckoo's nest was written while Ken Kessey was an inpatient at a VA Hospital.
Good times to come to us all!
euthanizing the health inusurance is good for your health.
Single Payer Now!
Short health care stocks on the pushback.
This thread needs to face reality. The US system needs to change BECAUSE we cannot afford it. One major reason wages have flattened is because of the 8.4% per annum increase of the cost of that "employer-funded" option. That money goes to wage cost for the employer.. but you don't see it.
Of course, that means you'd have to carefully consider what Obama has to say - so just continue to obfuscate, deny, and stick your head in the sand!
Where do I get 8.4% from?
http://www.cnn.com/2009/POLITICS/08/18/reinhardt.health.inflation/index....
Duh. We quit buying and the price of healthcare drops.
Just like government support of student loans. Guess what happened. We got lots of students.
Take away the subsidies to healthcare and let people bring the cost down through decisions and let charities, not government deal with the needy.
Somes of the biggest contributors to healthcare costs are the student loans to med students, and the limitation on the number of seats in medical schools. That along with defensive medicine, and the subsidy of medicare and medicade by insurance providers.
Government takeover of healthcare will truly mean that we will pay far too much. Both in terms of cost and delivered care for the price.
I'm not sure how well a cooperative set up by the government would work, since it may be saddled with all kinds of requirements that don't exist now. But there ARE health insurance cooperatives in the US right now. They work great.
I had to get insurance for my employees in Wisconsin. The cheapest and best care I could get was through Group Health Cooperative. They blew all of the private firms out of the water by a wide margin on every metric - price, coverage, independent ratings - you name it. They even covered a lot of pre-existing conditions without attaching riders.
We could go on all day about how fucked the system is, and the reasons why, but bottom line is if any new plan costs government money, we can't afford it. A few thoughts about health care:
- Unlike virtually everything else in life, we don't pay for health care ourselves, so normal competitive pricing doesn't come into play.
- if we did pay for it ourselves, maybe we wouldn't be such fat, cigarette smoking fucks. Maybe we would actually take care of ourselves, and avoid the doc's office like the plague ( except for yearly physicals once we hit 40 ).
- we could then just have "normal" insurance, like for our cars and houses- insurance to cover just big money situations like surgery. Normal insurance wouldn't cost much.
- If we had to pay for drugs, all that bullshit on TV ( anti-depressants; cholesterol; inconvenient pissing, etc ) would go away. People have lived for millenia without that bullshit, it's all Madison Avenue.
- If we paid for our own health care, we'd have run the trail lawyers out of there by now and malpractice insurance would be a thing of the past for the most part.
Wonder why the housing projects never worked? Because when people don't have to pay for shit themselves, when normal market forces are eliminated, the systems are always abused.
Look, we all like employee benefits but this has caused a big part of the problem. Give us the money instead; that money is tax-free, like now; and let us go shopping ourselves. But for normal insurance, to cover big money emergencies not every little thing.
Excellent post. If only we paid our taxes ourselves, too.
That's what I have now with HSA/high deductible plan. They will destroy this?
Three comments:
1. US.Healthcare Payers can not go away in in the near future. The system is not prepared to handle such a change. I am not sure buying the index, would be prudent. Interestingly, some of the bigger ones are diversifying internationally with some success (to countries that have national payer systems).
2. Isn't this administration's technique just like any other bill creation? .... there's some joke about making sausage that is relevant.
3. Finally, I just hope he will go the same direction with Ethanol.
(repost under member id)
I heard Obama gave up out of the program the 100 hours of therapy assured to males who has seen their mother naked.
please file this post under:
"How to Drive Internet Traffic"
the column is ot, current and provides a rationale for being long hmo with a little negotiation 101 thrown in for insight. file that under potentially useful.
Three comments:
1. US.Healthcare Payers can not go away in in the near future. The system is not prepared to handle such a change. I am not sure buying the index, would be prudent. Interestingly, some of the bigger ones are diversifying internationally with some success (to countries that have national payer systems).
2. Isn't this administration's technique just like any other bill creation? .... there's some joke about making sausage that is relevant.
3. Finally, I just hope he will go the same direction with Ethanol.
What is the point of this thread?
The government already sets compensation for ALL medicine - through Medicare. 100% of private healthcare insurance companies set as their baseline the Medicare compensation rates. Unless the strawman is that "Medicare is going to be eliminated," there's no information.
The place where .gov intervention would be useful is in the regulation of insurance companies.. to get them to actually pay when it's warranted.
Ever wonder why your ED bill is measured in the hundreds of dollars? Not because of the 20 total minutes of labor from one nurse at $35/hr (total labor cost: $20, at best, including bezzle) but rather because hospitals bill insurance companies with the expectation that they will be reimbursed for only 3 out of every 10 patients. Why? Nobody is forcing the insurance company to pay out.
Health care is expensive in America purely because the insurance companies don't get regulated like the public utility they should be.
Not because of the 20 total minutes of labor from one nurse at $35/hr (total labor cost: $20, at best, including bezzle)
good articles;
sleazy linking practices; borderline fraud ..http://www..
hat tip: gay porn and deceitful, slimy operators
don't forget the cost of defensive medicine. Docs would rather "order (tests) up" than "lawyer up"
yes! then also factor in the tests, etc done because docs would rather "order up" rather than "lawyer up."
I disagree with your entire thesis, because health care is just one aspect of the grass roots anger. The tea parties and town hall meetings are an outlet of anger and frustration with our government gone insane on all economic fronts:
- we cannot afford any changes to health care that cost money
- we cannot afford any more foreign wars
- we cannot afford cap and trade
- we cannot afford to increase our national debt every fucking quarter
- we cannot afford to bailout banks, businesses, and everything under the sun
Even folks who don't understand economics, politics, governance, or haven't paid too much attention, sense things aren't right and are fed up. They may not understand the details,but connecting the dots of unemployment and out of control government spending, bailing out their elitist buds, etc. isn't all that hard. This not about Dems vs. Repubs, people are seeing beyond that finally. It's about the plutocracy vs. eveyone else.
Affords got nothing to do with it. The medical system is a resource. Either it takes care of everyone or it doesn't. Ya if it's forced to handle more people it's going to have to give up hail mary 1 percent efficacy treatement options becasue they are a waste of time and resources but never confuse the underlying resource with the monetary system it operates on. Either the doctors can give up screw up girls titties and actually do some doctoring or they decide they can't.
When one's "movement" is subsidized by the likes of United Healthcare, CIGNA, and an ever-growing list of lobbyists, it is not a grass-roots anything. Astroturf at best, but it really isn't even well enough disguised to call it astroturn.
The tip-off that single-payer is good for people is the simple fact that is has every middleman who takes a bite out of every health care dollar screaming as if hot needles were being stuck in their eyes. Anyone who thinks that the suits at UNH are looking out for your best interests is deluding themselves.
That said, you are right about your bullet points:
- we cannot afford any changes to health care that cost money
- we cannot afford any more foreign wars
- we cannot afford cap and trade
- we cannot afford to increase our national debt every fucking quarter
- we cannot afford to bailout banks, businesses, and everything under the sun
When one's "movement" is subsidized by the likes of United Healthcare, CIGNA, and an ever-growing list of lobbyists, it is not a grass-roots anything. Astroturf at best, but it really isn't even well enough disguised to call it astroturn.
The tip-off that single-payer is good for people is the simple fact that is has every middleman who takes a bite out of every health care dollar screaming as if hot needles were being stuck in their eyes. Anyone who thinks that the suits at UNH are looking out for your best interests is deluding themselves.
That said, you are right about your bullet points:
- we cannot afford any changes to health care that cost money
- we cannot afford any more foreign wars
- we cannot afford cap and trade
- we cannot afford to increase our national debt every fucking quarter
- we cannot afford to bailout banks, businesses, and everything under the sun
Call it a tax or call it 16.3% of our GDP we are currently paying too much for healthcare. Our current system is broken and I love the single payor alternative to scare the sh!t out of insurance companies to take action. If they don't take enough action to reduce costs, screw them and let's go with the single payor system. Private insurance has run healthcare long enough and look where it has gotten us --- 16.3% of GDP, 47M uninsured, sub-optimal healthcare, costs outstripping inflation.
We pay too much because we want to.
All the damn socialists want is to tell you what you want and what you need because you are too stupid to know what you are doing.
Go away.
Repeat after me: "tort reform", "tort reform", "tort reform". The only way to get a handle on costs is to get the damn lawyers and their 100% accurate ex post facto diagnoses and multi-million dollar awards out of the system. Then doctors will begin to treat people on the basis of their symptoms, and not their fear of lawsuits. That would eliminate the billions of dollars in unnecessary tests that are performed each year.
this is what they dont tell people when they talk about the awesome uhc in europe: medical malpractice suits are a joke compared to the us (due to the no-fault rules and caps on damages)
doc removes a healthy internal organ without consent in germany: €3000 fine and no criminal charge
same thing happens in the us and you're off to the 6 digit race
obama healthcare is doomed to fail
sleazy linking practices; borderline fraud ..http://www..
hat tip: gay porn and deceitful, slimy operators
I don't think that cooperatives in Russia or the Soviet Union are a good analogy. The not-for-profit cooperative form of organization is common in some US sectors, particularly in agriculture and in rural utility service, and it tends to work quite well in those sectors. What it might do when applied to health "insurance" (long a misnomer for a prepaid funding arrangement) on a statewide basis and competing against the likes of Aetna is unknown, but I wouldn't dismiss the co-op arbitrarily.
I'd like to hear a concrete example from a healthcare coop in Russia to get a clear idea of what the author means....
On second thought, never mind. My over-active imagination is grossing me out.
A farmers co-op is a for-profit entity. However it is taxed as if it were an S Corp... the profits flow through to the farmers one way or another.
The rural utilities are classic socialist structures. Fortunately most are set up a purely distribution operations. They receive subsidized wholesale power ( BPA TVA et al ) and meter it to the farm economy.
The politics involved in them is considerable. Only the very low cost of their wholesale allotment makes it pencil out.
A farmers co-op is a for-profit entity. However it is taxed as if it were an S Corp... the profits flow through to the farmers one way or another.
The rural utilities are classic socialist structures. Fortunately most are set up a purely distribution operations. They receive subsidized wholesale power ( BPA TVA et al ) and meter it to the farm economy.
The politics involved in them is considerable. Only the very low cost of their wholesale allotment makes it pencil out.
I am not sure lying is the best example of anchoring. More appropriately would be to suggest that the ipone cost $600 initially. But they lowered (umm like 12 hours later) the price and you bought it for $300.
No one is fooled by the fool in Chief. We understand the game in DC and it is well nigh done.
We have some extremely angry folks walking around right now. Angry at both parties. Angry at politicians...bureaucrats and lobbyists.
To hell with all of them!