patrick.net

Everyone can look at the insurance companies all they want, but it's the cost of medical services that's the crux of the problem. If mechanics were to charge $15,000 to replace your windshield, you can bet that your auto insurance premiums would be a hell-of-a lot higher than they are today. Providers/hospitals are setting the prices...insurance companies just discount from there as much as possible, and Medicare/Medicaid pretends their prices never existed.

debyne says

Everyone can look at the insurance companies all they want, but it's the cost of medical services that's the crux of the problem.

Yeah, it is a fierce competition, which racket amongst these interlocking corrupt cartels is the most egregious?
I imagine this entire predatory enterprise was teetering after years of exponential growth, feeding off the formerly prosperous middle classes.
Hence the government wing of Corporate America steps in and mandates participation.
I wonder how long this latest conscienceless wealth extraction will last.

Heraclitusstudent says

Tim Aurora says

1. Home is an appreciating asset while car is a depricating asset

How many 1oo yrs old houses do you see around you?

Houses do have a limited lifetime, and are in fact depreciating.

I don't know in what sense one could say that a home is an "appreciating" asset.

A home is a commodity. More can be built as needed. Building costs are not increasing faster than inflation. And there is a lot of land to build. There is absolutely no rational reason for home prices to "appreciate" over time, in real terms - except maybe from a speculative perspective.

Some places have a shortage of land and are always in high demand. Prices here will continue to outperform all other places. New York, London, Paris, coastal California to name a few. If you buy and hold in these locations, you will come out ahead in the long run.

Strategist says

Some places have a shortage of land and are always in high demand. Prices here will continue to outperform all other places. New York, London, Paris, coastal California to name a few. If you buy and hold in these locations, you will come out ahead in the long run.

Outperform like in 2008? This time is different! ;)

debyne says

Providers/hospitals are setting the prices...insurance companies just discount from there as much as possible, and Medicare/Medicaid pretends their prices never existed.

Sorry to interrupt you with reality but that's exactly backwards. M/M sets the rates which drives the insurance companies rates. Read up on Centers for Medicare and Medicaid Services.

mell says

Strategist says

Some places have a shortage of land and are always in high demand. Prices here will continue to outperform all other places. New York, London, Paris, coastal California to name a few. If you buy and hold in these locations, you will come out ahead in the long run.

Outperform like in 2008? This time is different! ;)

Not different at all. Over a period of 10 to 20 years you will come out ahead, with the 2008 crash being the greatest buying opportunity since the Great Depression.

Strategist says

mell says

Strategist says

Some places have a shortage of land and are always in high demand. Prices here will continue to outperform all other places. New York, London, Paris, coastal California to name a few. If you buy and hold in these locations, you will come out ahead in the long run.

Outperform like in 2008? This time is different! ;)

Not different at all. Over a period of 10 to 20 years you will come out ahead, with the 2008 crash being the greatest buying opportunity since the Great Depression.

You can say that about everything that tracks inflation and is supported heavily by the Fed/gov. monetary "policies" (= counterfeiting). That's why the DOW is at all time highs. As long as there is no fundamental economic prosperity the next crash is always lurking around the corner. Stocks at least you can sell with the click of a button, houses are far more illiquid and therefore riskier. Of course if you have the time and the talent to be a landlord that can change the dynamic in your favor.

Mel says:
You can say that about everything that tracks inflation and is supported heavily by the Fed/gov. monetary "policies" (= counterfeiting). That's why the DOW is at all time highs. As long as there is no fundamental economic prosperity the next crash is always lurking around the corner. Stocks at least you can sell with the click of a button, houses are far more illiquid and therefore riskier. Of course if you have the time and the talent to be a landlord that can change the dynamic in your favor.

You probably could. The 2008 crash was a half off sale on something guaranteed to go up over time. It happened before, and no doubt will happen again.
I'll be waiting for the next one with a bag full of money. Hopefully 10 years from now.

curious2 says

Once patients have paid for the mandatory insurance, they tend to stay in network, where co-payments may also be subsidized. It is very difficult for independent doctors to compete with insurance networks.

makes sense.

Tim Aurora says

mell says

Outperform like in 2008? This time is different! ;)

By taking a very small sample data of any asset you could make a case either way. However you need to average it out over a period of time.

The ones on this forum advocating continued monetary intervention and higher taxes for "wealth-redistribution" argue that a deflationary spiral would not make prices go up over a very long period of time. I'd be "worried" holding RE (or high-beta stocks) that when the Fed runs out of bullets, then it is entirely possible that prices come back down and stay low for a long time - which I would take as a good thing as they return to their intrinsic values.

Oh god - the Cato Institute.

As flawed as the new law may be, it's better than nothing. It's obvious why low income people would sign up - they can't afford health care insurance under the broken, old system. Unless we do something about the 46 million without health insurance, we have no right to call ourselves an "advanced" country.

This may be the first step toward single-payer, which where we really want to go if this country is to be more equitable and less divided by class. Remove the bloodsucking insurance industry, change the laws so that Medicare can negotiate drug prices, limit the high-tech toys that add lots of cost and little value in terms of patient outcomes, and maybe we'll see even further slowing of health care inflation. It's already slowing down, probably in part because of this law.

It would give me a migraine to watch for an hour.

Personally, I like drugs. Drugs are awesome - and they work very well. Many insurance plans limit the amount they'll pay for to #4 per month - but if a pharmacy price matches the Walmart deal (most of the larger ones do), you can get a 30-day supply (which according to them is nine) for $4.00. This applies whether or not the patient has health insurance.

A true migraine is a horrible thing. It's not a chronic pain or headache problem - it is believed that there are many causes:

"The exact causes of migraines are unknown, although they are related to changes in the brain as well as to genetic causes. People with migraines may inherit the tendency to be affected by certain migraine triggers, such as fatigue, bright lights, weather changes, and others.

"For many years, scientists believed that migraines were linked to expanding and constricting blood vessels on the brain's surface. However, it is now believed that migraines are caused by inherited abnormalities in certain areas of the brain.

"There is a migraine "pain center" or generator in the brain. A migraine begins when hyperactive nerve cells send out impulses to the blood vessels, causing them to clamp down or constrict, followed by dilation (expanding) and the release of prostaglandins, serotonin, and other inflammatory substances that cause the pulsation to be painful."

There are many "triggers" as well. The OTC medications such as Tylenol migraine is a mixture of Tylenol, aspirin and caffeine. This is little consolation if you're sensitive to light and movement, puking your guts out and feel like you're dying inside.

http://www.webmd.com/migraines-headaches/guide/migraines-headaches-migraines

i see how they use motion sickness to combat migraines. genius idea.

The $100B/yr new-gold market ($1200/oz x 90e6 oz) takes 0.14% of global GDP.

That's about the right asset allocation, a person clearing $100,000 should buy a $5 Eagle every year . . .

tr6 says

I do not understand mining industry well and many pundits claim this as a reason that a supply of gold will go down sharply if prices drop below 1200.

Quite a support has been created at the 1200 level, or a little above.

I think it's going to be interesting to see the price action if and when when it drops below key support levels.

Have miners been stockpiling gold, to avoid causing a vicious price drop? Or because they are waiting for those higher prices to return? How about other interests propping up prices with futures or longer term forward contracts ?

If these things have been happening, and if the price needs to be lower, it could be a somewhat violent drop once it breaks through.

Has this little consolidation move of the past 6 months between $1200 ad $1400 been one of accumulation or distribution ?

marcus says

Have miners been stockpiling gold, to avoid causing a vicious price drop? Or because they are waiting for those higher prices to return? How about other interests propping up prices with futures or longer term forward contracts ?

I'd assume Goldman Sacs has a few bars stashed somewhere...

bob2356 says

Sorry to interrupt you with reality but that's exactly backwards. M/M sets the rates which drives the insurance companies rates. Read up on Centers for Medicare and Medicaid Services.

Sorry to burst your pseudo-reality bubble, but providers set those prices.

http://www.marketplace.org/topics/life/health-care/world-health-care-pricing

curious2 says

Yes, but because they don't take insurance, their patient base will be limited to people who still have enough left over after paying for the mandatory insurance.

Or those who are paying the penalty since it's cheaper.

Almost all of the rise in the FIRE sector economy is due to the continued Fed action. I don't disagree that on a deep crisis like in 2008 the markets overshoot on the downside, but the majority of the pull is Fed action to this day. Look at the dollar which cannot even compete with a crap currency like the Euro, make no mistake the big debasement is afoot and there will be another crash due to these actions. It is irrelevant how deep that crash will be, it is likely that it will not reach the lows of 2008, but that is of no consolation as inflation made the dollar worth far less.

Heraclitusstudent says

How many 1oo yrs old houses do you see around you?

Houses do have a limited lifetime, and are in fact depreciating.

I see quite a bit around me. In every area I've lived in there were always nice neighborhoods/towns that had 100+ year old homes. And they were very desriable.

In any event--the wood and nails don't appreciate. The land does.

debyne says

bob2356 says

Sorry to interrupt you with reality but that's exactly backwards. M/M sets the rates which drives the insurance companies rates. Read up on Centers for Medicare and Medicaid Services.

Sorry to burst your pseudo-reality bubble, but providers set those prices.

http://www.marketplace.org/topics/life/health-care/world-health-care-pricing

Be nice is you actually read what you posted. The rvu committee sets a value. The CMS (medicare) sets the price, which may or may not be the rvu value. The vast majority of insurance companies follow medicare since doing their own calculations for thousands of procedures would very costly.

Someone has to calculate what things cost, the people doing the work are usually the best resource. Who do you think would do a better fairer job of setting prices or are you just someone who sees everything as a vast conspiracy to complain about?

What industry are you in and who sets your prices?

For a couple of years when I was living in the middle on nowhere, I was a practice administrator for an OB/Gyn. Every provider contract with an insurance company I've ever seen was a percentage of Medicare. So if a provider is on the Blue Cross roster, he/she agrees to be reimbursed at (for example) 120% of Medicare rates. This was the case with every provider contract I've ever seen. Where there's room for additional money to be made is in the coding. There are ways to code things that are better than others. It's become rocket science.... and an increasingly expensive function of a doctor's office.

Given that, many have gone the out-of-network route. The reimbursements are much better. However, this typically means more out-of-pocket to the patient.

But these higher reimbursements available to out-of-network providers has led to some questionable practices among facilities (like surgery centers). There's one particular group of surgery centers (located in the Bay Area) that is currently in litigation with Aetna. Here's what they do:

They are out-of-network for all insurance companies.

They look for patients who need surgery who have out of network benefits.

They perform the procedure in their surgery center and then charge some truly outrageous fee for the surgery (Like $66K, for a bunion removal).

Then, they collect the out-of-network percentage on the outrageous total.

This is the best part.... They never make the patient pay any co-pay, deductible, or anything. Why? Because they extracted a fortune from the insurance company. So for what's probably a couple of thousand dollar procedure, they're getting $30k. The insurance company has no idea that the patient never contributed their deductible, so the insurance company assumes that the patient met the deductible (which affects future treatments, too).

The surgery centers make out like bandits, the patients don't pay anything... it's quite a deal. Aetna caught on and is pretty pissed. They aren't the first to sue for this practice (there's another in New Jersey) but the outcome of this case could have some serious impact on the practice in California, at least.

I agree that the practice is completely dishonest. It's just funny to see someone best the insurance company.... However, we will eventually pay for it with higher insurance premiums.

Anyway... Here's an article on the story if you're interested in following it:

http://www.bloomberg.com/news/2012-02-03/bunion-repair-at-66-100-spurs-aetna-lawsuit-against-clinics.html

bob2356 says

Be nice is you actually read what you posted.

That's the pot calling the kettle black:

"...who do you suppose sets the price of individual medical procedures? If you said insurance companies or the government, you're only half right. Because the prices your insurance company pays are based on a set of values listed in a phone-book sized directory of billing codes. Those codes are pretty much the economic hierarchy of modern medicine. They say what's costs more: a colonoscopy or a CT scan or chemotherapy? And those values are set by a closed-door committee of the American Medical Association.

I already said that M/M sets their own prices...read my original post. My additional point is about how private insurance companies get theirs...it's NOT based on prices set by M/M. If they all were set by M/M, doctors would go out of business.

But what about the NAR Code of Ethics? Doesn't that protect the public?

You have to look at the greater good, how many atrocities do American presidents commit that we never hear about?

You also have to consider the context of his circumstances, many leader of the past would make Pinochet look like a boy scout.

Again it is like an aircraft carrier it takes time to get these things going especially when it was previously a socialist country.

sbh says

You favor definitions quoted as scripture from within a black box of factual ignorance and denial. Axiom trumps fact for you simply by the act of your speech.

I like to think of it as having a professional view point verses having a practical view point.

The problem is that there is so much specious information out there.

I heard it said that there were only 6 Ausrians a hundred years ago.

bgamall4 says

tatupu70 says

It's clear from this video that the biggest problem in the US is the fact that the bottom 25% of citizens don't pay any taxes.

Only to a madman. You apparently are going crazy. (edit) the post was being sarcastic and I didn't catch it. My apologies.

He is just being sarcastic.

You know "those people" like all kinds of Nanny State Big Gubmint Socialist programs.

WOW! The UNtrustworthy are certainly in control of what information is apparent to the people!

Say hey! This was in the Wall Street Journal on March 30, 1999. Note "... how much it will buy."

Holy cow/interesting/compelling ...!

And where is it up to date??? Right here ... see the first chart shown in this thread.
Recent Dow day is Monday, December 9, 2013 __ Level is 102.5

WOW! It is hideous that this is hidden! Is there any such "Homes, Inflation Adjusted"? Yes! This was in the New York Times on August 27, 2006:

And up to date (by me) is here:
http://patrick.net/?p=1219038&c=999083#comment-999083

WOW! The UNtrustworthy are certainly in control of what information is apparent to the people!

And http://patrick.net/?p=1230886

sbh says

You favor definitions quoted as scripture from within a black box of factual ignorance and denial. Axiom trumps fact for you simply by the act of your speech. It's like talking to an evangelical who's only argument against the concept of deep time is to quote the Bible. No wonder math and representations of measurement creep you out. Fuck facts, let's pray!

Statistics do not equate to fact. Lies, damned likes, and statistics :-)

When a Keynesian observes the rooster crowing 10 days in a row ahead of the sun popping above the horizon, he concludes the rooster causes sun to rise above the horizon based on the 100% correlation.

An Austrian would interject that the rooster is only an observer responding to whatever other phenomenon preceding the sun rise.

The Keynesian then gives the prescription that, in order for the sun to rise earlier, we can go molest roosters in their sleep! simply because their crowing would lead to the sun rise!

Ahem, and I quote myself:

http://patrick.net/?p=1234352&c=1026966#comment-1026966

I'm not convinced at the moment that Zimmerman is guilty of domestic violence. The whole case seems a bit fishy.

And this from a guy that is quite convinced that Zimmerman murdered Trayvon Martin.

I never in a million years would have thought I would be defending George Zimmerman. But I severely disapprove of false accusation of domestic violence or any other crime.

Now, if only the authorities could find some new evidence against Zimmerman in the Trayvon Martin case, at least there could be a civil case against him.

Should make US companies more competitive.

Call it Crazy says

I wonder what they will say now???

There will be resounding silence.

In contrast, when President Carter bailed out Chrysler, the bailout consisted of loan guarantees, and the taxpayers earned a $350 million profit.

The times, they are a changing.

werent there a bunch of people on this blog claiming that we made money from the bailouts???

So what's the solution?

bgamall4 says

Strategist says

So what's the solution?

House prices have to decline, to reflect the loss of wage power. In the meantime, families have to band together to live multigenerationally or with siblings or many will die very poor.

Falling house prices will mean less construction of new homes, which means a shortage of homes, which means higher rents.
Are you sure you want that?

A big house like that, in a wonderful area like that, with a rate that low.
I wish I had that problem.