patrick.net

Today's Zero Hedge posting on the news page is sobering. I know someone in LA who had a paid off house, but in 2007 took out a $700K mortgage to fund the purchase - with minimal down payments - of five pieces of commercial real estate. I told him at the time that he was going to regret this action. In his greed and hubris he told me to shut up, that real estate always goes up, and that he was going to be "rich". Zillow now estimates his house is worth $630K so he's underwater on that, and I would presume the same with those five commercial properties. Commercial mortgages have extremely short terms of five or ten years, so possibly the piper will need paying in 2012.

Danville, Interesting comments about the medical profession -- what is the most common reason for regretting being an MD? What I have heard is that around Silicon Valley they are displeased for not automatically landing on top of the social (or should I say financial) hierarchy, but there must be more to it than that?

DennisN, Yeah, wondering how your old buddy was getting along? Over the weekend the wife and I took stock of all the personal impacts we've had to endure as a result of the HB and the list was staggering! From meddling in-laws trying to pawn off a failed flip on our daughter and SIL to our local bank cratering to being painted into a corner on a property we simply didn't want to buy. Those were just a few of the highlights. When you factor in all the people she no longer... works with and the smoking hole that was once a stock market, it's easier to calculate what aspect of your life *wasn't affected by this crime wave? Along with the oh-so-predictable embracing of a "return to the basics".

@Justme The docs I work with at a large HMO are squeezed tighter than I am because they don't belong to a Union. I work 10 hour days (get paid for 8) and they are there even longer. The pressure to produce numbers showing high productivity, high patient satisfaction, and high safety is overwhelming. At the moment, most of the old time docs are gone and we have a group of new young ones. Wonder how long before they burn out. I can only cope with this myself by working half time.

Danville, I see the picture. From the patient side, there is also lack of satisfaction and also concerns about quality and safety. One can hope that modernization an automation will help some, but I am not convinced. The basic problem is that we already spend more per capita than any other nation on healthcare, and we get less in return. In other words, SOMEBODY is making off with the money, and perhaps the wrong people. One of my observations as a patient is that I do not have a good understanding of how the system works internally at the medical offices and clinics. That is, I do not understand the internal motivations (financially and otherwise) for providing or not providing certain forms of care, and so on. Knowing more about this would be helpful. I suppose this is one form of transparency that we could need. It is similar with lawyers, I think. Unless you have spent 5 days a week inside a law office one would not understand how lawyers really operate.

justme: As with many oddities in our current situation, dig into your history. Before the '50s, very few people had health insurance, you went to the doctor, he did what he thought was right, you paid him and went home. End of story. Doctors had prestige, were leading people in their communities, made boodles, and most everybody was happy. We also had the best health care in the world. Enter taxes: Higher Incomes were being taxed at marginal rates that exceeded 70% (and for a while exceeded 90% in some cases). Companies found other ways to compensate their executives, one of them being paying for their health insurance. Loophole. Gradually extended to more of the base White-Collar folks, and also demanded by Unions, etc. Also at the same time, the other end of the spectrum was covered by Medicare/Medicaid by huge expansions in Johnson's Great Society spending spree. We were getting stories of Medicare/Medicaid denial of service and fraud throughout the '70s. Meanwhile, the prestige and remuneration of being a Doctor start going out the window, while prices sky-rocket. What happened? What do you think happens when you put a third party between the payer and the payee? The third party, be it Medicare, an insurance company, an HMO, whatever, starts to think it is *their* money, and so they are reluctant to pay out. The first thing a bureaucracy will say is "no!" And then there is a huge amount of money involved, centrally located, which invites fraud and corruption. And they take their tithe, which causes prices to go up. And then, since the proceedures, drugs, office visits, etc. are "covered", their prices can go up far beyond what the average person could actually pay out-of-pocket. A Medical Services Bubble that benefits no one but the Financial institutions and the Federal Government. Which is why this post is On-Topic for Patrick's housing bubble blog. Sounds awfully similar, no?

Trulia has outdated information. Unfortunately, they have the best interface. I really wanted to start throwing my mouse at the screen after wrestling with Yahoo!RealEstate. They do allow you to extract foreclosures and resales by neighborhood, which is feature that I want. But you have to scroll through several screens to get all the listings... ughhhh! Has anybody found something better for these types of searches?

MST, Respectfully, there are some aspects of the story that do not rhyme. 1. renumeration of being a Doctor start going out the window 2. HMO, whatever, starts to think it is *their* money, and so they are reluctant to pay out 3. prices can go up far beyond what the average person could actually pay out-of-pocket. 4. A Medical Services Bubble that benefits no one but the Financial institutions and the Federal Government. Items 1-2 cannot occur at the same time as 3, unless the insurance middleman takes a larger and larger cut. I doubt the insurance overhead is all that is growing. See http://www.nchc.org/facts/cost.shtml for some 2008 numbers. Item 4 does not make sense. How does the government benefit from paying out lots of Medicare/Medicaid? I think the real reason is more along the lines of aging population, status seeking MDs that all want to be specialists, and the appetite for expensive end-of-life procedures rather than preventive and steady maintenance.

On the back of my insurance card it says to call MedWatch to pre-certify. For member services call Allied. For PPO provider info call Private Healthcare Systems. For Rx info call MedCo. It usually takes 3 calls just to see if I can go to a certain doctor and about 10 calls for any type of billing issue. My only conclusion is that the executives of these 4 companies are just well dressed thieves stealing our healthcare dollars and in turn stuffing the pockets of politicians to keep the scam going…

justme, True, some of those issues no -longer- matter. MST was simply showing us 'how' we arrived 'where' we've arrived. As a kid growing up in the 60's and 70's my family didn't have Health Insurance. None. We weren't poor, it just wasn't all that common at the time. We had the good fortune to have been fairly healthy. For the life of me, I don't recall my parents complaining about medical bills, at all. That was for "old people". The other issue was that we really didn't have cafeteria plans where younger payers subsidize older users. With all that everyone's been through, a doctor's diminished sense of prestige is the least of our worries. As HC consumes an ever larger portion of our GDP year after year, at some point we have to ask ourselves if a few more years of life is worth it? IMHO.

moonmac, Thank you. And further I notice that my wife's HC Provider changes about every year. So that means another layer of benefits people in HR milking the system too. The frustrating part is that just get used to (1) system..!

moonmac, Sounds like Kaiser. I could never figure out how to work the system there. Kaiser (or the telephone bank guardians thereof ) treat the members/patients as if they are all imbeciles that are not able to tell whether they need to see the doctor or not. If I call, I have already determined that I need to see a doctor. What I need is an appointment, and pronto! Never kaiser again unless someone publishes a guide to bypass the Pretorian Guard.

Question for the group... I saw a *great* report on the coming pay-option-ARM resets which I think was archived on scribd. However, I've since lost the link. Anyone else seen this?

kewp, The most recent I could find was from Credit Suisse, circa 2007. Evidently that stuff is classified now and you and I simply don't have "the need to know"!

The Economist had an interesting article on health care last week. I will try to look it up for you, if it is online. My biggest concern is the lack of transparency in fees. On a recent trip to the dentist, I was first quoted $130, but somehow the fee ended up being $200. I asked what changed and was told, "I don't know why anyone would have said $130." So I asked for a fee sheet so that I could plan for the next visit, and I got, "He doesn't like for us to give out that information." That happens everywhere in healthcare. It is the one and only situation in which Americans regularly and happily write blank checks. Heck, I didn't care, either, until we ended up in an HSA plan. The out-of-pocket aspect leads me to pay more attention. I would love, love, love to see clinics and dental offices with a nice, clear list of fees right at the front desk. Why can't we have that?

The Oz 'single payer' system or 'socia1ised medicine' which is similar to Canada's of course also has an intermediary, but the govt simply pays up to 100% of most common procedures out of tax dollars (originally pegged at 85% back in 1975). It's not just for old people like US Medicare but everybody. Nobody is too upset about this system. I don't know if families back in the 50s just 'paid the doctor and everybody was happy' because it would have cost a lot, and a lot less illnesses could be treated successfully back then. A lot has changed in a few decades. At least Medicare can run queries on a national footing and find doctors overprescribing and overservicing and take them to task over it (as presumably can HMOs and other insurers, although I believe the health insurance system is an inferior one over the universal guarantee approach). Certain drs are hauled up to answer to the Health Insurance Commission if there is a pattern of overprescribing differing significantly from the average. Dentistry is still not covered in Oz under Medicare, only private health insurance, although noises are being made about including it. The British NHS includes many dental procedures. The Oz Medicare system is of course not-for-profit as a govt system, as is the NHS, and guarantees universal healthcare regardless of income -- this may be one of the main differences with the health insurance approach as the middleman -- ref 'Sicko'.

@EBAY guy By using www.redfin.com in combination with www.ziprealty.com and www.propertyshark.com, I can get a pretty good information on a property. However, it would be nice to have everything all in one spot.

Eliza, Excellent question! Recently I had a deviated septum corrected. I'd put it off for years ( at the risk of sleep apnea and all the baggage that comes along -with- it! ) as it had been deemed "unnecessary". After absolutely grilling the specialist's office on the -exact- amount of the out-of-pocket-cost I was given a figure of $200. I said are you sure..? Yes, we're sure. I called back 2 weeks before the procedure, are you sure? Then a week prior, are you sure? Three months after the surgery ( I'd waited at least 5 years to have done ) I got bills in the mail of over $2,000! BLAM! I'm right on the specialist's doorstep. WTF!? Uh... Low and behold, they'd -already- turned them over to collection agency, that's how I found out about it! I called the our state AG and told them this is total BS. They actually seemed a little shocked anyone had the brass to say anything? I said, look, had this been an auto mechanic or a dry cleaner or ME or anyone else you guys would be all over them like a gorilla in a cheap suit! The explanations I'd rec'd from the clinic were flimsy at best and I'm still actively contesting them. All on my FICO of course. I guess since most people just fork over the cash they have to feign surprise when anyone raises the slightest objection. I went to the local dentist for a teeth cleaning ( once ) and I now get bills in my mailbox on a monthly basis! Once!

DinOR Says: > After absolutely grilling the specialist’s office on > the -exact- amount of the out-of-pocket-cost I > was given a figure of $200. > Three months after the surgery I got bills in the mail > of over $2,000! I went in to the dentist a few years back for a cleaning and they ended up giving me a full set of X Rays. A few months later I was told that the X Rays were not going to be covered by my insurance and I got a bill for about $1K. After I didn’t have any luck talking to the dentist and explaining that I should not have to pay for something that I did not ask for I took a photo of his building (he mentioned a few years back that he bought the building) and sent him (via Certified Mail) a “Brokers Opinion of Value” form with a bill for $1,000. He called me about the bill and I told him that I was ready to take a day off work and go to small claims court to collect if he did not pay my bill, but I would be happy to forget about the bill for something he did not ask for if he would forget about the bill he gave me for something I did not ask for (I got a letter telling me I did not have to pay for the X rays later that week)…

DinOR: Exactly, the 'how'd we get here' is important. Doctor prestige? It is important: I overheard a conversation the other day. A fellow somewhat younger than me was holding forth about having seen the trends in the late 70s, how Insurance Companies and Corporations and the Governement were taking over health care, so he and his contemporaries decided that instead of going into the formerly lucrative, prestigious medical field, they would go into finance instead (I wonder how many potential M.D.s wound up on Wall Street selling CDSs). I'm in Boston, and these were Harvard types, not a bunch of dummies. There are shortages of medical personnel now. The two *are* related. Prestige as a motivator is real. Whether we like it or not, or think it is deserved, it still drives people. Agreed that MONEY is the primary motivator now. And of course we haven't touched on the wave of Medical Malpractice suits that started in the late '70s which ran off more potential MDs. (Anticipating justme's defense of malpractice litigation, I'll say it doesn't matter if it is justified; it has the net effect of heavily increasing doc's expenses and questioning their *prestige*, and therefore knocking substantial numbers of good people out of choosing medicine as their profession, and finally utterly denying some areas health care. (Areas of Mississippi were devoid of OBs for a good while there b/c they were run out of business by outrageous local jury awards.)

And by the way, DinOR. I worked at MBNA for a year. We pretty much ignored medical debts/collections on credit reports. Even credit card companies are well aware of 1) what ass-hats they have doing medical billing/insurance etc. 2) that the person may not even be aware there is a collection outstanding on his Credit Report in the first place. *Nobody* else puts $10 fees (Co-Pays!!!) into collections! Hospitals do. Doctor's Offices do. Radiologists do. I've seen 'em on the reports. Almost *no one* is completely free of them.

FAB, Good for you! ( Actually I thought a comm. appraisal was more like 5-6K at a min. ) but I like the way you made the punishment fit the crime. I just wish I'd had that kind of leverage? I suppose the reason we're a little hyper-sensitive about it is when we sold our home to begin Misadventures In Bubble-Sitting, we cleaned-out-everything! When I was going through 'bales' of cancelled checks I noticed that not (1) month went by where we didn't have one for the local dentist? When I asked Mrs. D about it, she just said "He kept billing us so... I kept sending him a check!" Enough!

Lots of good anecdotes about the mechanics of health care since last afternoon. Great to hear about all the real-world experiences with pricing, etc. >>My biggest concern is the lack of transparency in fees. Eliza hit it right on the head. What is needed is price lists and list prices. After having seen some real medical bills, and what the insurance company actually paid, I can say in no uncertain terms that one of the biggest benefits of insurance are the pre-negotiated rates, which were just about 40% of what the doctor would otherwise bill. Think $4000 instead of $10000, for example. Negotiated rates would also apply under national health insurance but of course then it would be denounced as socialism ;-) (hope the new and improved spam filter still is ok).

MST, No offense was intended, but I prefer to make my own statements :-). That being said, the main reason for malpractice cases is (surprise) *malpractice*. Doctors have to fess up to the fact they are quite fallible, some of them a lot more than others, and stop being all huffy about it. The goal should be to prevent errors and omissions, but not to harp about them.

MST, Again, I can't thank you enough! It makes no sense whatsoever to engage in a debate about HC by starting with the (current) debacle and working your way backwards? When you have rampant abuses the caliber of which FAB and Eliza describe above, there's nothing 'to' salvage. Sometimes you just have to scrap things and start over? The reason this topic keeps cropping up here as well as other bubble blogs is b/c it's the same brand of abusive realtionship we've tolerated for years from the REIC.

DinOR, I have a feeling that it is always more risky, billing-wise, to go to a specialist that is the "medical building" type, rather than the one that is part of an "medical group" type setting that has a reputation to worry about. Those one-doctor-per-office places seem to have too much private enterprise going on in their billing practices, and not enough peer pressure from their colleagues.

DinOR, I'd start asking for a "Sunshine" law where all medical professionals have to post their rates for all customers to see (on the web, preferably), much as is the case in auto repair shops in California (you mentioned mechanics).

justme, Not doubting it in the slightest? Again though ( and I wish skibum would weigh in on this ) the problem is that, freaking "peer pressure" shouldn't have a THING to do with it! If what we're relying on for fairness from the system is pity or "cuttin' a brotha' some slack" then we are truly screwed -before- we so much as developed symptoms. You don't have to get a whole lot older before you realize, every day you *don't have a problem is a day closer TO having a problem and they're just lined up waiting to exploit a condition that likely was in the cards from before you born.

Eliza, My dentist has been so far been very good about disclosing the cost of any "extras", and in fact will take a break to print the estimate and have me sign it before we proceed. Again, much like a reputable auto repair shop would (or have to in California).

justme, Well or like Utility Boards that have to appeal for a rate increase? I recall reading a report in 2002 where in the 50's HC was like 4% of GDP. What is it now? 12%? I don't know. At what point does it eclipse any hope of real productivity? Having ( or not having ) HC Insurance shouldn't be a Do or Die proposition. If you'd 'prefer' to even out your expenditures, it should always be an option. But *not having it shouldn't be that big a deal either. THAT'S the America we need to get back to.

DinOR

[botched post] DinOR, Health care was 17% of GDP in 2008, according to the link I posted earlier. http://www.nchc.org/facts/cost.shtml

Just to add to stupid things dentists/docs/Insurance do: I needed to get a tooth removed, I asked the dentist if the tooth can be removed within the same week, cause i had some FSA amount left which needed to be completed within the week. Went to dentist, he took some x-rays and referred me to another guy. Now, the whole procedure was a waste and add to that, they sent only a partial amount and rest of bill came in after my FSA amount expired. My wife went to this dentist for braces and he said, he would do it for $4500. We confirmed that there would be no other charges. 6 months into it, he referred my wife to another dentist to remove one tooth ($600). Now, he is doing the same for another tooth. HR dept arranged a healthy check up for free at office, so myself and wife took it up. We are also mandated to do a healthy check up at docs place every year. It so happens, free check up office was not actually free, those guys billed against free healthy check from insurance and docs office guys sent us the bill for both of us. It's always something or the other. Every month, the bills keep coming.

There should be a law against abusive billing practices. If anyone sends you a bill for something you did not order in writing, the biller should be liable for 100% of the amount of the bill in penalties.

justme, We need an extreme make over ("Health Care") version. Any thing short of that is a disaster.

So I asked for a fee sheet so that I could plan for the next visit, and I got, “He doesn’t like for us to give out that information.” Nothing like the free market to bring a little pricing transparency. http://www.quickhealth.com/service.htm

I'm always amazed how people presume that doctors are more ethical than lawyers..... In California, a client MUST be given a firm fixed fee schedule IN WRITING up front. Otherwise the lawyer can and generally will be DISBARRED.

sa, And there's nothing like that feeling of being "passed around" amongst HC providers now IS there!? Right, when you've got a system that's so generous they can afford to feed each other "referrals" you know something is wrong. The more HC expenses escalate... ( the more you need INSURANCE! ) It should be apparent that these people are plugged into the HR Dept's. as well? All in the interest of your good health of course. If *justme's link doesn't scare the hell out of you, nothing will.

We could have make over for lawyers too. Another day.

sa, Surprisingly I'm a little less cynical there. Can't speak for CA ( as Dennis has shared ) but in OR you will definitely be disciplined! I went to see a labor atty. regarding "alienation" in my former employer's 401K plan and being part of the Bar Ref. Svc. they agree to a 1/2 hour free consultation. Guy tries to bill me for $110 any...way. I contact the Bar Referral Service and in short order that is absolutely the LAST I hear of it! Try getting 'that' level of satisfaction from the medical community?