patrick.net

What if we replace the BS/MD degrees with one shorter degree? This should reduce the cost of doctors without much impact to quality. We do not even need doctors for most tasks. I had a flu and went to see a doctor. He just told me to go home and have chicken soup. The insurance was then charged $250. This is absurd.

HARM,

I'm not talking about heroic end-of-life measures. By the way, I noticed that people who can't pay are somehow less likely to receive those measures anyway...

There was nothing heroic about stitching my hand, and it took the emergency room PA less than 10 minutes to do it. Why did it cost $5K? I ended up taking out the stitches myself because I was afraid of a $2K bill for taking them out!

I ended up taking out the stitches myself because I was afraid of a $2K bill for taking them out!

Ouch. I hope you hand feels better now.

But where is the money going to? Why is our health care cost is so much higher, even when compared with other first-world nations?

Face's $5,000 stitches and Peter's $250 chicken soup advice are to me indicative of a broken system, where the billing is completely out of alignment with actual costs of services provided. Part of what's inflating these costs are no doubt having to spread the costs of that "heroic care" to everyone else.

Then there's waste/inefficiency in the form of administrative overhead --I've seen estimates that say as much as 50% of your premium goes to just that.

I also wonder if the current system exposes doctors to too much liability in the form of malpractice suits. When you're average new OB/Gyn is having to spend $100K/year in malpractice (on top of his $250 in student loans) he's got a problem. And then you've got a problem, when he passes these costs on to you.

Peter P,

Fortunately, removing stitches doesn't hurt...

I'm not an expert on health care costs, but it seems that we just have a very flawed system. There are numerous problems with it. Everything from insanely expensive malpractice insurance to lack of meaningful competition between providers to pharmaceutical companies squeezing the US market as hard as they can. In general, everyone seems to be used to getting away with the insanity for the most part, so it continues. There just has to be a better way to do it, but there doesn't seem to be much of an outcry about this.

I like the idea of global healthcare arbitrage!

We should have a limit on payout of liability lawsuits. We should get rid of the "Punitive" judgements altogether. Accidents do happen. There is no point granting large sums of money to victims and then socializing the costs. If gross negligence is involved then the responsible individual should be sent to jail and spanked anyway.

Face Reality, thanks for the analysis.

Again, I am sorry for ranting at you earlier today.

hymie, it is more effective if you do this...

Just chat causally with a realtor-looking friend (accomplice) about evidence of falling housing prices around known homeowners/investors, pretending you do not know that they are around.

Then, just glance them quickly and pretend to look embarassed. Say something positive about housing and move away quickly.

This should be a better psychological play.

(For entertainment only)

astrid, that's why I think truly malicious and negligent doctors should be jailed and/or caned (a la Singaporean). Insurance should not protect these people anyway.

For honest mistakes, we may just have to see them as accidents and grant reasonable compensations instead of absurd punitive judgements.

The current judicial and administrative governing system is not good at weeding out bad doctors. I agree that the current malpractice insurance system is horrible because it doesn’t distinguish between good and bad doctors, but only the the field average.

Agreed --malpratice lawsuits just spread preventable costs/damage from truly incompetent doctors to everyone. This is one of those rare cases where more government oversight (in terms of weeding out incompetent docs) might not be a bad idea. *Shudder* --did I just say that?

Medical malpractice is tough to monitor so maybe *some* kind of oversight would help. How many stories have you heard about the doctor who had multiple malpractice claims, settled out of court, switched towns and moved on. I don't know what kind of system would be best, but it seems anything would be better than whats going on now. It's interesting. I have brothers that live out of state, and we've noticed that information doesn't seem to cross state boundaries. I've heard of doctors and other professionals who run shady businesses who switch their practices to other states and voila' clean record. We need something on a national basis, but that's likely to be a logistical nightmare.

This is a bit off-topic, but somewhere in a previous thread, someone posted a great color bar graph showing the San Diego for sale housing inventory over the last 4 years. I can't seem to locate it --can someone post the link here? Thanks.

We have digressed quite a bit on this thread, but in the end health care is a big issue with the aging of the boomer generation. I know that despite big gains in my parents home equity, they are in a precarious position financially due to two main factors: health care costs and over-spending.

I wish I could say my parents are unique and that the vast majority of boomers will live healthy, long, prosperous lives. But rising obesity and diabetes rates argue against the long and healthy part. And since boomers are notorious for big spending, prosperity is questionable too. The truth is people are counting on their homes to cover all their financial bases and in a volatile housing market that’s not wise.

I recommended to a friend to buy there a couple of years ago, and he bought three houses there. All are cash flow positive, and appreciating nicely. He’s planning to hold on to them as part of his retirement “savings”. Being a landlord is a bit of a pain, though, but that’s the way it is.

Yes, it was probably a good decision buying there three years ago. There may be still more potential now but the risk/reward has changed a lot lately. I am going to be on the sideline for a while.

Cattle,
Thanks for the link. Yes, Krugman’s analysis sounds right. I find it amazing that things like Janet Jackson’s “wardrobe malfunction” or nude scenes in some computer game cause more of a stir among politicians than our unbearable health care situation which no one will dare touch. It’s ok for kids to be exposed to violence, and it’s ok for them not to get health care, but God forbid if they catch a glimpse of a naked body!

Face, please stop --you are making TOO MUCH SENSE! How can we have a debate when I keep agreeing with you?

Face Reality, again, it is always good to buy when the risk and reward are in line. I worry about people who have bought recently using great leverage and are counting on early retirement. For people who stretch, there may not be a "long term" prospect to talk about if they are unable to meet immediate financial commitments during a cyclical downturn.

The statistics don’t help much because people I know and myself would be counted as risky cases (low savings, ARMs, IO loans, etc.) in these statistics, but I think we’re in relatively solid shape, and definitely more solid than if we hadn’t bought real estate over the last few years.

I think anyone who does not count on sustained appreciation to maintain financial soundness should do just fine.

Face Reality, I have always agreed with you on (2). I am not giving up on (1) yet... ;) (It really depends on the definition of crash as well.)

Jack is gone again...

Perhaps we should talk about the relationship between boomers and pre-fab houses... (is there any relationship at all?) :)

Face Reality

I'm sure you have said before, but I forget. Do you think the BA is especially resilient or do you think housing in general will only see a minor correction? I'm curious because I don't have a major disagreement with you. I'm like Peter in that I think housing is a good investment at the right time and circumstances, but I think this market will probably fall more than you predict.

I don't know if you're familiar with the Sacramento region, but there has been a massive expansion of housing here over the last 10 years and I don't see how we can avoid a sharp correction. My pov is colored by the area I live in, and I'm curious if your view is a BA view or an overall one.

I've been watching the 10 year treasuries as well. Do you think this is a trend, or a short term fluctuation?

News, what do you think is pushing up the 10YR Note? I don't think that the market is suddenly having a change of heart in the expectation of future inflation. It looks too orderly.

SactoQt, it still looks like a short-term trend at best, so I am not going to hold my breath. It will become interesting if the yield breaks above 4.6%-4.8%.

Again, I am not an expert.

CArenter, the buyers are actually adopting a high Sharpe ratio strategy. Too bad they are using lagged historical numbers.

On the other hand, (4) is already meaningful, no? (1) is assumed at least in the short run. (2) is an effect, not a cause. (3) is coming up in the form of a new bankruptcy (consumer protection act) law.

SactoQt, don't worry. The correction in Sacramento will come very soon. I am a lot more certain about that happening than a crash in the Bay Area. ;)

I gotta tell ya, this whole thing has me just baffled. I get that low interest rates heated up the market and fueled all kinds of speculation and started a cycle that feeds on itself. But Sacramento? There are nice areas around here, but I don't really see the appeal in living by Arco Arena; but you should see how much they have built out that way. Stockton and Modesto? Not too attractive and high crime. Davis, Vacaville, Fairfield, Dixon??? The only thing to recommend most of those areas is that commuters are a little bit closer to the BA. This area doesn't have the glamour (for want of a better word) associated with it that the BA and LA have. I'm stumped. :|

SactoQt, people are often confused about the reason of a price run-up. The convenient answer is that "we are running out of land everywhere". As a result, buyers do not care about location anymore. They just want to get into something "before it is too late". They first buy and then find reasons/excuses to support their irrational behavior.

SactoQt, people are often confused about the reason of a price run-up. The convenient answer is that “we are running out of land everywhere”. As a result, buyers do not care about location anymore. They just want to get into something “before it is too late”. They first buy and then find reasons/excuses to support their irrational behavior.

That's a hard argument out here. Land as far as the eye can see in most directions... really.

I get your point though. Fear is a big player in this market, but it's still probably a bit player compared to greed.

I believe foreign central bankers just reduce buying speed but not “selling” so as to avoid shooting their own feet.

Possibly true. It is quite scary that once their pace of buying even slows the yield on 10YR climbs steadily.

Also, I have lately felt reduced to making bad jokes, not unlike you!

I have the same feeling. Having little to say... I am glad to see that other participants (SactoQt, HARM, ...) are contributing so much though.

It depresses me a little bit to keep making this point over and over again, because if I AM correct, many of the people I have come to know and like here will be effected negatively.

Jack, we are here trying to speculate. The truth will prevail, whether we are right or wrong. Do not feel bad. :)

Waiting may help in some areas, but I would feel irresponsible telling people to wait if they are considering a good bay area location, with interest rates this low.

I think waiting may or may not help. I will try to tell people my belief and the underlying logic. But as always, it is not investment advice.

One thing though is that the Bay Area tends to inflate prices in all areas which are within driving distance to the Bay Area.

Face Reality, I do not think Sacramento is within commuting distance of the Bay Area though. (It is a road trip for us.)

New thread : "RE Roadkill"

I agree that it’s not within commuting distance, although I once knew someone who commuted a few times a week from Sacramento to the Bay Area. He wasn’t able to keep doing it for very long.

Sacramento is possibly great for telecommuters though. Traveling once a week to attend meeting is not so bad.

Re: commuting from Sacramento

I don't get it but a lot of people are commuting daily to the BA. That's why I think a minor BA price correction will affect this area, who wouldn't want to move closer to the BA if they could?

I remember that a decade ago many immigrants in Canada "commute" to Asia by plane. Many marriages ended in failure. People occasionally do things that are incredibly stupid.

Apparently, people live just to live in houses... purpose of life...

Ok Astrid, that's just bizarre. ;)

How about bombing housing developments in the name of environmentalism? Or spiking tress? Or burning down research facilities? Any time any ism is taken to an extreme, it just gets stupid IMO.

Jack

If extreme doesn't hurt anyone I can live with it. When it gets violent or destructive, then I take issue.

Edward,

Thanks for the post --good story. Unfortunately, I think most of the board has moved on (I came across your post by accident myself while researching). Maybe you can include this in a short bio of yourself in the new "On a Personal Note" thread.