Mish's Global Economic Trend Analysis

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• Physicians, Others Chime in on Who's to Blame for Rising Healthcare Costs
• Sunday Funnies 2010-08-29 Double Dipping
• Email From "Morally Conflicted" One Year Later After Walking Away

Physicians, Others Chime in on Who's to Blame for Rising Healthcare Costs Posted: 29 Aug 2010 08:23 PM PDT I received a lot of emails in response to Who's to Blame for Rising Healthcare Costs? Some reader suggestions might save you some money. Overpaying for Generics "Dr. P" a front line working family physician for 30 years writes .... Hello Mish Thank you for exposing some of the many scams on health care insurance. Here is another example of industry wide ripoffs: Many generic medications now cost $4.00 for 30 days or $10.00 for 90 days without insurance. Sadly, many mail in companies require patients to pay a $15.00 - 30.00 dollar co-pay for 90 days for the same drugs. Just this week one of the mail in companies informed a patient of mine that they will be only filling the prescriptions for 30 days and will require a $15.00 co-pay monthly for a medication which is only $4.00 per month. My patients were surprised when I told them to just go to a local pharmacy and not use their insurance. One patient had 4 medications he was paying more than double for. In the most flagrant example, a patient paid $60.00 per month for his medications that he could get for 90 days for $40.00 if he did not use his employer paid insurance. That is $180 instead of $40! The insurance company walks away with the money on the back of the patient in all of these instances. I find this way over the top in the ethics department. To your health, Dr P. Drugs from Canada "CB" writes ... Hello Mish Keep up the good fight. I want to let you know, however, that Americans can buy drugs from Canada - as individuals. No bulk purchasing for resale is allowed, but to get one's own drugs at a big discount (like I do), the place to check out is called Canada Meds. Their phone number is 1 877 542 3330. I save 50%. I pay directly for them, so trying to buy from Canada under an insurance plan might not be possible. I don't know. The drugs I get from Canada Meds come from other countries, and are usually made in India, but they are the exact same thing and I've been taking them for years now with no ill effects. CB I cannot and do not vouch for the above claims nor do I deny them. I simply do not know. Moreover, I do not know if buying drugs from Canada is against any state laws. I did check and I do not see complaints against Canada Meds, so that is a good sign. Another physician Chimes In "MB" MD writes .... Hello Mish I am a long time reader and have written previously. I am also a physician. Your post regarding health care costs hits close to home but I think you have missed the real crux of the issue. I will not pretend that I can offer a comprehensive review in a short email. There is more than enough blame to go around. Who shares the blame? Insurers, the Congressmen they've bought and the Americans who can look only at the fact that they can get mostly free care (Medicare and Medicaid recipients, government employees and a decreasing number of lucky beneficiaries of large corporate policies) and many of my peers who are paid per service regardless of need, benefit or outcome. One need only look at the enormous amount of waste in the system in regards to gross and repeated over-testing to no patient benefit. I could write pages about over-testing. I have a little aphorism that I believe sums up the failure of American health care: 30% of health care delivered was never necessary and 30% of necessary health care is never delivered. "MB" Cost of Illegal Aliens "JC" writes ... I know a nurse in a major metro area and she deals with the illegal immigrants flooding into her hospital emergency room every day. They come with their diagnosis in hand from the country they left. Major metro hospitals are magnates for illegal aliens coming to the US for free medical treatments. In my post of who is to blame I came up with this list. So Who's To Blame? Obama Congressional Republicans Democrats Insurers Public Unions State Government President Obama just wanted a bill. He did not really give a damn what was in it, as long as it did not upset public unions. Moreover, Obama sold the youth vote right down the river. There is nothing but pain for them. Public unions do not give a damn about healthcare costs because they and their families pay next to nothing with deductibles that are next to nothing. Taxpayers pick up the cost. Democrats also did not want to upset the unions. Republicans refused to allow competition between states or cheaper drugs coming in from Canada. State governments pander to unions and also act to restrict competition. The insurers bribed both parties to get what they wanted out of the legislation. Other Notables Lobbyists for pharmaceutical companies, lobbyists for insurers, lobbyists for lawyers so tort reform is not passed, etc. Local Governments for pandering to unions. Fear Mongers who talk of "death squads" every time a discussion comes up regarding health care rationing. Organized religion for fighting to keep brain-dead zombie patients alive at enormous expense. A nurse friend of mine told me how hard it is to "pull the plug". The public at large for obesity, poor eating habits, smoking, etc. Case for Rationing At some point the system just has to say no. Spending hundreds of thousands of dollars to extend someone's life by three months is simply not rational. Nor is spending hundreds of thousands of dollars when the odds of success are slim. Yet every time the discussion comes up, political hacks start screaming about "death squads". Other than the public at large, everyone has a vested interest in not fixing the system. It is pretty tough to get reform when nearly every major industry group is against anything and everything that is likely to do any good. If additional comments come in, worthy of posting, I will add an addendum. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

Sunday Funnies 2010-08-29 Double Dipping Posted: 29 Aug 2010 12:05 PM PDT Here is a funny clip from Seinfeld on double dipping. Embedding disabled. What We Call The News - Jib Jab In case you missed it, please take a look at Nonsense from NBER on Odds of Double-Dip. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

Email From "Morally Conflicted" One Year Later After Walking Away Posted: 29 Aug 2010 01:57 AM PDT Slightly over one year ago, I received an email from "Morally Conflicted in Arizona" who at the time was considering "Walking Away". I responded to his email on August 18, 2009 in Bright Side of Falling Home Prices It turns out "Morally Conflicted" did indeed walk away. Here is a followup email I received a few days ago, about his experience. End of the Line "Morally Conflicted" writes ... Hello Mish, It's been over a year since I asked for your opinion about how long it would take for the housing market to "recover," which was about the same time that I stopped paying my mortgage and decided to walk away. Well, the game is finally over. I moved out last week, and the trustee's sale occurred last Thursday. After thinking repeatedly about it recently, the end results look something like this: After purchasing the house in 2005 for about $740K with only $40K down, if you count my mortgage payments as "rent," in a sense, I recovered my down payment over the past year by living "rent" free over the past year. The current value of the house is most likely around $400K. Thus, I was able to "get out from under" a $300K loss by walking away. After a bit of looking over the past couple of months, found a two-bedroom house I can rent for $1200/month. The rental is in Scottsdale, just a few miles from my old house. It's definitely smaller and not as nice, but it's more than adequate. Given my new rent payment, I am estimating that I will be saving at least $1500/month by renting the new house vs. staying in the old house, even with a modified payment (and yes, I am accounting for the tax break on my old property. Therefore, as things currently stand, I believe I will "save" $150K over the next 100 months - assuming of course that my rent doesn't change and/or I don't move again. Thus, I believe I can conservatively estimate that my decision to walk on the house will essentially increase my net worth by approximately $300K over the next 100 months had I struggled in the existing loan. Moreover, that assumes the old house increases in value in that timeframe. If not, the number may be more like $450K. On top of everything, just this week, I was contacted by the real estate agency that will be selling the house for the new owner (i.e., the bank - it looks like they bought the house "from themselves" at the trustee's sale), and I am being offered $2500 to leave the appliances, etc., in the old house. The only real downside I see at this point is that my credit is shot. I guess I'll have a foreclosure on my "record" for the rest of my life. However, the irony is that if there has ever been a time in my life when I do not want to borrow any money for anything, it is now. I'm not trying to make light of the situation. This is not something that I'm proud of. However, it does feel good to have it over with, and looking at the math, it really seems like the right thing to do. Sure, I "could" have been paying my mortgage over the past year, but given the hit my income took last year and the first part of this year, I would essentially be living paycheck to paycheck right now. As always, I appreciate your work. Please keep it up. Thank you, Morally Conflicted in AZ P.S. I did consult with an attorney before making the final decision to walk away. Glad I could Help Thanks "Morally Conflicted" I am glad I could help. For more on the morals and ethics of "Walking Away" please see Moral Obligations Of Walking Away Walking Away Revisited - Reader Mailbag - Moral Dilemma Emails from Housing Hypocrites about Ethics Many Chime In On "Housing Hypocrites" Post Seek Legal Counsel That "P.S." line above regarding consulting an attorney is very important. I did advise"Morally Conflicted" to do just that. For more on the needs to seek proper legal advice, please see ... Before Walking Away Consult An Attorney How to Find a Bankruptcy Attorney There are many potential snags to consider if you go it alone. Don't do it! Walking Away Goes Mainstream The moral stigma regarding "Walking Away" is now pretty much gone. That it ever existed in the first place is quite hypocritical. Henry Blodget and Aaron Task discuss the hypocrisy a few days ago in It's Okay To Walk Away: Let's End The "Morality" Double-Standard On Mortgage Defaults I was way out in front of this issue, almost two years ago. If "Walking Away" is in your best financial interest, there is nothing wrong with doing just that. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

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