The Hospital Business – A Consumer’s Perspective

Emergency room visits are an incredibly inelastic good, where elasticity is the degree to which the desire for something changes as its price rises. It has an elasticity of -0.04, where an elasticity of 0 means that the demand does not change with an increase in price and an elasticity of -0.04 means that demand decreases by about .04 units per one unit of price increase. Let’s say that a hospital suddenly doubles all of its emergency room bills to keep from closing. The price increased by 100%, but the demand only decreased by 4%, so they just made a lot more money. Hospitals in the United States are either private businesses, or they are non-profits which operate like private businesses. Either way, their goal is to make money, and money is revenue minus cost.

Recently the government required hospitals to publish their chargemasters, which are fake wildly inflated prices that are used as a starting point for price negotiations. In my local hospital’s chargemaster, I saw a price per Wellbutrin tablet that is just under the standard Drugs.com price per Wellbutrin tablet, but multiplied by 100. There are over 33,000 line items in that chargemaster (not including over 10,000 CPT codes and many HCPCS codes which are not listed), and nobody has time to negotiate over every single line item, so my guess is that with the chargemaster, my hospital takes the unit cost, multiplies it by 100, throw that x100 price at the health insurance companies as a “high ball” number, and then the health insurance companies throw back a “low ball” multiplier (maybe times two), and then they go back and forth until they agree to a multiplier that is somewhere in between the high multiplier and the low multiplier (maybe times 5). This all happens behind closed doors of course, but my guess is that they have some sort of “cost multiplier” and rather than arguing over each item, they basically argue over the multiplier (like I will pay 5-10% of your charge master prices). Bigger health insurance companies have more bargaining power than small ones, so they can negotiate smaller “multipliers”. In practice the prices on my local hospital’s end aren’t fixed – they can increase the price for a given CPT code in their computer, run it, and I believe it will go through on the health insurance company’s end as long as it’s within a range. Anyway, the multiplier is necessary to make sure that they make enough profit to keep the place open, and it all has to happen behind closed doors so they they can profit off of the fact that people don’t know how much they’re being ripped off. Keeping the discounts secret also stops smaller buyers of healthcare (like smaller health insurance companies and people without insurance) from asking hospitals to match the rates that they charge bigger buyers of healthcare (like larger health insurance companies and Medicare). Medicare is an outlier because Medicare forces hospitals to take their patients at a financial loss, resulting in hospitals increasing their rates on non-Medicare patients to compensate for that loss.

Every business in the healthcare industry rips off the end consumer because the end consumer is the one with the least bargaining power. What, are you going to bargain during a heart attack? Of course not – you aren’t going to do any bargaining in advance – you have no leverage. The only bargaining that you can do is after the fact, and that’s only because hospitals lose a lot of money handing bills over to debt collectors and dealing with things like the administrative overhead of long term low interest loans and taking people who don’t pay their medical bills to court, so you the consumer are able to bargain because you have these prospective monetary losses as your leverage. Most consumers don’t of course, and they don’t get to negotiate prices in advance, so as the party with no information, no leverage, and little bargaining power, they get the worst deal financially.

Simply put, the hospital prices don’t mean anything, other than maybe some sort of individual cost unit estimate multiplied by some sort of secret multiplicative factor. Frankly, I don’t believe that they should even be allowed to do this – I believe that they should be allowed to set a multiplicative factor that is high enough for them to remain open with maybe a little profit and that the rate for each item multiplied by this multiplicative factor should be the price. Not a negotiable rate or a price for a particular health insurance plan, but the price from which no negotiations may be made. For example, let’s say that the price per Wellbutrin tablet is $1 and the hospital’s price multiplier is times five. When the patient gets the bill, it will say “1 Wellbutrin tablet – $1*5 = $5”. If they have an unmet deductible greater than $5, then all of that $5 will go towards their deductible. Great, now the price for that tablet is $5, so the hospital gets $4 toward overhead expenses. If the hospital is in financial straights and needs to stay open, they can raise the multiplier. If they intentionally charge more money for things without changing the multiplier so that they can collect more money to go towards their overhead, that should be illegal, and if they add on unnecessary things to raise the bill, that’s a felony. Everyone gets to know the per unit price and everyone gets to know the current multiplier. All health insurance companies are forced to take every hospital at their rate – no negotiations. The purpose of insurance is to insure, not to wheel and deal. The doctors must be able to look up all the rates and multipliers just like everybody else because when they know the cost, they tend to leave out extra unnecessary costs like unnecessary tests. No switch to “value-based care” or “bundling” needs to happen if the doctors know how much money they’re charging their patients and take measures to avoid incurring unnecessary charges.

Of course, hospitals are money oriented businesses that seek to maximize revenue and minimize cost, so it is absolutely not in their interest to do this. Instead, they wheel and deal with everyone and in every way that they can in order to maximize their revenue minus their cost. This results in MASSIVE administrative burdens which alone make up 25% of the cost. In theory that burden could be mostly removed via automation if things were simple and unencumbered, and doctor’s pay could be cut by almost 50% before it would be in doctor’s financial interest to move to say Canada for financial reasons. That being said, as private businesses, there are all sorts of shady things that hospitals could do to manipulate costs and prices to bring in more revenue. They could come up with some horse shit which obfuscates prices even further (ex. “bundling”). They could leave out or add line items or codes. They could manipulate prices – the health insurance companies won’t stop them as long as they don’t do something big and obvious – little mistakes pass right through. Consumers don’t catch these things – most medical bills contain some sort of error and consumers don’t understand their bill because obtaining understanding requires looking up and asking people about each item, which involves a lot of time, effort, and frustration.

And what about the third parties like third party radiology and anesthesiology? Frankly I don’t even understand how they work – their pricing calculations are complicated and it’s harder for me to get prices out of them than it is to get prices out of my hospital and my health insurance company – in fact it’s impossible. What if they and the hospital that they work with start rejecting health insurance plans, “narrowing” coverage so that they are more likely to be billed out of network? Holy fuck. The prices for services like radiology and anesthesiology should be subject to the same price transparency requirements as hospitals, including making them reveal all their codes (CPT, HCPCS) and work units, the price per code/unit, and the math used to calculate their bills. If there’s a multiplier on them (let’s say the anesthesiologist bills $100 and that fee goes on to the end consumer as $120), then all that information should be public as well. Holy hell this is all very complicated and messy. The system is deeply fucked, but I believe that the more transparent and the less complicated the system, the better.

As for profits, here’s what I think. A hospital should be thankful to be open, and a doctor/surgeon should like what they do even if their salary isn’t a ridiculously high $471,100 (which is the median salary of a heart surgeon). If you only became a doctor for the money, you should never have pursued that vocation in the first place.

My Case for Universal Basic Income (i.e. The Andrew Yang Plan)

Andrew Yang is proposing providing a Universal Basic Income funded primarily by a value added tax (i.e. a tax that makes everything more expensive). For an average earner with average spending, the increase in prices will roughly offset the amount of money received. For a high earner with high spending, the increase in prices will cost them more money than what they will receive from the government. And for low earners with low spending, they will receive more money from the government than they will have to pay through increased prices. Note that even though the 2018 median per capita income was $33706, mean was $50,413, so if you make less than $50k a year you will probably see financial benefit from the Yang plan.

Aside from that, my #1 favorite reason for this plan is that it creates a “rock bottom” that is still livable. Mentally ill homeless people generally do not receive social security disability checks from the government because of the bureaucracy which intentionally makes it difficult to get said checks. There is a process where a psychiatrist has to convince a disability determination officer that the person in question is totally disabled (i.e. not able to do any job in the economy) due to mental illness. It’s actually a fairly difficult process – there is a severe lack of psychiatrists, many mentally ill people (especially those exhibiting manic symptoms) don’t believe that they are crazy, the process is slow and beauraucratic, and the majority of applications are rejected. The crazy homeless people you see on the street generally aren’t receiving any money from the government (with the exception of possibly food stamps, but in some areas it’s impossible to get food stamps without working, and mentally ill homeless people generally fall into the crack where they can’t work and also can’t get disability checks). Basically the current “rock bottom” that exists is sleeping on a bench begging on the street for money to buy food. A universal basic income will provide a rock bottom that is a little higher than that, reducing human suffering. Even a small universal basic income (too small to cover the cost of rent) would allow people to live more comfortably, for example by allowing them to get a rain proof tent, decent food (most grocery store food requires cooking and homeless people don’t have a kitchen), a gym membership which they can use to shower in the locker rooms, etc.

My #2 reason for the Yang plan is that it would ever so slightly deter illegal immigration. Illegal immigrants wouldn’t have the documentation necessary to get government benefits, so they wouldn’t receive UBI checks. What they would get if the came over illegally is higher prices through the value added tax which is necessary to raise money for universal basic income. Basically, the UBI with the accompanying VAT would make it less desirable for people from poor countries to come here illegally because it wouldn’t be as much of an improvement for them in terms of quality of life.

My #3 reason is the practicality of this progressive tax (as opposed to the impracticality of the wealth tax that Bernie Sanders and Elizabeth Warren are proposing). The VAT with UBI will cause high spenders to pay more in taxes, while giving more money to people who spend less. In that sense it is a progressive tax. In addition, as has been shown through Alaska’s “oil checks“, repealing cash that people expect to receive from the government is “politically suicidal”, so politicians don’t do it. In contrast, Bernie Sanders and Elizabeth Warren have proposed an annual wealth tax on total wealth, which in the majority of cases does get repealed and also has serious problems. A wealth tax is basically an estate tax, but broken up into annual chunks and applied to people who are still alive. The estate tax has been a total failure – “the estate tax raised $8.5 billion in 2012 — less than 1% of the $1.2 trillion inherited that year. Only 1 out of every 700 deaths results in paying the federal estate tax today.” In addition it’s not uncommon for rich people to take measures to avoid the estate tax, as they will do with the wealth tax. History has shown that the wealth tax raises far less money than expected, causes a “capital flight” (where people leave the country to avoid it or cancel plans to become citizens so they will never have to pay it), it usually gets repealed, and is messy to implement due to the speculative and rough values of certain forms of wealth like certain businesses. For this reason the VAT which Andrew Yang is proposing (along with ending the favorable tax treatment for capital gains/carried interest) is a more practical tax plan than the wealth tax that Bernie and Warren are proposing.

Some conservatives think that a Universal Basic Income will disincentivize people from working, but in practice “universal income study finds money for nothing won’t make us work less“. People will still work if they get checks from the government. All in all the positives outweigh the benefits and I am in favor of the Universal Basic Income plan.

Why I Really Want To Help The Homeless

Because giving to them makes me feel happy and I feel bad for them. That’s it. When a homeless person asks me to take them out to a restaurant, saying “no” makes me feel sad and saying “yes” makes me feel happy. Also, I like homeless people. I like strangers in general but most strangers don’t want to chat for long. Homeless people are totally down to tell me the whole story about their descent into alcoholism. I like homeless people and I feel bad for them and that’s why I want to help the homeless.

Do I want to eliminate all homelessness? Not necessarily. Maybe someone likes the freedom. I wouldn’t want to get in the way of that. The majority don’t like it, though, and at the very least I want them to be healthy, happy, and comfortable. If they’re going to sleep outside or in a park I want them to have good camping gear so they don’t freeze or get soaked. I want them to have a doctor so that they don’t die prematurely. And I don’t want them to get harassed by police. I think there should be a right to sleep on the sidewalk because I don’t think people should be put in jail or targeted just because alcoholism or mental illness landed them into an unfortunate spot.

– John

Why Homelessness is Immoral

I have no cognitive empathy, but I do have morality, and I believe that homelessness is morally wrong. It is morally wrong because it is unfair. I have never been homeless, but I have never done anything special to deserve that status. I never did anything special to receive upper middle class parents. I never did anything special to receive a private school education. I never did anything special to receive a six figure salary. In fact, according to Amazon’s statistics, they actually lost money on me – they paid me more money as a programmer than I produced for the company. The reason that I receive a six figure salary is for the most part by chance – I enjoyed writing computer code and writing computer code happened to pay a six figure salary. I’m not and have never been a particularly good employee or team member – it’s just luck.

Everything in this world is luck. You don’t choose what country you are born in. You don’t choose who your parents are or how much money they have. You don’t choose what you enjoy and what you don’t enjoy. There is nothing about me that makes me more deserving than anyone else.

This world is not a result of God – it is the result of luck and chance. There is nothing that has ever happened that couldn’t have happened because of luck and chance. Over time as science developed, the number of “seemingly impossible and unexplained” things in this universe went down – things that would have been explained by God. Famines and floods and diseases used to be acts of God. God sent the famines and floods and diseases. When hurricane Dorian was approaching Florida, people on Facebook use phrases like “God turned hurricane Dorian away from Florida – God blessed us by not having that hurricane hit us.” No he fucking didn’t – there was a pocket of low air pressure North of the hurricane that made it go North. That’s not fucking God. Nothing is fucking God. It’s all luck. Everything from the Big Bang to the first organic molecules to the first cells to the evolution of dinosaurs to you sitting in a chair reading this sentence is a result of things that happened by luck and chance. And luck and chance isn’t fair.

Morality is a human creation. It’s based on the golden rule – not doing to others what you don’t want done to you and doing to others what you want done to you. Do you want to sleep on a thin camping mat over hard concrete outside where everyone walking by can watch you sleep? Me neither. I personally wouldn’t even be able to sleep – I bought a camping mat and tried on the floor in my apartment and even inside my apartment I couldn’t sleep. Homeless people aren’t homeless because they are less deserving than me. I don’t work harder than them. In fact I am a terrible employee and team player – I wouldn’t even hire myself and I am fortunate that there were people out there dumb enough to hire me.

Mental illness isn’t fair either. I am stricken by both psychological issues like lack of cognitive empathy and narcissism as well as psychiatric issues like ADHD, bipolar, and symptoms of schizophrenia. I have tried many medications, most of which have not worked at all (such as the mood stabilizer lithium) or have helped a little but have had worse side effects than the thing that they were helping with (like many antipsychotics). I’m a fucking basket case, but so are a lot of homeless people, and I didn’t work any harder than they did. All I have that they don’t have is luck and chance and luck and chance isn’t fair. It’s up to people to make things fair because things won’t be fair on their own. It’s not like some magic flying man in the clouds is going to come out of nowhere and fix everything without humans lifting a finger.

  • John Michael Reed

The Case For Abortion

I will start by saying that souls aren’t real and that a person isn’t really alive unless it has a functioning brain. Without a functioning brain, a person’s body is just an inanimate object. When abortions happen, they happen well before a fetus or embryo has a functioning brain that is capable of thinking or feeling. There is some debate about when pain can be felt, but that number is somewhere in the 18 – 28 week range. “Only 1.3% of abortions occur after 21 weeks of pregnancy in the US.”

Basically, abortions happen when the fetus or embryo isn’t actually a person in the sense of a mentally thinking feeling person. The people who do have abortions tend to be single poor women who aren’t ready or willing to be parents, and I don’t think those people should have kids. Their children will be fatherless and disadvantaged and ultimately they will contribute to the cycle of poverty. Black women and women on Medicaid tend to be much more likely to get abortions and if they don’t, they will pass on the poverty to the next generation. I don’t know about you, but I don’t believe that people deserve to be born into poverty. Money might not buy happiness past a point, but researchers found “$105,000 to be the ideal income for life satisfaction in Northern America. Earnings past that point tended to coincide with a lower levels of happiness and well-being, researchers found.” Extreme poverty leads to less life happiness and I don’t believe that people deserve to be born into extreme poverty with only a single mother if they can avoid it.

I Am A Loser by John Reed

I am 25, unemployed, single, and I live at home with my parents. I am a loser. Now, I could justify being a loser by saying it’s because I have a mental health problem and if I didn’t have it I would be “normal” and probably employed, but that’s besides the point. In the US, the political right talks about hard work and lifting yourself up by the bootstrap and the left talks about equality. To be honest – I don’t work that hard and to be honest – I am a straight, White, cis-sex male with upper middle class parents who are willing to support me. About a billion people on Earth don’t even have access to electricity. I don’t have it that bad. I am not super disadvantaged, so I can’t say it’s because I come from a disadvantaged background. I am just a loser.

There are countless other losers out there, and nobody hears their stories. White men who have nothing to cry about. They can’t cry about racism or sexism. They are maybe unmotivated and/or they have a mental health problem. They aren’t justified. Right now, I am one of these people.

If I could wave a magic wand and have anything I could ever want, I would have a beautiful wife, a home in an urban area, two beautiful kids, and a stable job that I love. Instead I can’t hold a job, I struggle mentally, and I can’t get sex or a relationship regardless of how much effort I put in. I am one of the left behind people. Left behind by the left and the right.

But I don’t have it that bad. On the streets there are other people with mental problems who are homeless. There are people with real problems. Then there’s me. I can’t do much right now other than wait for a job interview (trust me – I applied to almost everything), so I might as well be happy.

What is the point of life?

I hit rock bottom when I was involuntarily detained into a mental institution. I wanted nothing more than to be free. I was so unhappy when I was trapped. I naturally gravitated towards happiness from there.

If you listen to an evolutionary biologist like professor Robert Sapolsky, he says something along the lines of that the purpose of life is to pass on genes. Some animals form colonies and packs based on kinship because of shared genes (“I would lay down my life for two brothers or eight cousins” is a quote referring to the shared genes and kinship based on genes from kin selection). Now, let’s take a moment to assume that the purpose of an individual’s life is to pass on their genes.

You run into a big honking problem when you run into gay people. What is the purpose of a gay man’s life if he can’t or won’t pass on genes? In this simplistic view of the world, the purpose of a person is to get married and have kids. What if they don’t want to? Would they be going against their purpose?

I would argue that you shouldn’t look at people or yourself this way. It leads to all sorts of dark paths, like the notion that gay people have no purpose and that certain genes can be removed from the human population. I would argue that a better way is to say that the purpose of life is human happiness. You would be treating people as people if you believed that the purpose of life is human happiness. Like the kind of happiness that a prisoner experiences from freedom. That’s why prison is a punishment – nobody wants it and in a perfect world nobody would be no prison.

People naturally gravitate towards this higher form of happiness. People do it through self-actualization and being and perfecting themselves. The deprivation of it to a sufficient extent can make a person suicidal.

Oh my God I just realized I don’t give a fuck about other people. That is why I am single – who wants to be with a totally selfish person?

YouTube video: https://youtu.be/sAHTszF2QmY

“Trans” Explained For People Who Aren’t Trans

Where do the words “trans” (short for “transgender”) and “cis” (meaning “not transgender”) even come from? Why, chemistry!

In chemistry, “cis” means that the CH3’s are on the same side of the carbon bond and “trans” means that they are on opposite sides of the carbon bond, or across from one another. The first drawing of a chemical is cis and the second one is trans.

That was chemistry. Now, in women’s studies type classes, sex is short for “biological sex” and gender is not the same as biological sex. A trans woman wants to be called a woman to avoid gender dysphoria (I’ll explain what that is in a sec), but her sex is not on the same side as her gender, so she is referred to as a trans woman. She is a woman whose gender is on opposite sides of or across from her biological sex. Look at it like this:

So a biologically female woman is a cis gender woman (see the line that goes straight from “Female” to “Woman” in the above image) and a biologically female man is a trans gender (“transgender”) man (see the line that goes diagonally from “Female” to “Man” in the above image). A trans man is a man who was female at birth but (typically) does things like take testosterone and work out to get a male physique. Example before and after photos:

In contrast, a biologically male man is cis and a biologically male woman is trans, as in the below diagram.

Taking what I just said and flipping it, a biologically male man is a cis gender man (see the line that goes straight from “Male” to “Man” in the above image) and a biologically male woman is a trans gender (“transgender”) woman (see the line that goes diagonally from “Male” to “Woman” in the above image). A trans woman is a woman who was male at birth but (typically) does things like take female hormones and wear women’s clothing. Example before and after photos:

Sex refers to things like chromosomes and gender refers to your state of being a man or a woman (like “he” or “she” pronouns, being referred to as “sir” or “ma’am”, etc). In woman’s studies class, sex is biological (like your genitals) and gender is a social construct (like whether people refer to you as “sir” or “ma’am”) and they are two different things.

Anywho, a transgender woman wants to be a woman and a transgender man wants to be a man. It makes them experience positive feelings and the opposite makes them experience negative feelings in the same way that you being called the wrong pronoun makes you feel negative feelings. My name is John, so imagine someone said “John, she went to the park”. I felt irked – I am not a “she”. That is exactly how a trans person responded when I used the wrong pronoun for them. They said “I am not a she regardless of what other people think”.

Okay. That feeling of a negative emotion when someone calls you by the wrong pronoun is a form of gender dysphoria, or a negative emotion associated with one’s gender (what they consider to be the wrong gender with respect to their internal sense of gender). The opposite of “dysphoria” is “euphoria”, where gender euphoria is a positive emotion (like if you feel good because people are getting your gender right). So imagine that now people are saying about me “John, he went to the park”. I don’t feel euphoric or dysphoric (because being referred to as “he” is just normal for me), but maybe I feel gender euphoria if I get the nice arm muscles that I have always wanted from going to the gym. It’s self-confirmation. According to a trans YouTuber who I watched, the main types of “-phorias” that trans people experience are from their physical appearance (like the muscles) and their pronouns (like when I got irked at the thought of being referred to as a “she”). The former would be good, self-confirming gender euphoria and the latter would be bad, annoying gender dysphoria.

I am not trans, but that’s my best understanding as a cis man.

“A Redistribution of Wealth” or “Libertarian Communism” by John Reed

In a previous article, I talked about how all people are created equal. I will go further and say that all people are equal, although some people have more money than others. I will not fight capitalism because I don’t believe that is necessary. I will say though that people should receive from their government what they need to succeed in life (such as an education and healthcare).

In the USSR, they had this sort of pipe dream of Communism where the government owned everything and gave everyone a job. I don’t believe that is necessary in order to establish that all people are equal (although they have different amounts of wealth). I don’t believe in cash handouts – for example there are countless tragedy stories about lottery winners, and people can just waste their winnings. People don’t need cash – they need things that can be purchased with cash, like an education. Ultimately I envision a global redistribution of wealth such that every person gets what they need to succeed in life, but no more. Every person receives an education and healthcare. Every person receives a “safety net” to catch them after they fall in life – after catastrophic failure. Ultimately, the human race is one species – one race, and there is one Earth, and we are all one team.

Imagine four different versions of me. Version #1 has no money and no wealth and continues on that trajectory, Version #2 has no money and no wealth but becomes wealthy, Version #3 has plenty of money and wealth and continues in that trajectory, and Version #4 has plenty of money and wealth but becomes poor and wealth-less. Regardless of which one I am, I deserve the basics. We are all created equal. Fundamentally, when I am born, I don’t know if I am going to be a person who makes a fortune or is constantly poor, but either way I should get support. Some people have a very supportive or wealthy family, and that is great, but not everyone does. The people who don’t should receive that support from the government. For example, not everyone has parents who are willing and able to pay for higher education or re-education. But everyone should have those sorts of opportunities. That is why I envision a massive transfer of wealth (i.e. taxpayer dollar spending) that does not significantly interfere with capitalism and that does not naturally interfere with free trade or the conducting of business transactions.

I envision a redistribution of wealth. For example, something like Elizabeth Warren’s wealth tax that takes money out of billionaire families and puts it into the hands of working families for things like childcare. Simply put, just because someone is born with parents who have a lot of wealth doesn’t mean that they deserve or ought to have lots of wealth. That being said, even if someone is born to parents who don’t have a lot of wealth (or who don’t have supportive parents), they still deserve support. Morally, there ought to be this sort of redistribution so that all people on Earth are supported. We are one people, one team.

I call this Libertarian Communism because it seeks to keep government as small as possible and protect freedom while simultaneously eliminating class barriers and giving all people what they need. Not socialism. Even billionaires like Bill Gates have realized how unequal things are and put their money into charitable causes, like for example fighting malaria in Sub-Saharan Africa. In addition, one of the best ways to make sure that people are supported is to raise the status of women. When women make money, the entire family is uplifted. Just another reason to have a woman president like Elizabeth Warren.