Wednesday, October 31, 2012

$282 Billion In Medicare Looting - More Of Predatory Corporate Capitalism’s Privatized Gains And Socialized Losses

For-profit insurance companies overbilled Medicare By $282 billion.  That’s $282 billion that should not have been paid in executive bonuses, investors, to invest in new buildings, new equipment, etc.   Let’s be frank.  This number is just a swag.  Yet, I have seen a few experiences that would anecdotally lead me to believe $282 billion is way too low.  But one thing is certain that everyone already knows.  Overbilling and fraud in the health care racket is systemic.  Medicare catches looters every day.  And, an entity has to be big to loot a lot.  In other words, a medical system built around a private, individualized doctor practice structure is not going to see substantial looting.   It takes big corporations, mega doctor corporate practices and the cross ownership of health care services to be big looters.   If you are having trouble understanding what I am stating, William K. Black clearly outlined this dynamic in his book The Best Way to Rob a Bank Is to Own One.  The best way to rob society is to be a major corporation that can leverage its looting to the size and scale of the corporation or institution.   ie, JP Morgan is going to loot a lot more than a small town community bank was ever capable of just for reasons of leveraging its size and scale.  Ditto with health care providers and other corporate entities in the health care bureaucracy.  We can blame Ronald Reagan for this in his deregulation of capital that created massive monopoly, oligopoly and large corporate disturbances in our economy.  Of course, we can blame all politicians since for continuing to allow it.

I’ll throw in a short few paragraphs about a recent personal experience.  I have a friend who was in the hospital two times in the last year.   The first time was about five days and the second was about four.  I can’t recall the exact number of days.  I’m very close but might be off by a day or two.   He had a battery of tests performed and received an IV drip and some medication.  No special tests and no special medication.  ie, Pretty much he just rented the room and had a few simple tests.  Anyway, he doesn’t have health insurance for economic reasons. (But now I’m sure he’ll run right out to buy some with the money he doesn’t have since Obama has mandated it.) 

I’m not going to get into all of the minutia but he was recently admitted to the hospital again for a third time.  And, by accident his bill popped up on the screen the first day there.  He saw his bill even though he was told that he wasn’t supposed to have.  Would you care to guess his bill?  I have played this on a few friends and most guessed something like $50,000.  His bill was $3 million.  No joke.  I still can’t believe it.  Well, I do but I mean it is beyond insanity.  Now I have another friend who works as a medical professional at another hospital owned by this corporation.  It is part of a large complex of regional hospitals.  Lots of bureaucracy.  Lot’s of fixed costs.  He said that he couldn’t comment on the billing because he didn’t understand the procedure for covering people without health insurance.  So, he didn’t know if this would be submitted to Medicaid for partial payment (the hospital case worker told my friend they were going to try to get him covered under Medicaid) or if it was representative of what would be written off as good will or some internal charging structure or what.  So, I’m clearly not in a position to say how that $3 million was going to be used.   But, by some measurements health care billing administration has become the largest profit center for these corporations. 

Regardless, this is a perfect example of what I have been saying is going to happen across every spectrum of the economy.  That is, in this cycle we are going to see massive failures of institutions of the ego/control or institutions of man.  This health care system is literally as unstable as the Fukushima nuclear facility.   I’m not making a joke.  I’m very serious.  This is a complex system that is very, very unstable even if it appears stable by analyzing surface data of corporate profits, price to earnings ratios, Tobin’s Q or other simple-minded metrics.  This system is simply awaiting the right inputs to send it into substantial instability or failure.  As I have noted time and again, Obama’s health care plan means absolutely nothing.    The Soviet Union passed numerous edicts from on high in some attempt to force its citizens into many actions that never worked or eventually collapsed.   In fact, that’s pretty much how the Soviet Union always worked.  Central planners who try to force illegitimacy onto the world will always fail.  Always.  We should have gotten an affordable, single-payer nonprofit bill that extended Medicare to all Americans.  An addendum that would have required a dozen pages rather than a new 2,500 page bureaucracy that benefited for-profit corporations.    

The cycle of volatility remains in full force.

posted by TimingLogic at 10:13 AM