Healthcare Needs Reform

warning – this turned into a long meta-post…

I got into an interesting Twitter discussion today with some folks about health insurance and ObamaCare.  I hate Twitter-debates about complex subjects, but this one didn’t go off the rails too badly.  I figured it was worthy of a blog post and some greater-than-140-character discussion.  You can scroll to the top here to see the initial tweet I was responding to.

When I write about health insurance, let me be clear about something off the bat:  I am writing from a point of view of expertise only in my own experiences with the System.   I am not a scholar on National Health Care.  I have not spent years studying global nationalized policies and their features and costs.   I cannot tell you what ObamaCare will do for you (or for me) or for our national health care system.   I can only tell you one thing, as a guy who buys his own high deductible health care plan: the current system is fucked.

About me:  In a past life, I worked at a global investment bank.  When I did (let’s say this was 2005), my wife and I had a comprehensive health insurance plan that cost about $900 / month.   It was top shelf – full coverage for everything – no limits, no deductibles.  I think there was a $20 copay to see the doctor, or $30 for the specialist, but it was a PPO plan where I could see anyone at any time without referrals.   I had to go to the ER once when I broke my knee.  I paid $50 out of pocket.

Fast forward to 2007, when I quit my job.  Now I got COBRA for 18 months or so, which meant that I could still be on my former employer’s plan, but I had to pay the cost – still about $900/month.  Fine.   18 months later, they kicked me off COBRA.  I called the insurer, and explained, “I just want to keep this plan – my COBRA is over, but I’m happy to keep paying you the $900 for it.”

“Sorry sir, you can’t do that,”  I’m informed.

“Why not?”  I don’t understand.  “I’m the same guy I was yesterday.”

“Risk pooling, sir,” was the answer.

“Risk pooling?  Am I more of a risk today than I was yesterday? I don’t understand?  I just want to keep this policy.”

“That’s not how it works, sir.”

“How much will this plan cost, then?”  I guess I’ll have to pay more.

“You can’t buy this plan, sir.”  she responds, and now I’m getting annoyed.

“WHY NOT?”  I am flummoxed. “You’re telling me you won’t even sell me this plan anymore?  This plan I’ve had for 9 years?   Because of my employment status?  Shouldn’t I be healthier now that I’m free to work out all the time instead of sitting at a desk for 10 hours a day fucking up my back and stuffing my face with burritos?”   I didn’t actually swear, but that’s what I was thinking.

“There’s no one to administer the plan, sir,” and this was the key reality: PAPERWORK.  That’s the first major problem with health insurance – my bank was no longer “administering” the plan, so there was no intermediary to handle the massive amounts of regulatory crap in the middle of the system.

The problem in New York City, as my wife and I quickly found out, though, is that it’s EXTREMELY difficult to buy your own health insurance if you’re not employed.   I tried to be a “writer” – after all, I was a blogger extraordinaire – but they said “no.”  So I said “I’m a trader.”  NO.   I was panicking, and exploring options via the Freelancer’s Union, when we ended up getting on my wife’s employer’s plan.

Fast forward to 2009 when we move to New Hampshire.   We purchase a plan from Anthem – $2500 deductible, preventative care covered, no maternity coverage – roughly $350/month.  Super – I’ll take it.  If I go to the doctor, I have to pay the full health insurance company negotiated rate, until I hit $2500 in a year.

Fast forward to 2011 when I wrote this post about my health insurance cost going up by 48% year over year.  So we switched to a plan with an $8000 annual deductible and roughly $300/month premium.   We get free preventative care (annual physical, etc) and pay for the first $8000 of coverage for everything else.   Prescriptions?  We pay the cost.  Not $5 to get it filled – we pay the negotiated rate.   If I need cholesterol meds or boner pills or something, I’m going to get hosed.

So anyway, let me give you a few more insights into my basic philosophy

1) I don’t believe doctors should have to work for minimum wage or be non-profit – I think they should be compensated for their expertise

There’s an old story of the plumber who is called in to the factory to fix a knocking pipe.   The pipe had been making a racket, and was driving the people in the factory crazy.   The plumber walked in, looked over the situation, nodded, took a deep breath, and walked over to one section of pipe.  He whacked it with a hammer and the noise stopped.    He walked over to the manager and said

“That will be $400.”

“FOUR HUNDRED DOLLARS? All you did was go bang on the pipe!” The manager protested

“Ahhh- but it’s not the banging on the pipe – it’s the KNOWING where to bang!”  The plumber replied.

This applies to doctors too.  Whatever – moving on.

2) I think one main problem with the current system is that the average user – and when I say “average user” I’m thinking “the guy who has a plan through his employer where once he pays his monthly premium he doesn’t care about the costs – he just pays his $20 copay and gets all the treatment he needs”  (note: that’s the guy I used to be!)  – the average user has NO IDEA how expensive the costs are, and more importantly, *he doesn’t care* because the insurance is paying for it, and he already paid for the insurance.

3) I believe that the free market generally offers a better solution than the government.  However, I believe that healthcare is regulated just enough to massively screw it up and limit competition.   The woman from Anthem basically told me that they could charge me whatever they wanted because they had no competition in New Hampshire.

4) I am far too ignorant about nationalized health care in other countries to comment on it, but it seems to me that there is plenty of anecdotal evidence that government involvement in their national systems makes for better systems than the one we currently have here.   It is quite possible/probable/likely that we still have the best doctors here, and that we do have the best doctors because of the privatized system, but I get the feeling that the average Brit or Canadian is a lot more satisfied with their healthcare system than we are with ours.

So now, since I’m not a healthcare scholar, I’ll just tell you a few of my own stories in the past few years regarding medical expenses.

1) My wife cut her finger a few years ago trying to pit an avocado.  She cut it to the tendon.  We went to the ER.  The bill was approximately:

$600 to walk in the door – ok – that’s a price you have to pay to have a facility where you can access emergency coverage at any time

$300 for the “surgery” kit

$300 for the doctor bill

There’s nothing really insane here – the costs aren’t cheap, but emergency care never is, right?  The issue here was that Anthem tried to bill us out of network.   I spoke to someone on the phone for 45 minutes, explaining that the out of network doctor who the bill was from wasn’t even the one who saw my wife.   She said it didn’t matter, blah blah blah, out of network.

I was flummoxed, and I hung up and called back, and got someone else on the phone. I said “are you telling me that when my wife cuts her finger to the tendon and is bleeding, I’m supposed to drive around until I find an in-network emergency room?”  (never mind that Concord Hospital is the main hospital in the area – and my insurance company is the main insurer in the area –  it’s not like I went off the beaten path.  “No – of course not – this should be covered in network – I’ll fix it.”  We still had to pay the prices I listed above, but just not the rates that were 50% higher for out of network.  Lesson here: patient advocacy is an issue.   You get different answers depending on who you talk to.

2) I broke my finger last year.

I went to urgent care, not the ER.  I actually thought the bill was pretty reasonable:

$200 for the facility charge (to walk in the door)

$100 for the xray

$100 for the doctor fee

The doctor put a splint on my finger and told me to go see an orthopedist.   I made an appointment for 2 days later, and in the meantime, I emailed the x-ray to my buddy who is an orthopedic surgeon.  He told me that there was nothing they’d do for me except to give me a smaller splint.  I said I wanted the smaller splint (the current one came down over my whole finger), so I kept the appointment.    In the orthopedist’s office, the doctor met me, told me they don’t operate on injuries like this, and that I’d be ok in 6-8 weeks.   Then his assistant put a new splint on my finger and I went home.

I got the bill:  $450, for office visit, and “setting of a fracture.”

Now this gets back to my point above about doctors who deserve to be compensated for their knowledge and work – it’s irrelevant that the doctor only took 90 seconds to tell me that my finger would heal  – he had the expertise to do so, and that’s what I’m paying him for.   However, I was worried that I was being mis-billed for the “setting of the fracture.”  I called Anthem, and questioned them on it.   This gets back to my point about the average guy needing to have a stake in the system:  do you think some guy who gets an EOB (explanation of benefits) in the mail  where he doesn’t have to pay for it anyway is going to take the time to call the insurance company and ask if the stuff is being billed correctly? of course not.  He doesn’t care – it’s not his money!  Of course, it really is his money – he pays for it via insurance costs, but that’s a different topic.   Also, the cost of my doctor’s expertise is a topic that can be discussed: what if that diagnosis was made by a doctor in India who looked at my x-ray, for 1/4 of the cost?  Again – a topic for another day.

So Anthem says “yeah – it says here that the changed the splint on your finger.”

I said “the EOB says that it’s being billed as setting of the fracture.  They didn’t set any fracture.  They gave me a new little foam/metal splint.”

“Yeah – that’s right – it’s all normal,” she assured me, and I didn’t believe her for a minute.   Unfortunately, the doctor in this case was a neighborhood guy who I knew second hand, so Mrs. Dynamite forbade me from making a big deal out of it and challenging them further.

3) I go to the dermatologist every year.  The bill from my 2011 visit:

$165.75 for the office visit

$204.28 to have a mole removed

$66.49 to have a skin tag removed

$195 for the lab work on the mole

$125 for the lab work on the skin tag

$756 total

How ’bout these costs?  Are they reasonable?  I have a slight quibble with the $200 for the mole removal – the guy gives me a shot of novocaine and then slices off the mole – no stitches even.  The skin tag was annoying – after the doctor did the mole, he said “is there anything else you are concerned about today?”  Since I was already lying mostly-naked on the table, I asked him, in a joking manner, “If I get drunk and cut this skin tag off myself, will I bleed out?”  As I showed him the skin tag under my arm.  I wasn’t being facetious – that was my plan.

“Here, let me take care of it,” he said, and snipped it with a pair of scissors.  No novocaine, nothing.   Now, if I’d known that this was going to cost me $66 plus another $125 in lab fees, I would have declined the service.  That’s another huge problem – lack of transparent pricing.

4) My wife went to urgent care with flu-like symptoms.

The bill came to roughly $550 including a prescription for nasal spray.   This is prohibitive for most people, and lack of treatment results in much higher costs for everyone as the flu/virus spreads.   I think the most basic improvement in the health care system that we can make is a way for people to easily and cheaply go to a “clinic” of some sort and get a prescription drug for a basic problem or diagnosis.   That cost should be closer to $100 than $600, in my opinion.

So anyway… One of my main points in writing this long rambling post is that the libertarian refrain of “nothing gets better when you insert the government into the middle of it” isn’t entirely accurate here.  I think the problem is that the government is already involved (via regulation) enough in the health care system to completely screw it up.   Thus, more involvement won’t necessarily be a step back.  There also seems to be ample evidence in other countries to support this claim.

Something I was trying to explain on Twitter today is that one reason mandates don’t bother me is precisely because we, as a society, are NOT prepared to let the uninsured die on the hospital’s doorsteps.  In other words, I don’t have any problem with the libertarian ideology: “We should let people make their own choice as to if they want to buy health insurance or not,” – sure – but that only works if people who chose NOT to buy insurance don’t get treated if they can’t pay!  In reality, we treat those who can’t pay anyway, so it’s the worst of all worlds.

Look, I know one thing about our health insurance system from my personal experiences over the last few years, and that’s that the system needs reform.   I’m speaking simply as someone who buys his own insurance and pays his own medical bills with a high deductible.  I think we’ve (my wife and I, I mean) been lucky in the sense that we haven’t faced any major medical events recently, we haven’t been bankrupted by huge bills, or ruined by the system – but that doesn’t mean I can’t see that it needs to be changed.

If I had any magic answers or silver bullets, you can bet I’d share them.  I don’t, but I think that one thing that will help is giving more people a stake in their care.   If people realize how much their insurance companies are being billed every time they go to the doctor (yes, the may get EOBs in the mail, but when you’re not paying the bill, you don’t really care), I think the pushback would be staggering.

So this is why I’m not raging against “Obamacare.”  In my opinion, it cannot possibly make the current system worse.


My Health Insurance Premium Just Went Up By 48%

Letting Houses Burn – On buying insurance only when you need it


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