WEBVTT - It's A Government Healthcare Complex: Craig Gottwals Talks To A&G 0:00:00.080 --> 0:00:03.760 Please join me in welcoming to the show. Craig Gottwaals, 0:00:04.040 --> 0:00:07.360 aka the healthcare Guru. You know what, Craig, I don't 0:00:07.360 --> 0:00:08.879 actually have your website and stuff in front of me. 0:00:08.920 --> 0:00:10.399 I forgot to grab it, so we'll get to that 0:00:10.400 --> 0:00:12.319 in a little bit. But how are you, my friend? 0:00:14.120 --> 0:00:16.200 I am well, my friend, and you know, over here 0:00:16.239 --> 0:00:19.240 at our house, we've got candles going and we're really solemn, 0:00:19.280 --> 0:00:21.560 and it's hashtag prayers for Jack. I hope he got 0:00:21.560 --> 0:00:23.520 the horse paste that I sent over to him. 0:00:24.079 --> 0:00:27.440 Nah. I think he's going with more conventional care. But 0:00:27.480 --> 0:00:29.800 i'd ask you how the bass are biting. But it's 0:00:29.840 --> 0:00:31.760 so hot, it's like bass soup in the lakes. I'd 0:00:31.800 --> 0:00:34.159 imagine when it gets cooler, though, We've got to we've 0:00:34.159 --> 0:00:35.120 got to go fishing again. 0:00:36.080 --> 0:00:38.199 Yeah. Absolutely. It was one of the best springs in 0:00:38.240 --> 0:00:40.480 the last twenty years in northern California, so I expect 0:00:40.520 --> 0:00:41.640 fall will be similar. 0:00:41.680 --> 0:00:44.240 My friend, excellent, Okay, enough fish and talk. 0:00:44.640 --> 0:00:46.959 You sent along a slide show so I could get 0:00:47.000 --> 0:00:49.240 ready for this conversation, which I found very, very helpful 0:00:49.240 --> 0:00:52.080 and informative. I love the quote from Warren Buffett. Buffett 0:00:52.479 --> 0:00:57.720 medical costs are the tapeworm of American economic competitiveness. And 0:00:57.800 --> 0:01:00.880 it's shocking some of the information gave about the rise 0:01:00.920 --> 0:01:03.960 in healthcare costs over the last twenty twenty five years. 0:01:03.960 --> 0:01:05.200 You want to fill us in on some of that. 0:01:06.280 --> 0:01:09.760 Yeah, it's just devastating, Joe. You know, you guys have 0:01:09.840 --> 0:01:12.560 covered this story in out of Stockton, California, with two 0:01:12.560 --> 0:01:16.679 shop workers, two convenience store workers that are that are 0:01:16.760 --> 0:01:19.200 watching a guy pill for their store, and there's a 0:01:19.560 --> 0:01:22.200 there's a there's a guy commentating as he's filming, saying 0:01:22.200 --> 0:01:24.280 nothing you can do, nothing, you can do, And meanwhile 0:01:24.319 --> 0:01:27.120 this shoplifters filling a garbage can with cigarettes and all 0:01:27.200 --> 0:01:31.039 kinds of stuff. Finally, the shopkeepers they grabbed the guy 0:01:31.200 --> 0:01:33.280 and they just start beating his lower body and his 0:01:33.360 --> 0:01:36.200 legs with a stick. And I think that's that's basically 0:01:36.240 --> 0:01:38.800 where American employers are right now. They're just they're just 0:01:38.920 --> 0:01:42.440 totally fed up with the pilfering that's been going on 0:01:42.440 --> 0:01:45.920 on their bottom lines and American workers too. As we 0:01:45.959 --> 0:01:48.960 look at just go ahead, sorry, Joe, go ahead. 0:01:48.800 --> 0:01:50.440 Well no, that's okay. I just I want to get 0:01:50.480 --> 0:01:53.400 to those That's a great metaphor. I love that you 0:01:53.400 --> 0:01:55.600 send along a slide that in the year two thousand, 0:01:56.360 --> 0:01:59.559 the cost of family coverage who was about twenty percent 0:01:59.560 --> 0:02:02.840 of the tip book workers' annual salary, and now that 0:02:02.960 --> 0:02:09.120 twenty percent is fifty four percent, which is an astounding rise. 0:02:10.520 --> 0:02:12.960 It's just been it's something I've been in this in 0:02:13.000 --> 0:02:16.399 this industry, Joe full time for twenty two years now. 0:02:16.680 --> 0:02:19.120 And when I started twenty two years ago, everybody was saying, 0:02:19.160 --> 0:02:21.880 this is unsustainable, this is unsustainable. How can we how 0:02:21.880 --> 0:02:24.280 can we do this? And of course now we look 0:02:24.320 --> 0:02:26.720 at you know, average pay has gone up from thirty 0:02:26.720 --> 0:02:29.560 two thousand to forty two thousand dollars for the average worker. 0:02:29.919 --> 0:02:32.920 But like you said, healthcare, the cost of family coverage 0:02:32.919 --> 0:02:35.520 has gone from sixty five hundred to twenty two thousand, 0:02:35.639 --> 0:02:38.760 five hundred, so now it gobbles up fifty four percent 0:02:38.760 --> 0:02:42.000 of somebody's pay. One other stat just to keep the 0:02:42.080 --> 0:02:45.080 easy one to keep in mind, premiums are up just 0:02:45.080 --> 0:02:48.559 since the year two thousand, three hundred percent family premiums 0:02:48.600 --> 0:02:52.079 three times average worker pay only up one hundred percent. 0:02:52.960 --> 0:02:55.720 So it's just it's the hidden tax that we're all paying, 0:02:55.919 --> 0:02:58.160 and it's a slow depth seven and a half percent 0:02:58.240 --> 0:03:01.480 increases year after year after your year, when we're only 0:03:01.480 --> 0:03:04.200 getting one to two percent on our pay. And of 0:03:04.200 --> 0:03:08.240 course it's just it's just crushing workers and it's crushing businesses, 0:03:08.720 --> 0:03:09.160 and it's. 0:03:09.040 --> 0:03:11.799 Wildly out of proportion to other forms of inflation too. 0:03:11.880 --> 0:03:12.280 Correct. 0:03:13.960 --> 0:03:17.520 Oh, yeah, absolutely, yeah, I mean there's nothing healthcare. The 0:03:17.560 --> 0:03:21.320 only thing that rivals healthcare to other things your local 0:03:21.440 --> 0:03:25.639 electric company and your college tuitions. Those are the only stition. 0:03:26.800 --> 0:03:27.680 Yeah that keep up. 0:03:28.480 --> 0:03:30.480 Well, go ahead and take the ball and run with it. 0:03:30.520 --> 0:03:32.880 What's the next step in understanding your stuff? What do 0:03:32.919 --> 0:03:33.400 you have for us? 0:03:33.520 --> 0:03:36.600 Now? Many of us, many of us felt that Obamacare 0:03:36.760 --> 0:03:39.040 was going to really be hard on the insurance companies. 0:03:39.200 --> 0:03:41.600 You know, many of us thought that, Okay, you're putting 0:03:41.640 --> 0:03:44.360 all these restrictions in place, You're going to force all 0:03:44.360 --> 0:03:48.080 these extra people onto the plans without really good leverage, 0:03:48.080 --> 0:03:51.160 to keep them on the plans without without without necessarily 0:03:51.160 --> 0:03:54.880 getting a whole lot more money in premium. And I'll 0:03:54.880 --> 0:03:57.000 be the first to admit that is a topic on 0:03:57.080 --> 0:04:00.040 Obamacare about which I couldn't have been more wrong. Joe. So, 0:04:01.680 --> 0:04:04.400 if we just look back to two thousand and nine, 0:04:04.680 --> 0:04:08.560 when Obamacare was first you know, written just right before 0:04:08.600 --> 0:04:14.440 Obama signed it. You had you look at cost increases 0:04:14.440 --> 0:04:17.679 and stock increases since that time. So from two thousand 0:04:17.720 --> 0:04:19.520 and nine to today, just to look at the S 0:04:19.560 --> 0:04:21.680 and P five hundred as a benchmark, it's up four 0:04:21.760 --> 0:04:24.400 hundred and twenty two percent. That's the largest five hundred 0:04:24.400 --> 0:04:24.920 companies in. 0:04:24.839 --> 0:04:26.680 The US, right, Okay, got it? 0:04:26.760 --> 0:04:31.040 The average, the average of the five largest insurance companies 0:04:31.120 --> 0:04:36.040 medical insurers are up nineteen hundred percent over that same timeframe. 0:04:36.160 --> 0:04:38.560 So they were in on it the whole way. They 0:04:38.640 --> 0:04:41.960 had the game was rigged. They worked with the federal government, 0:04:42.040 --> 0:04:46.440 with hospitals, and with pharmaceutical industry to absolutely ensure that 0:04:46.520 --> 0:04:49.960 no matter what happened, they would remain profitable, they could 0:04:50.000 --> 0:04:53.600 keep the very large increases, and that we the taxpayer, 0:04:53.600 --> 0:04:55.880 would ultimately make them whole. We the taxpayer, and we 0:04:56.000 --> 0:04:58.080 the premium payer for those of us that still get 0:04:58.120 --> 0:04:59.160 insurance at work. 0:05:00.120 --> 0:05:02.440 So just for people who aren't taking notes or driving 0:05:02.520 --> 0:05:05.680 or what have you. So the SNP or the insurance 0:05:05.720 --> 0:05:09.320 the average of the insurance carrier stock prices has more 0:05:09.360 --> 0:05:12.520 than quadrupled the rise of the S and P five 0:05:12.640 --> 0:05:16.279 hundred as a whole, which is crazy. Now, those of 0:05:16.320 --> 0:05:18.599 us who believe in free markets are not shocked that 0:05:19.000 --> 0:05:23.800 when the government became involved in a ginormous part of 0:05:23.839 --> 0:05:28.560 the American economy, the rent seeking began, the lobbying began, 0:05:29.080 --> 0:05:32.520 and the big powerful companies ended up getting a huge 0:05:32.640 --> 0:05:35.359 disproportionate share of taxpayer money in a way that the 0:05:35.360 --> 0:05:36.880 free market would never have allowed. 0:05:37.120 --> 0:05:42.360 Would you agree, totally agree, that's exactly what happened. There 0:05:42.360 --> 0:05:44.839 have now been books written on this topic, and it 0:05:44.920 --> 0:05:48.440 just turns out that every single industry, whether you're looking 0:05:48.440 --> 0:05:54.200 at hospitals, insurers, brokers, even my industry, the pharmaceutical industry, 0:05:54.960 --> 0:05:57.560 every single one of us had a lobbying group in 0:05:57.680 --> 0:06:01.120 DC prior to two thousand and nine. We all, all 0:06:01.160 --> 0:06:03.640 of our lobbying groups worked with the federal government, worked 0:06:03.640 --> 0:06:07.960 with the Obama administration, and we as a combined entity, 0:06:08.480 --> 0:06:11.719 ensured that no matter what happened, we would be made 0:06:11.760 --> 0:06:14.800 whole and taken care of in this process. And that's 0:06:14.839 --> 0:06:20.360 exactly what's happened. Everybody's getting filthy rich on the provision 0:06:20.360 --> 0:06:24.120 of health insurance while American businesses and in US workers 0:06:24.200 --> 0:06:26.480 are struggling now to pay the bill, to the point 0:06:26.480 --> 0:06:29.120 where the average worker sees more than half of their 0:06:29.160 --> 0:06:30.920 pay go to premiums. 0:06:31.360 --> 0:06:36.640 What's America's number one lobby. 0:06:35.560 --> 0:06:39.920 Number one lobby, as reported by Axios is healthcare seven 0:06:40.000 --> 0:06:42.960 hundred million in twenty twenty one, the last reported stat 0:06:43.000 --> 0:06:43.680 I saw. 0:06:44.640 --> 0:06:47.719 One year seven hundred million dollars in bribes. 0:06:47.839 --> 0:06:54.880 Essentially, yeah, exactly exactly. And the largest client of the 0:06:54.880 --> 0:07:00.520 healthcare industry is the federal government, primarily through Medicare and Medicaid. 0:07:00.920 --> 0:07:04.280 So see here's this is where you get the crazy 0:07:04.360 --> 0:07:06.640 hidden tax that we've talked about here before, and that's 0:07:06.680 --> 0:07:10.880 the politicians don't want to just start increasing taxes willy 0:07:10.960 --> 0:07:14.680 nilly because that's bad for reelection, so they keep Medicare 0:07:14.720 --> 0:07:18.600 and Medicaid on a path where those reimbursements only typically 0:07:18.600 --> 0:07:21.840 go up about one percent per year, even though true 0:07:21.920 --> 0:07:25.480 medical inflation is roughly four percent per year. So then 0:07:25.520 --> 0:07:28.880 what happens is hospitals have to work with insurance companies 0:07:28.880 --> 0:07:32.800 to negotiate seven or eight percent renewal increases for employers 0:07:33.360 --> 0:07:35.520 to cover the fact that they're not making as much 0:07:35.560 --> 0:07:38.120 money as they would like to make for Medicare and Medicaid. 0:07:38.400 --> 0:07:44.680 The number one customer of the insurance industry. 0:07:43.160 --> 0:07:46.520 Right, So, okay, so the government is under the government 0:07:46.600 --> 0:07:50.160 is underpaying, so private insurance has to weigh. 0:07:50.040 --> 0:07:52.360 Overpay for medical care. 0:07:53.520 --> 0:07:54.920 You know, I think I know the answer to this, 0:07:55.000 --> 0:07:58.280 But why do the private insurance companies put up with it? 0:07:58.360 --> 0:08:00.280 Is it because they can go ahead and go out 0:08:00.280 --> 0:08:02.560 just for premiums and we don't see any alternative to 0:08:02.600 --> 0:08:04.160 pay in them. 0:08:04.480 --> 0:08:08.480 Oh? Absolutely, because the more premium we pay, the more 0:08:08.520 --> 0:08:11.320 they make as well. Obviously, right, the more the broker makes, 0:08:11.360 --> 0:08:14.520 the more the insurance company makes, the more the hospital makes. 0:08:14.840 --> 0:08:17.840 So what you really see happening in healthcare generally is 0:08:18.280 --> 0:08:22.920 hospitals will mark up the cost of a procedure. And 0:08:22.920 --> 0:08:25.440 again this is just hospitals, not doctors. The problem is 0:08:25.520 --> 0:08:28.400 not typically with your local doctor office, it's with facilities. 0:08:28.400 --> 0:08:32.800 So hospitals will say we're going to pay three hundred 0:08:32.880 --> 0:08:36.040 percent of what Medicare would pay for that shoulder surgery 0:08:36.080 --> 0:08:39.040 as an example, and that is roughly six hundred percent 0:08:39.040 --> 0:08:41.400 of our actual costs. And you say, well, Craig, how 0:08:41.400 --> 0:08:43.760 do you know their costs? Well, in order for them 0:08:43.800 --> 0:08:46.400 to receive money from the federal government through Medicare, they 0:08:46.400 --> 0:08:48.920 have to self report their costs. So I know exactly 0:08:48.960 --> 0:08:52.480 what their real costs are, and I know what Medicare pays. 0:08:52.520 --> 0:08:56.120 That's all public information. So what happens is private employers 0:08:56.120 --> 0:09:00.720 are basically paying It works out too roughly twenty dollars 0:09:00.720 --> 0:09:04.520 per employee per month. You're paying for the privilege of 0:09:04.559 --> 0:09:07.360 a fifty percent discount on something that's been marked up 0:09:07.400 --> 0:09:09.960 six hundred percent. And now that's a lot of numbers, 0:09:09.960 --> 0:09:12.440 but that's what's going on. Is you have this shell game, 0:09:12.480 --> 0:09:16.520 you have this this obscured price tag that's hidden that says, hey, 0:09:16.559 --> 0:09:19.720 the cost of that shoulder surgery is is you know, 0:09:19.960 --> 0:09:22.280 we will just say it's two hundred thousand dollars and 0:09:22.320 --> 0:09:24.200 then but you know, good news, good news, we're going 0:09:24.240 --> 0:09:26.600 to give you a fifty percent discount. With your large 0:09:26.600 --> 0:09:28.320 insurance plan, you're only going to have to pay one 0:09:28.360 --> 0:09:30.960 hundred thousand dollars. But then when you get down to 0:09:31.280 --> 0:09:33.760 the nuts and bolts of it, the actual cost to 0:09:33.840 --> 0:09:36.920 provide that surgery is like twenty thousand dollars. 0:09:38.200 --> 0:09:38.680 Wow. 0:09:38.720 --> 0:09:41.319 So on a large scale in our health plans. 0:09:41.800 --> 0:09:42.000 Wow. 0:09:42.080 --> 0:09:44.520 Meanwhile, the government's paying a tiny fraction of that, like, 0:09:45.160 --> 0:09:49.079 you know, way down less than you know, the hospital 0:09:49.080 --> 0:09:49.960 could stay in business. 0:09:50.000 --> 0:09:50.600 Probably on. 0:09:50.920 --> 0:09:52.880 Well, well, I want to yeah, I want to be 0:09:52.920 --> 0:09:56.280 careful about that. So I have a number of hospital clients, 0:09:56.280 --> 0:09:58.880 and I speak with these CFOs regularly, and pretty much 0:09:58.920 --> 0:10:02.480 across the board, every hospital chief financial officer will tell 0:10:02.520 --> 0:10:06.880 you we can survive on Medicare. What Medicare, that's the 0:10:06.920 --> 0:10:08.520 one we pay for the old timers. I mean, we 0:10:08.559 --> 0:10:10.880 would have to tighten our budgets, we would have to 0:10:10.960 --> 0:10:13.080 run more efficiently, we would have to we would cut 0:10:13.080 --> 0:10:15.880 out some waste and abuse. But we can probably get 0:10:15.880 --> 0:10:19.280 by at Medicare. It's Medicaid the one that we can't 0:10:19.280 --> 0:10:22.080 because that on average across the country pays about twenty 0:10:22.080 --> 0:10:25.480 percent less than Medicare. So now you are getting into 0:10:25.520 --> 0:10:28.960 a position where you're like fifteen percent under their real costs. 0:10:29.400 --> 0:10:33.360 So it's Medicare that causes the problem. Medicare. Excuse me, Medicaid, Medicare, 0:10:33.559 --> 0:10:34.959 most hospitals can get by it. 0:10:35.880 --> 0:10:38.640 Bass fishing tip number one. Slow down. He's always telling me, 0:10:38.679 --> 0:10:41.520 slow down, don't slow down. 0:10:41.720 --> 0:10:44.440 Let him come to it anyway, Right when you get 0:10:44.480 --> 0:10:46.720 to the point where you think you cannot go any slower, 0:10:47.520 --> 0:10:48.360 slow at the hell that. 0:10:48.360 --> 0:10:51.280 I'm a little bit more, all right, beautiful. 0:10:51.559 --> 0:10:53.959 So if you want to get in contact with Craig 0:10:54.080 --> 0:10:58.360 for bass fishing tips or advice on healthcare and benefits 0:10:58.360 --> 0:11:00.199 and that sort of thing, all the informations going to 0:11:00.200 --> 0:11:02.240 be at Armstrong and Getty dot com will make it 0:11:02.240 --> 0:11:05.720 easy to follow. Plus this discussion will be edited up 0:11:05.720 --> 0:11:07.040 into an Armstrong and Getty. 0:11:06.760 --> 0:11:07.760 Extra Large podcast. 0:11:07.920 --> 0:11:09.960 Having said that, I'm looking at the map you sent 0:11:10.080 --> 0:11:14.320 of employer payments for a given medical procedure as a 0:11:14.320 --> 0:11:18.080 percentage of Medicare you poor chumps? We poor chumps with 0:11:18.160 --> 0:11:22.040 private insurance in California are paying three hundred and eleven percent. 0:11:22.360 --> 0:11:24.840 In Texas it's a mere two hundred and sixty nine percent, 0:11:25.080 --> 0:11:26.840 three hundred and sixteen percent. 0:11:28.160 --> 0:11:29.800 Is that Colorado or Nebraska? 0:11:29.880 --> 0:11:33.000 Rather, it's three hundred and four percent Washington State, On 0:11:33.040 --> 0:11:36.040 and on and on and then the slide you sent 0:11:36.040 --> 0:11:38.680 about the fair price for a CT scan, for instance, 0:11:38.720 --> 0:11:41.720 in the San Francisco Bay area, can you explain that 0:11:41.760 --> 0:11:42.120 to us? 0:11:43.840 --> 0:11:46.360 Yeah, so you exactly nailed it, Joe. Across the country, 0:11:46.600 --> 0:11:49.600 we're roughly we have if we're in that thirty percent 0:11:49.640 --> 0:11:52.480 of people that are roughly paying for our own health care, 0:11:52.559 --> 0:11:54.920 there's only about thirty percent of us in that boat anymore. 0:11:55.840 --> 0:11:59.600 We pay three times what the federal government pays with Medicare, 0:11:59.640 --> 0:12:02.280 and hospital CFOs will tell you we can we can 0:12:02.320 --> 0:12:05.680 make money on Medicare. Okay, So hospital CT scan, So 0:12:05.840 --> 0:12:07.760 this is just I sent you a couple examples as 0:12:07.760 --> 0:12:09.080 will just walk through one of them. This is a 0:12:09.120 --> 0:12:11.720 real hospital in the Bay Area. We won't name any names. 0:12:12.520 --> 0:12:15.720 They bill an average of thirty five hundred dollars for 0:12:15.800 --> 0:12:17.480 a CT scan, and. 0:12:17.440 --> 0:12:19.040 They're the cheapest one in the chart. 0:12:19.320 --> 0:12:21.439 But go ahead, they're the cheapest on the chart, that's right. 0:12:21.800 --> 0:12:24.440 They self report the cost of that two hundred and 0:12:24.440 --> 0:12:29.280 fifty four dollars. Okay, Medicare applies its formula, so they 0:12:29.400 --> 0:12:31.440 do a little bit of markup on the cost. Typically, 0:12:31.600 --> 0:12:34.280 and the Medicare would pay three hundred and three dollars 0:12:34.440 --> 0:12:39.160 for that procedure. But the average national insurance company of 0:12:39.200 --> 0:12:41.080 which there are four or five depending on how you 0:12:41.160 --> 0:12:44.160 count them, would would give you a fifty percent discount 0:12:44.160 --> 0:12:47.079 off of that pie in the sky fantasy unicorn riding 0:12:47.200 --> 0:12:50.720 cotton candy eating build rate of thirty five hundred, So 0:12:50.760 --> 0:12:55.400 they would they would reimburse seventeen hundred for that thirty 0:12:55.400 --> 0:12:57.959 four hundred or thirty five hundred, whatever you whatever you 0:12:58.040 --> 0:13:00.160 want to call it. So you know, you look at 0:13:00.200 --> 0:13:02.040 the bill, you think, wow, it's thirty five hundred. I'm 0:13:02.040 --> 0:13:04.400 going to pay seventeen fifty. I'm getting fifty percent off. 0:13:04.400 --> 0:13:07.199 That's awesome until you find out Medicare pays three hundred 0:13:07.200 --> 0:13:10.080 and three dollars. And I tell you that facility operators 0:13:10.120 --> 0:13:12.240 tell you, yeah, we can make money on Medicare. 0:13:13.240 --> 0:13:15.560 Yeah, it's like your babysitter walks in and says, normally 0:13:15.559 --> 0:13:17.320 I charge one hundred bucks an hour, but I'll let 0:13:17.400 --> 0:13:19.160 you go for fifty or whatever. And you're thinking, oh, 0:13:19.240 --> 0:13:23.040 a fifty percent discount. Not boy, I'm a chump. And 0:13:23.160 --> 0:13:25.440 the important thing to realize, and I'm looking at the clock. 0:13:25.520 --> 0:13:27.600 I think next segment we will get to the solution 0:13:27.640 --> 0:13:30.160 because we barely have two minutes. But what people need 0:13:30.160 --> 0:13:34.960 to understand is that you're paying twice, three times, four 0:13:35.080 --> 0:13:38.480 or five six times as much as a Medicare patient does, 0:13:38.679 --> 0:13:42.280 which still gives the medical provider a fair amount of profit. 0:13:43.400 --> 0:13:47.600 And that enormous difference that you're paying in premiums and 0:13:47.679 --> 0:13:52.240 everything that is a tax, that is money from you 0:13:53.240 --> 0:13:57.439 going to pay for a government program, and I don't 0:13:57.480 --> 0:14:02.880 think people really comprehend it that simply. Meanwhile, and if 0:14:02.920 --> 0:14:05.320 you're just tuning in, we mentioned this last segment, the 0:14:05.440 --> 0:14:10.240 insurance companies are making scads of money because they're in 0:14:10.320 --> 0:14:13.000 bed with the government on the scheme, and really the 0:14:13.000 --> 0:14:15.200 only loser is the private insurance consumer. 0:14:15.600 --> 0:14:16.240 Am I correct? 0:14:17.880 --> 0:14:21.640 You've got it better than any media person ever has. 0:14:22.080 --> 0:14:28.040 Wow Wow gold star for me any anyway, So in 0:14:28.120 --> 0:14:32.200 thirty seconds, can you describe slash tease what we're going 0:14:32.280 --> 0:14:36.000 to talk about in the next segment, the cure to 0:14:36.040 --> 0:14:37.560 this or reference based pricing? 0:14:38.600 --> 0:14:41.680 Yeah, reference based pricing, fair market pricing, value based pricing. 0:14:41.680 --> 0:14:43.360 There's a lot of different names for it because it 0:14:43.400 --> 0:14:47.120 is so new and revolutionary. In a nutshell, if you 0:14:47.200 --> 0:14:49.840 take the premise that they can make money on medicare, 0:14:50.240 --> 0:14:52.400 what happens if we go ahead and just offer to 0:14:52.400 --> 0:14:55.040 pay one hundred and forty percent of medicare, which is 0:14:55.040 --> 0:14:58.280 still half of what your employer plan pays. We can 0:14:58.360 --> 0:15:01.280 cut our costs darn near half at that point, right. 0:15:01.600 --> 0:15:04.320 What happens if we do that? What kind of acceptance 0:15:04.360 --> 0:15:07.040 will we get in the marketplace if we decide to 0:15:07.040 --> 0:15:11.200 pay forty percent more than their largest customer, which is Medicare. 0:15:11.920 --> 0:15:17.560 Your health insurance costs have skyrocketed. 0:15:16.640 --> 0:15:18.120 Compared to the rate of inflation. 0:15:19.160 --> 0:15:25.720 Your insurance premiums have skyrocketed since Obamacare passed. All those 0:15:25.760 --> 0:15:28.640 costs to people with private insurance through their employer whatever 0:15:28.680 --> 0:15:34.160 have gone sky high compared to inflation. Meanwhile, the profits 0:15:34.280 --> 0:15:39.440 of the insurance carriers have been quadrupled the rise of 0:15:39.480 --> 0:15:44.440 the S and P five hundred. They're making unimaginable amounts 0:15:44.440 --> 0:15:52.680 of money off of you as you subsidize Medicare and Medicaid. 0:15:53.280 --> 0:15:56.120 It's a hidden tax. You're paying hundreds or thousands of 0:15:56.120 --> 0:15:59.280 dollars a year to pay for those government programs. 0:15:59.440 --> 0:16:00.640 But it's not a tax. 0:16:01.120 --> 0:16:05.360 It's your insurance premiums because your insurance company pays sky 0:16:05.440 --> 0:16:08.720 high prices to the hospitals to cover, you know, the 0:16:09.240 --> 0:16:12.080 government programs to make sure everybody makes plenty of profit. 0:16:12.280 --> 0:16:15.040 And nobody's talking about this. Did I get anything wrong 0:16:15.080 --> 0:16:16.400 in that description, Craig. 0:16:17.440 --> 0:16:19.400 No, you do so good at that, Joe, I would 0:16:19.440 --> 0:16:21.400 just the only nuance I would add is that is 0:16:21.440 --> 0:16:25.440 that it's not just because of government underfunding, which we 0:16:25.480 --> 0:16:28.640 know it certainly is with respect to Medicaid for sure, 0:16:29.000 --> 0:16:32.600 but it's also because, hey, what this private industry likes 0:16:32.640 --> 0:16:37.880 to do. It likes to maximize profit. So pharmaceutical companies, hospitals, insurers, 0:16:38.000 --> 0:16:41.200 and brokers are all maximizing profit on this hidden tax 0:16:41.240 --> 0:16:45.000 that's obfuscated by the fact that typically people don't see 0:16:45.000 --> 0:16:47.000 the prices they pay for healthcare. They don't know. They 0:16:47.040 --> 0:16:49.960 just know their paycheck isn't what it should be. And 0:16:50.040 --> 0:16:52.600 so one of the things that's made this more possible 0:16:52.600 --> 0:16:54.680 in the last few years. Joe Is and you and 0:16:54.720 --> 0:16:57.520 I and Jack did a podcast about this probably four 0:16:57.600 --> 0:17:02.040 years ago now where Trump put in some transparency rules 0:17:02.080 --> 0:17:05.440 and then thankfully when Biden came into office he kept them. 0:17:05.760 --> 0:17:08.560 So there's and I think I told you way back then. 0:17:08.600 --> 0:17:10.800 I said this is going to be a landslide. This 0:17:10.880 --> 0:17:14.000 is going to change healthcare forever, and now we're finally 0:17:14.040 --> 0:17:16.800 starting to see it. That's what's going on. These employers 0:17:16.800 --> 0:17:19.119 are taking that wooden bat like those gents in the 0:17:19.200 --> 0:17:22.040 in the convenience store in Stockton, and they are starting 0:17:22.080 --> 0:17:24.960 to whack away at this system that's been pillaging them 0:17:25.000 --> 0:17:25.560 for so long. 0:17:26.640 --> 0:17:29.280 Okay, and there's there was one more nuance I wanted 0:17:29.280 --> 0:17:33.720 to get to it flitted out of my mind. Dang 0:17:33.760 --> 0:17:38.199 it about the whole Oh, it doesn't matter. So so 0:17:38.359 --> 0:17:42.160 because of that transparency that Donald J. Trump, God rests 0:17:42.200 --> 0:17:46.439 him or God bless him, He's not dead because of 0:17:46.480 --> 0:17:49.919 that transparency. Now that's given a tool. Oh you know 0:17:49.960 --> 0:17:52.720 what I was going to say was, so you've got 0:17:52.800 --> 0:17:55.760 all that profit being made, maximizing the profit in the 0:17:55.760 --> 0:17:58.919 insurance companies, the hospitals whatever. I'm pro profit, and I 0:17:58.960 --> 0:18:01.879 know you are too. We're pro the free market. But 0:18:02.000 --> 0:18:04.719 this is the last thing. This is the free market. 0:18:04.920 --> 0:18:09.800 It's accommodation of monopolies. And then the government so heavily involved. 0:18:10.200 --> 0:18:13.240 The companies have to beg and lobby the government, and 0:18:13.240 --> 0:18:14.720 they're all in on it together. 0:18:16.119 --> 0:18:19.199 It's a government healthcare complex because and I'll tell you 0:18:19.240 --> 0:18:23.280 what made this made Obamacare so bad, Joe. Prior to Obamacare, 0:18:23.560 --> 0:18:27.520 Democrats generally wouldn't take money from the pharmaceutical industry and 0:18:27.520 --> 0:18:30.400 from big insurers. That was kind of a thing Democrats 0:18:30.440 --> 0:18:34.400 wouldn't do. Well. Obama changed all that because Obama realized 0:18:34.440 --> 0:18:36.520 that to get this legislation passed, he was going to 0:18:36.600 --> 0:18:38.760 have to take that money from those players and so 0:18:38.960 --> 0:18:42.280 once those floodgates opened, once you had okay, now Republicans 0:18:42.280 --> 0:18:45.000 and Democrats can dip their hands into the largest industry 0:18:45.040 --> 0:18:47.480 in America and just take as much as they want 0:18:47.480 --> 0:18:52.480 from lobbyists, then you had the complete proliferation of all 0:18:52.520 --> 0:18:58.200 of this, I would say, corruption influencing any regulation or 0:18:58.280 --> 0:18:59.160 laws we might have had. 0:19:00.000 --> 0:19:02.160 Ok So, let's get back to the transparency that Trump 0:19:02.200 --> 0:19:06.960 introduced and Biden continued, Now, you know the hospital self 0:19:06.960 --> 0:19:08.640 reported costs and stuff. 0:19:08.800 --> 0:19:12.160 So how has that been helpful? How's that been a tool? 0:19:13.640 --> 0:19:16.800 Well, so what has happened is, and here's the free market. 0:19:16.880 --> 0:19:20.320 There are entities called reference based repricers that have popped up, 0:19:20.800 --> 0:19:24.040 and what they're doing is they're aggregating that data and 0:19:24.040 --> 0:19:28.120 they're saying, Okay, we know at Hospital X, a rotator 0:19:28.160 --> 0:19:34.320 cuff surgery is actually costs We'll say fifteen thousand dollars 0:19:34.640 --> 0:19:37.199 and Medicare would pay twenty thousand dollars for it, but 0:19:37.240 --> 0:19:40.280 their typical insurance company is giving them sixty thousand for it. Right, 0:19:40.800 --> 0:19:44.240 So they're saying, Okay, don't pay an insurance company, pay us. 0:19:44.280 --> 0:19:47.119 What we'll do is we will reprice that claim. We 0:19:47.200 --> 0:19:50.040 will pay the claim for you, and we'll negotiate with 0:19:50.080 --> 0:19:53.520 the provider if you get pushedback. And so we're reference 0:19:53.520 --> 0:19:56.640 based repricing these claims. We're just cutting out insurers all 0:19:56.680 --> 0:19:59.120 together because we're saying, no, the employer's going to self 0:19:59.119 --> 0:20:01.080 insure this plan and we're going to pay at one 0:20:01.119 --> 0:20:03.800 hundred and forty percent of Medicare instead of three hundred 0:20:03.840 --> 0:20:05.040 and ten percent of Medicare. 0:20:05.840 --> 0:20:09.600 So the hospital is not they're not making that same 0:20:09.680 --> 0:20:13.560 crazy profit, but they're making profit. You say, it's working 0:20:14.160 --> 0:20:16.879 to what extent our hospital's saying, okay, we'll do that 0:20:16.920 --> 0:20:17.520 for that price. 0:20:19.240 --> 0:20:21.919 Yeah, So depending on what part of the country you're in, 0:20:22.560 --> 0:20:26.040 you get, we would say is one percent to ten 0:20:26.080 --> 0:20:28.560 percent pushback. And when I say pushback, I mean the 0:20:28.560 --> 0:20:30.600 hospital says, hey, no, one hundred and forty percent of 0:20:30.600 --> 0:20:33.320 Medicare is not enough. We need more, we want more. 0:20:33.800 --> 0:20:37.040 Then we get involved in negotiation. Once we get involved 0:20:37.040 --> 0:20:40.359 in negotiation, it's ninety nine percent acceptance. And the worst 0:20:40.359 --> 0:20:43.640 case scenario for the employer is they capitulate and they 0:20:43.680 --> 0:20:46.000 pay what the giant insurance company would have paid. 0:20:46.000 --> 0:20:50.640 Anyway, you see, if it almost never happens. 0:20:50.080 --> 0:20:52.520 Well very rarely. Yeah, that you're talking about a handful 0:20:52.560 --> 0:20:58.280 of claims per year for hundreds of employees. Yeah, because ultimately, 0:20:58.320 --> 0:21:00.639