00:00:00
Speaker 1: Welcome to How to Money. I'm Joel, and today I'm discussing why healthcare costs so much and what you can do about it with my pal, Doc G. Okay, does anyone look at the US healthcare system and think, yep, everything's working great? Probably not. And it's not because we don't have talented doctors or dedicated healthcare workers. It's because a growing web of corporate interests, distorted incentives, and financial middlemen has turned healthcare into one of the most expensive and frustrating systems in the developed world. And in his new book, The Healthcare Heist, Jordan Grumet, he's an MD who's also a personal finance podcaster. He's a writer. He's a speaker. He exposes how that happened. Medical bills, they remain a major source of debt and bankruptcy for American families. But Jordan argues that this isn't inevitable. And more importantly, he lays out some practical solutions to help individuals, which we will get into today in this episode. So Jordan, thank you for joining me. It's great to have you here.

00:01:04
Speaker 2: Thank you so much for having me. I'm excited for the conversation.

00:01:07
Speaker 1: All right. So first question I ask everybody, you've been on the show before. You know this. What is your craft beer equivalent? What are you, especially now as an empty nester, as of very recently, what are you spending money on? And has that changed? extravagantly? What are you spending big buckoos of money on right now?

00:01:27
Speaker 2: So believe it or not, because I am quote unquote semi-retired, I do a podcast, I write books, but I don't really practice medicine as much. I do a little bit of hospice work. I've started getting in shape, which means I'm working out. And I found the biggest thing keeping me from working out was going to the gym. Cause like I get all my energy around five in the morning and I don't want to get in the car and drive to the gym at five in the morning. So we've been spending extravagantly on workout stuff.

00:01:55
Speaker 1: Okay.

00:01:55
Speaker 2: So I've got a new bench. We bought like dumbbells up to 50 pounds. We bought all sorts of workout equipment and I've been working out at home and it's actually really been nice.

00:02:06
Speaker 1: You and Matt could geek out about this because he, he did the same. He spent a lot of money and he really thought about it as, well, if I stopped paying for CrossFit, which is obviously very expensive and I have my own gym and I can do it whenever I want. And guess what? My wife can work out here too. And the kids work out occasionally with him. And so he has, I think easily, easily gotten the money back that he spent. And he, he went for like the nicest equipment possible. He didn't go bare bones. And man, it brings him a lot of joy too. So He doesn't have a garage to park in anymore, but it's been worth the trade-off.

00:02:39
Speaker 2: And you know what the hack is? People buy nice workout equipment all the time, don't use it, and then sell it. So believe it or not, like the Facebook marketplaces, you can get some like fantastic gym equipment and usually at a steep discount. Yeah.

00:02:53
Speaker 1: Yeah. 60 plus percent off, I'm sure. Okay. Let's get into the topic of your latest book. You have become a prolific author, sir. But this one, it's simultaneously... fascinating, but also horrific, hard to read in some ways, because it is, like I said in the beginning, it's kind of a tough system to navigate as an individual. So I guess I wanted to start off maybe by turning the tables and say, who would you say the U.S. healthcare system is working well for, Jordan?

00:03:25
Speaker 2: Well, it is working really well for corporate America. And so if you look, there are corporations... and private companies that are doing exceedingly well. I'm talking about the health insurance industry. I'm talking about the pharmaceutical companies. I'm talking about the electronic medical records companies. I'm talking about private equity and venture capital in general. And I'm also talking about the medical malpractice industry. When you look, you see all of these companies are more profitable than ever because the cost of our healthcare is spiraling, but it's not because healthcare itself is that expensive to deliver. It's that we have these third parties that are literally putting their hands in the cookie jar, grabbing all the money, and stealing it from doctors and patients alike.

00:04:18
Speaker 1: Okay. So doctors are losing out, patients are losing out. I want to talk more about doctors in just a second. What about the average full-time worker who has... healthcare benefits through their employer, are they feeling the pain of this system? I think new numbers just came out that are pretty not dissimilar from recent years where the average cost to the employer is going up close to double digits for the healthcare plans they provide for their employees.

00:04:47
Speaker 2: Healthcare premiums have been increasing every year since 2000. And so what we're finding is, yeah, if you're lucky enough to have a job that pays for your health insurance, you are above some people. But then a lot of these corporations are covering less and less. They're asking for more and more payment from their employees. Copays are going up. Deductibles are going up. Uncovered meds are going up, right? So there's less and less that's being covered. Denials are going up. So health insurers are denying payment on certain things, which means you're paying out of pocket. When it all comes around, everybody is paying more. And even if you are lucky enough to have insurance, guess what? Medicare and Medicaid costs are going up because of all these third parties. And eventually that comes back to you, the taxpayer. And so whether you believe it or not, you are paying more than ever.

00:05:45
Speaker 1: So- The problem is complex. You're talking about these third-party companies who have kind of put their hands in the cookie jar, as you said it. Can you give me a rundown of how, why, and when it got so bad? Because now we're seeing people, you mentioned, being turned down for a claim. They're turning to GoFundMe. Or we see more and more people in this country avoiding treatment because it's so expensive. I don't even know the number of prescriptions that don't get picked up because of how much they cost. But I do know that you see some people show up at the counter at their local grocery store and they realize maybe not knowing that whether that good RX exists or it's still being too expensive even with that and saying, I can't afford that. I guess I'm gonna have to forego it.

00:06:29
Speaker 2: I begin the book with the story of Mary Lou Retton. Everybody knows Mary Lou Retton. She was on the Wheaties box, remember? An Olympian, an American hero. Well, a number of years ago, she got pneumonia. She went to the hospital. Everything was going fine. They sent her home. Three days later, her daughter walks into her house and she is in extremis, meaning barely breathing and almost dead. They take her back to the hospital. She ends up staying for months in the intensive care unit. eventually gets out, and guess what? She has a $ 500, 000 healthcare bill, and Mary Lou Retton didn't have insurance. Mary Lou Retton, whose net worth at the time was somewhere around $ 2 million. Well, why did Mary Lou Retton not have insurance? Well, first of all, being an Olympian, she had tons of fractures and ended up getting tons and tons of surgery. So first and foremost, it was just incredibly hard to insure her. Then she got divorced and lost her insurance, then was having trouble finding new insurance, and she never ended up getting it. And so what happened? Her daughters had to do a GoFundMe. We had to GoFundMe an American hero worth $ 2 million because she couldn't get health care in the United States. It was untenable. What are we saying about our system when that happens? What we're saying— Go ahead.

00:07:49
Speaker 1: Wouldn't some people say, well, Obamacare? You can't deny someone because of preexisting conditions. Why didn't she get a policy on healthcare.gov?

00:07:59
Speaker 2: I suspect, and I'm not looking at the years right now, that this was probably before Obamacare.

00:08:04
Speaker 1: Okay, good point.

00:08:06
Speaker 2: But based on the fact that even Obamacare wasn't carried out evenly and distributed through all of the states, your cost could be radically different. Yeah. And someone like her wasn't going to be getting any subsidies. And so imagine my wife and I, my wife stopped working... you know, a year and a half ago, we've been using COBRA. When we come off COBRA, we can get, you know, healthcare through healthcare.gov, but it's going to be $ 36, 000 a year for a family of four. But remember, those are high deductible plans. Often you have copays, you have uncovered care. There are so many ways that we get charged for healthcare and the premiums are raising every year. And so again, It is likely my family will pay something around $ 50, 000 this year for health care.

00:08:56
Speaker 1: That's OK, which is insane. It's crazy to think about. But what is the alternative? And you are at least high net worth. You're choosing to retire before most people do. So you can afford, I would imagine, this blow. But most people cannot. And most people cannot afford even the cost of the insurance, much less the cost of health care after the fact. when they look at the price tag on healthcare.gov. And I understand the subsidy, many of the subsidies have gone away, especially for middle income earners. What's someone supposed to do?

00:09:30
Speaker 2: So in this case, people either spend all their resources for insurance or they go uncovered, which means they're one accident or one illness away from bankruptcy. And that's why one of the major causes of bankruptcy in the United States is healthcare expenses. It's also one of the main reasons your and my listeners are afraid to retire before the age of 65, because they're afraid of who's going to cover long term care. This is a real problem. And so you could say, well, what are we supposed to do? In the United States, it's 13,000, which would be wonderful if we got doubly as good health care. But most of the studies show that actually health care in the United States is about the same as it is in other developed countries. And so, yes, you might get a little bit faster care. You might go to a slightly nicer hospital. But otherwise, we're paying double what everyone else is and they pay it in their taxes and that's it. we get clabbered with premiums and co-pays.

00:10:38
Speaker 1: One of the things you said in your book was that we are being used as leverage so that companies can make big profits. How exactly is that happening? How has the healthcare system become, how has this heist essentially happened where our dollars are being paid, our costs are going up so that these companies can rake in big money?

00:11:02
Speaker 2: Well, you have to start thinking about how our health care system came to be. So if you go back to colonial days before there even was an America, health care was provided for the people by the people.

00:11:13
Speaker 1: Right.

00:11:13
Speaker 2: So basically, if you lived in colonial Virginia and your wife got pregnant, all the people and the women in the neighborhood would come over and they would just deliver the baby. Now, over time, this changed, especially with wars, right? Civil War, World War I, World War II. We realized that we need medicines. We need wound care. We need field hospitals. And so you start having a formal system of health care in the United States. But again, that was pretty much for the people, by the people. The government was providing it. These were not for-profit entities. After about World War II, we really see the rise of for-profit entities. The pharmaceutical companies to provide pain medicine, anesthesia, et cetera, for wars and hospitals, those kind of things. Insurance companies, because during World War II, there were actually limits on what corporations could pay its employees. So they started buying health insurance as an added benefit. And so really we start seeing at the turn of the 20th century, we go from something that is a public good to something that is being practiced by for-profit entities to make money, which sounds okay. I mean, we are a capitalist country, so this makes sense. The problem comes when you start thinking about the duty that doctors, and I'm going to use the term doctors throughout this conversation, but I'm not just talking about doctors. I'm talking about all caregivers. So we're talking about nurses, physical therapists, occupational therapists, chaplains, social workers, anyone who's involved in the care of people, whether healthy or ill. I'm just going to say doctors because it's easier. When we think about the responsibilities doctors have towards patients, doctors take the Hippocratic Oath, which basically says that they will protect and care for each and every patient. There's also the medical standard of care. It's what we look at when we talk about malpractice. There's a standard of care, what a reasonable doctor would do in the same situation. So doctors and healthcare people, we are bound by these oaths and these standards. But when you start looking at companies, companies are not bound by these oaths or standards. But the problem is these companies, by using aggressive pricing, by corporatizing the way medicine is practiced, they're actually practicing medicine. When a corporation tells me as a doctor, you can or can't order this test, they're practicing medicine. But these companies, they don't take the Hippocratic Oath and they don't have a standard of care. What they have is a fiduciary responsibility to to their shareholders and stockholders and investors. And so we have companies that are acting on their fiduciary responsibility to build profits.

00:13:48
Speaker 1: And those are two competing responsibilities.

00:13:51
Speaker 2: And so they make decisions that aren't always in the best interest of the individual patients. And that's how we've developed a system that ultimately pays the corporations, but doesn't lead to better care.

00:14:04
Speaker 1: Where do doctors fit into this? Because it seems like one of those those areas where doctors might feel torn, tug of war a little bit, they're in the center of it, but they probably also get more of the blame than they deserve, I would think, from patients who feel put out by how expensive it is to go see their doctor.

00:14:23
Speaker 2: What people don't realize is the doctors are just as much pawns to the system as the patients are. And so a lot of times patients, when they see the cost of care going up, when they see that they can't get into their doctor, when they see the electronic medical record standing in the way between them and a doctor who's actually paying attention to them, they feel that doctors are at fault. What they don't realize is that doctors are falling prey to all the same problems. So there has been a divide and conquer strategy by these third parties. Basically, the idea is if we can get doctors and patients mad enough at each other, they will never rise up together to cause change. And so there have been a number of streams of thought and a number of things that have happened that have really pushed doctors and patients away from each other. And usually the center of that has either been legislation, which has been backed by third parties and lobbying, or has been the third parties themselves that have pushed these streams and movements, which have pushed doctors and patients away from each other. Yeah.

00:15:28
Speaker 1: One of the things you talk about in the book, too, is something you call the intimacy gap. How is that part of the problem and how do we close that gap?

00:15:36
Speaker 2: So when we think about it, these third parties are hoping that doctors and patients never come together.

00:15:41
Speaker 1: Why?

00:15:42
Speaker 2: Because if doctors and patients came together. They would be the main stakeholders in the system. And when main stakeholders come together, they can actually cause revolutionary change. That's how we change the system when there are entrenched interests. Congress has often been in gridlock. And when Congress becomes entrenched because of lobbying money, a lot of times you need all the stakeholders to come together and say, no, we won't accept this. And that's only how you get change. And so these third parties really do not want doctors and patients to come together to fight for change. So why is it easy to divide doctors and patients? Well, you need to go back to the early 1900s. Now, if you were a doctor in the 1900s, you lived in the same community as your patients. You probably went to the same church. Your kids went to the same schools. You most likely visited your patients in their homes when they couldn't come to the office. And a lot of times, it was a transaction between you and them. There were no insurers. There was no government. So you charged them what you charged them for the care. And if they couldn't pay for it, they gave you a chicken or whatever they did, you exchanged services. There was natural intimacy. And therefore, when the doctor walked in to the patient's examining room, they could be objective and cold because you already were intimate with them because you lived in the same area and it was a much closer relationship. So even when you had to be objective, there was still intimacy between doctor and patient. Fast forward to today. Patients usually live many, many miles away from their doctor's office. You have to drive there. Your doctor doesn't live in your community. You don't run into them on the street. The doctor doesn't visit you in your home. And then there are these third parties which get in between you and the doctor when it comes to payment and pharmaceuticals and all sorts of things.

00:17:23
Speaker 1: Is that part of the reason, too, by the way, that our visits, our time that we have with the doctor when we do see them is so short?

00:17:30
Speaker 2: I mean, there's plenty of reasons. One is a lot of the doctor's offices have been bought out by private equity and venture capital, and they're trying to cram as many patients in as possible to increase their incomes. The other is doctors are now busy with their electronic medical records and it's adding in two to three times the amount of work they have to do in every very short visit. And so the patients, as we were saying, patients come in and they disclose everything. They tell the deepest stories. They bare their souls and then they bare their bodies when they take their clothes off to be examined. But doctors no longer actually share intimacy with patients. So it is unilateral intimacy. And so one of the problems why doctors and patients don't come together to fight for change is because all that intimacy that used to be there all those years ago is now gone. And so it's very easy to look at each other as being on opposite sides of the battlefield as opposed to feeling like allies.

00:18:24
Speaker 1: Probably both sides would benefit from that. change and battling the vested interests who are driving up these costs where doctors wouldn't feel the pain as much and the patients wouldn't either. I've got more I want to get to with you, Jordan. I want to talk about solutions, but I also kind of want to talk about what the U.S. does well in terms of medical care. We'll get to some stuff on that right after this. All right, we're back. Still talking with Jordan Grumet. We're talking about what's going on with the U.S. healthcare system. I'm pretty sure we can solve it in the next 30 minutes, Jordan. It shouldn't be that difficult, right?

00:19:05
Speaker 2: Totally.

00:19:06
Speaker 1: No, that is the problem is it feels like this ball of yarn, right, that's been crusted over and you pull one thing and you see something else fall out of it. And so there isn't a simple solution to this. And we will get to some ways that individuals can battle back, even with the system being the ball of yarn that it is. But I wanted to just quickly talk about the positive side of what U.S. healthcare has created. And when I think of what's good about U.S. healthcare, I think of medical innovation, right? And has the profit incentive driven innovation in treatment that we wouldn't have otherwise?

00:19:47
Speaker 2: Well, first and foremost, the U.S. is actually well known for high quality care. In fact, we see foreign dignitaries come to the U.S. all the time for top ranked care. So I will tell you there's a few things the U.S. is really good at. We are actually good at the most expensive care. So if you are wealthy... This can be a wonderful place to be. We are also fast. Like in other countries, when you need to get a hip replacement, you might wait three or four or five months. In the U.S., you can get it lickety split. But when it comes down to actual outcomes, we're really very similar to most other countries. And so what you're getting is a very high cost system that For a few niceties, but mostly you're not getting a huge amount of bang for your buck. So the U.S. does do a lot of things well. I don't want to say our medical system is bad. The bigger question comes from, well, will that kill medical innovation? Well, guess what? Where have we had some of the most innovative things happen more recently? Ozempic didn't happen in the U.S. It was developed outside of the U.S. There are plenty of medical innovations now coming from all around the world. And let me tell you, those countries, a lot of them have universal health care. And so it's not that we have to go from 100 percent capitalism to 100 percent socialism or 100 percent capitalism to 100 percent universal health care. I think there's a middle ground. Like we can incentivize companies to still innovate, but we do have to be really protective of how much profits there actually are and how those profits are gleaned. And so I don't think we have to be all or nothing. I do like universal health care. I think actually in most countries it works very well, but I don't think we have to go that far to help the system be better.

00:21:37
Speaker 1: Well, it does seem like in terms of innovation that in particular with cancer treatments, we've seen some really significant progress in recent years. And I'm thinking about former Senator Ben Sasse and how much you got something to say.

00:21:51
Speaker 2: Yeah. But what's the cost? A lot of times a single cancer treatment is $ 5, 000 to $ 10, 000. And some of those cancer treatments have to be repeated every week for a full year. And so, for instance, common sense legislation like capping the costs on new drugs, very, very reasonable. And the pharmaceutical companies will tell you, wait, wait, wait, wait. R & D, research and development. The reason why we get to charge $ 5, 000 or $ 10, 000 for each dose of chemotherapy is because we spend so much on R & D, which is 100% a myth. Actually, studies show that most drug companies spend about $ 1. 8 billion of R & D for each drug, but that they make roughly $ 18 billion. What pharmaceutical companies actually spend on is marketing. A lot of times they don't spend on R & D as much. I've seen the ads. Nowadays, believe it or not, most of the big pharmaceutical companies don't even develop their own drugs anymore. It's smaller pharmaceutical companies that develop the drugs, spend a lot less on R & D, and then the big companies just buy them off of them and market them and take them through the whole FDA process. And so it's really a myth.

00:22:59
Speaker 1: My mom is currently on a trial medication for the cancer that she has. And it's been incredibly effective, like incredibly effective. And so when I'm talking about the innovation on the medical front and how it saves lives and helps families, it's changed our families' lives. But once that becomes a real drug that you have to pay for, it does frighten me.

00:23:22
Speaker 2: And guess what? Who do you think pays for all that research? You're going to say the pharmaceutical company pays for the research. Since 1930, the NIH has spent $ 900 billion on research that was completely government and publicly funded. And guess what? They did a study in 2016 and they looked at every drug that came to market from 2010 to 2016. Every single drug that came to market had research that started by being NIH funded. Basically, we are already paying for all this. The public is already paying for it. Think about it. Where does most of our research comes from? It comes from the NIH and it comes from our university system. And most of that up to recently was completely publicly funded.

00:24:09
Speaker 1: And then the pharmaceutical companies piggyback off of it and they make a.

00:24:13
Speaker 2: Correct. And not only that, but then they also get tons and tons of tax breaks. And so if you look at I think it was 2022. The top seven pharmaceutical giants amassed $ 110 billion in profits. How much money in taxes do you think they paid? $ 2 billion. $ 110 billion of profits, $ 2 billion in taxes. They get all sorts of R & D credits and all sorts of things. We are paying for the research up front, and then we're paying for it in pharmaceutical costs, and then we're paying for it when the government doesn't even charge nearly as much taxes as you and I get charged on our family income.

00:24:50
Speaker 1: I feel like if we wanted to do a four-hour podcast on the problems with the medical system, we could. We could. And maybe we will someday. But I do want to get into solutions because actually the subtitle of your book is How Physicians and Patients Can Unite to Transform Healthcare. And so you're talking about coming together as patients and physicians. But let's get into some solutions. How do we– and I want to get into– What does it look like from an overall big picture perspective? And then just from a small time perspective, hey, I'm just an average Joe in this system. How do I get by without getting fleeced? But start with the big picture.

00:25:30
Speaker 2: Believe it or not, and I'm going to actually do the other because I think it's much easier to talk about what each person could do as an individual. And then I want to transition to the big picture. So believe it or not, each individual can do tons of things. You don't even realize it. But many of your decisions actually add to the bottom line of these third parties. So first and foremost, if you have an insurance company deny a claim, appeal. Believe it or not, just by appealing, lots of these claims are overturned. So first thing, first and foremost, you can appeal. Second of all, you go to your doctor and they're like, I'm going to put you on this blood pressure medicine. You have run of the mill blood pressure. Ask for a generic. There's no reason you need the newest and greatest for most disease processes. And generics go directly to the generic companies which provide cheaper drugs. How about trying to figure out, does your doctor, are they owned by private equity and venture capital or are they a private practice and self-owned? If possible, going to self-owned practices takes money right out of these third parties. Here's another big one. Don't file a medical malpractice case. Most people don't realize. Can you guess what percentage of medical malpractice cases that are filed are dropped before they reach trial? 45%. 70%.

00:26:47
Speaker 1: Wow.

00:26:51
Speaker 2: 70% of cases are dropped without a finding against a physician. They're either thrown out. or they're abandoned or they're just dropped. And guess what? If you do go to trial, guess how often doctors are found guilty of medical malpractice? Two out of 10 times. So eight out of 10 times, there is no malpractice. So I'm telling you, you may be pissed off about what happened to you and you may feel wronged and it's worth talking to the doctor and finding out more. But most of the time, less than 10% of the time, is there actually medical malpractice? Most of the time, there is none, and medical malpractice is exceedingly costly to our system because once people get sued, they tend to practice what's called defensive medicine and order many, many more tests. So on an individual level, those are some really easy things.

00:27:39
Speaker 1: You can do. It seems like you talked about private equity rolling up private practices, and this seems to be happening everywhere. Yeah. Think about like the veterinary industry. This has been happening on steroids. And the people who owned those private practices, those people get this golden parachute out of the small business they owned. But then prices get ratcheted up across the board for everybody else. There's less competition in the space. And this is happening not just for what we pay to keep our pets healthy, but what we pay to keep ourselves healthy.

00:28:13
Speaker 2: In medicine, it's even worse because a lot of times private equity and venture capital act as corporate raiders. So what do I mean by that? So they buy a big medical system. They sell all the real estate. So the hospital sits on real estate. Nursing homes sit on real estate. Clinics sit on real estate. So they sell all the real estate, all the buildings, and then they rent them back. The reason why they do this is they get a huge windfall of cash that way to pay back their investors. Right. So the minute venture capital private equity buy something, the first thing they want to do is recapture all their investors money. Then they sell all the equipment and rent it back. Then they pretty much drive profits as hard as they can for the first bunch of months. And they literally bankrupt the system and then walk away and wash their hands from it. This has happened over and over again in the United States. It's a very common playbook. And these corporations don't care because by the time the medical system is bankrupted, they've already 10x their money and they're gone.

00:29:11
Speaker 1: All right. That's depressing. Talk to me about this. You mentioned at the beginning of this episode. That you're getting fit. You're putting more of a focus, time, effort, money into your own personal health and well-being. And I feel like this is something that kind of, at least for a couple decades, got lost in this country as a point of conversation between doctors and patients. And it felt like there was always a gap. drug or a treatment, but rarely was it, what are you eating? Are you actually getting out there for a nightly walk post-dinner or ever? Or not smoking, smoking cessation. There are all of these things that were just stones left unturned that really did impact the health of the patient's What are your thoughts on that? How come that's not more of a point of discussion? Because you would think that's the preventative medicine that really reduces costs too.

00:30:07
Speaker 2: So unfortunately, that is also depressing. So first and foremost, that's true. But that doesn't change the fact that you shouldn't go into bankruptcy because of health care problems in such a developed country. And you shouldn't be able to not retire because you don't know how to pay for health insurance. So no matter what we say about lifestyle and a person's responsibility, great, fine. But here's the funny thing. pharmaceutical companies and medical researchers have hijacked the pre-disease state phenomenon. So now pharmaceutical companies are doing something called disease mongering. What is disease mongering? What it is, is it's defining diseases at earlier and earlier and earlier stages so that they can then suggest their pharmaceuticals to treat the pre-disease state. So we never had pre-diabetes until recently, but now there's pre-diabetes, there's a test to get when you're pre-diabetic, and now there's a whole regimen of medicines to be on Same with cholesterol. Like you didn't used to get treated for cholesterol until you had a heart attack or stroke. And now they're drawing the numbers lower and lower. So you need that cholesterol pill sooner and sooner, et cetera. So I get it.

00:31:11
Speaker 1: In some ways, you would think that could be a good thing, right? Preventing something worse from happening earlier in your life, kicking the can down the road for worse physical circumstances.

00:31:22
Speaker 2: Yeah. Well, there's a fine line between doing an intervention that helps versus doing an intervention that just costs money and doesn't help and possibly could harm someone. So remember, things as simple as someone gets on a cholesterol medicine, a small percentage of people die every year from getting serious side effects from it. Same with aspirin, same with Tylenol, same with everything. So you always want to be very careful when you start a new treatment with someone. But don't get me wrong. I do think there is personal responsibility and should be. And certainly part of the discussion in primary care should be exercise and diet and all those things. I don't think any of this argues against that. All it says is we are way too developed of a country to have the problems we're having and we're just spending way too much on health care. That is not a you not being a good patient problem. In fact, pharmaceutical companies want you to think that. It is that these third parties are leveraging our system and making huge profits. You just don't see this anywhere else in the world. These third party corporations taking so much out of the system.

00:32:23
Speaker 1: So one of my really, really good friends had a heart issue and it was an incredibly expensive surgery to get here in the United States. And so he did his research and he found actually there's an experimental treatment for this, a surgery that's even, it's less intervention and the recovery's quicker, but it's being done in London. And when he looked at the numbers, I forget exactly how much he saved, but I want to say it was six figures. It was like $ 180, 000 surgery here and it was a $ 60, 000 surgery over there. And so even when you think about the cost of plane tickets and recovery time over there, it was much cheaper to fly across the pond. So that makes me just think that medical tourism, when you talk about how we're getting just as good care in many cases in a lot of other countries, we're seeing a rise in that. We're seeing a lot of countries kind of get into this and saying, come on down here, have a vacation in Costa Rica, and you'll get your procedure done for a quarter of the price and you can you know, tack on some extra days at the beach. Is medical tourism a wise choice for people to save real money when it comes to bigger health concerns?

00:33:33
Speaker 2: I don't think there's anything wrong with it. I mean, if you need dental care, go to Mexico, right? If you need certain cosmetic procedures, there's so many better places to get them. But even life-saving surgeries, believe it or not, a lot of the people who practice surgical medicine in other countries trained in the U.S. at some of our best centers and then leave and go practice in their country. you are getting the same care at much less of a cost. But it is embarrassing, embarrassing as such a technologically sophisticated society as the United States is, that our people have to get on a plane, spend all this money on travel to go get necessary medical care that they're willing to pay out of pocket instead of the insurance that they actually have. And yet we as a country are paying way more than any of these other countries on health care, and we're still not getting it.

00:34:24
Speaker 1: And it's particularly difficult for people who are cash payers, right? There is a whole lot where it's really hard to find upfront how much you're going to pay for a certain surgery. Let's say it's a surgery that I was telling you before we started. My kids, we get strep all the time. It looks like tonsils are coming out soon, right? And when you try to dig in and see where should I go, where can I get the best price? It's almost impossible. There is, we're fortunate. where we live, there is a place that has upfront pricing published on their website. But that's rare. That doesn't exist in very many places, a la the Surgical Center of Oklahoma, which I feel like kind of led the charge in upfront surgical pricing. So we're lucky. We might be able to go and get reasonably priced tonsillectomies for my kids. But for most people, I mean, the amount of research it takes to be able to find a solid price for the right surgery you need, it feels almost impossible.

00:35:21
Speaker 2: And remember, doctors are under all sorts of scrutiny about who they charge what. So let's say you're a kind-hearted doctor and a patient comes in and you want to charge them half price. You've signed contracts with insurance companies and the government that says that the standard amount is this much and you're breaking those contracts. And so... there are all sorts of concerns that make zero sense.

00:35:45
Speaker 1: Yeah. Well, that makes, so we're on a health sharing plan and I understand why those get bad raps, but like you talked about $ 36, 000 for just the cost of premiums for your healthcare plan, we'd be in a similar, in a similar boat. And so a lot of people with, it's unaffordable, it's unaffordable. And that's why health sharing plans have seen, I think, a dramatic rise. In in people like signing up for them. But yeah, what is your take on those, especially for self-employed individuals that we're trying to navigate the system and pay less, but it doesn't there's no silver bullet. So we're all just kind of like trying to do the best we can. It feels like.

00:36:26
Speaker 2: So I feel like health sharing ministries. work fine for many people, you have to ask yourself a real basic question. And the basic question is, how do I feel about the fact that this industry is not regulated like other health insurers in the country? And so the government does not regulate health-sharing ministries in the same way they do health insurers. So the idea is there is an added level of protection. Now, I'll tell you, a lot of people feel fleeced by traditional insurers with all those layers of protection. And a lot of people I know have health-sharing ministries and have had plenty of things paid for without argument. And so... Do I think it's a reasonable thing to do? Certainly. The question is, will you not sleep at night knowing that there's certainly less regulation? And so you're a little bit more at the whim of how up and up this company is and how well they've performed with their patients in the past, which is something you can also research. So there are some fleetingly few but possible ways around our current health expense problem. One is if you qualify for subsidies, if you have very low income. Another is health sharing ministries. Another is there's something called Farm Bureau insurance. In some cities, in some states, there's a Farm Bureau and you can join it and their insurance is a lot cheaper. That is not common, but it is out there. There's some people who do expat insurance where they're living outside the United States, which comes with a whole other set of problems. But sometimes you can get cheaper insurance there. There are some other things you could consider. But in general, health insurance is very expensive in the United States. Yeah. Yeah.

00:37:58
Speaker 1: Okay. Expat insurance. Talk to me about that just for a second, because I wanted to get to people who want to retire early and healthcare is a big burden. And let's say they're not at the FATFI net worth, but they're trying to figure out. So this becomes even more visceral of a decision when you got to figure out how much can I afford to pay on an annual basis for health insurance? I want to bag work, but I And I don't want to stick around just for the health insurance, but sometimes it feels like that's that's the tradeoff.

00:38:29
Speaker 2: Right.

00:38:30
Speaker 1: So is it doesn't make sense to move somewhere else to lower the cost of living and the cost of health care?

00:38:38
Speaker 2: So I'm not an expert in expat insurance, but some people certainly find it reasonable to travel six to eight months a year in order to do that. There are rules about how long you're outside of the United States. If you fulfill the criteria, you can often get like a really good Blue Cross Blue Shield policy for $ 400 or $ 500 a month, something very reasonable. But you have to make sure you meet the criteria. There are different rules about how you get care, where you get care. You've got to just look and make sure that it all fits. Yeah, they're one of the things that I often, because I do a lot of coaching and I do a lot of financial coaching. And one thing I've really had to remind people is that they have to build the cost of insurance into their FIRE number. And so, especially if you are closer to the kind of upper tier of fire or fat fire where you're going to be liquidating equities and you're going to have a high adjustable gross income. you are not going to be getting these subsidies, which means that you have to remember that your yearly spending includes possibly a large amount of money for health care. And so what can people do? They can do the health sharing ministries. They can maybe get subsidies. They can look for Farm Bureau insurance. They can get a part-time job like a Starbucks or Trader Joe's that offers insurance and work 20 hours a week or something like that. I would never suggest going uncovered. I think that's really dangerous. Or you can suck it up and just spend, like me, $ 36, 000 to $ 50, 000 a year and know that that's what it's going to cost.

00:40:05
Speaker 1: Yeah. There are solutions, just none of them sound awesome, and they're all going to cost you money. So I got a few more questions I want to get to with you, Jordan, specifically some great stuff you've been writing on your Substack lately that's made me pause and think. So get to that. All right, back with my buddy, Jordan, still talking about kind of what's going on in healthcare. And I appreciate you kind of digging in. And really, that's what it that it sucks that you have to build in that much extra buffer for your retirement, but you're just short sighted if if you don't, right, you have to take that into account. And I guess when you do talk to people who want to retire early or people who are retired, I got to imagine that is the number one cause for concern, both just financially and as a person. Like, what's going to go on with my health and how much am I going to pay for it?

00:41:00
Speaker 2: Healthcare insurance and then long-term care. Two different sides of the same problem. Both our healthcare system is not addressing. And so you have to kind of be thoughtful about how that's going to fit into your retirement numbers. Yeah.

00:41:12
Speaker 1: Are there any.

00:41:14
Speaker 1: Existing models of health care around the world that you see functioning well or that you see where we could adopt certain pieces that would kind of plug and play into the U.S. system that would make a big difference?

00:41:27
Speaker 2: Well, certainly universal health care systems in most other countries function pretty well. People pay a little bit extra taxes, but then they don't pay the premiums and the co-pays and they don't go bankrupt. So universal Medicare, universal health care in the United States could probably work and we would probably end up spending less as a people on health care than we do now. And so that can help. But you have to remember that there are also a lot of piecemeal things that we could do in this country that would really help. And we've started doing some of them. So if you remember during the Biden era and also during some of the Trump era, they've been talking about negotiating drug prices for Medicare and Medicaid. So the government in most countries, the government is the biggest buyer of pharmaceuticals and negotiates prices down. Part of, unfortunately, the legislation, which was very much backed by lobbyists back in the Bush two years, basically created Medicare Part D, which is the pharmaceutical piece. But they wrote into the legislation that the government was not allowed to negotiate with pharmaceutical companies. And so that was basically based on lobbying from these third parties that were pushing their congresspeople. And it got passed. And so although we're trying to reverse that, and again, we've started to, having our government negotiate drug prices, having caps on new drugs, like a new cancer drug shouldn't cost $ 10, 000 a dose. We could cap those things. There's all sorts of things we could do to change our litigation system when it comes to medical malpractice. For one, most people can file a malpractice suit without spending any money, right? So basically it's contingency based and the lawyer only collects if there is a finding. So lots of countries don't allow contingency. So the patients and the families have money and skin in the game if they're really going to go ahead and get involved in a suit. The other thing is in a lot of countries, they don't have a jury deciding medical malpractice. They actually have a group of educated doctors or healthcare people who are experts. And that's all they do for a living is they sit on these trials and decide medical malpractice. And so there's lots of little things we could do There's lots of countries that have at least catastrophic health insurance for everybody. It's low cost and it just covers the catastrophes. And then people buy their own separate health care coverage for everything else. So there are lots of things that could be done. One simple thing we could do is just drop electronic medical records. Electronic medical records cost our system a huge amount. And after all these years and all the billions we've spent on them, it actually hasn't improved health care at all.

00:44:09
Speaker 1: Do you have any idea of how much it costs our country in terms of lack of access to entrepreneurial endeavors? People who want to start a business but feel like they can't because of the high cost of health care. How many people want to start a business and go off on their own and create more dynamic opportunities for themselves, for other people in this economy, but they're just unable to because health care is such an albatross around their neck?

00:44:35
Speaker 2: So I don't have the numbers, but philosophically, we could imagine that a country in which a huge significant portion of people don't feel like one of their basic needs are being met is going to handicap everything. It's going to handicap innovation. It's going to handicap happiness. It's going to handicap health. It's going to hurt everything. And so I don't even know if that's calculable. Like how many things aren't happening because we worry about our health care system? How many people are being bankrupted by paying for health care? How many people are too afraid to retire? I mean, all of these things affect our quality of life as citizens of these United States. I think it's incalculable.

00:45:16
Speaker 1: So I think I'm going to need to go see my therapist after this conversation. Something you said recently on your sub stack was you said that getting good with money often requires therapy. And I found that interesting. What makes you say that? And do you feel like you had some sort of breakthrough with your money because of a therapist in your life?

00:45:39
Speaker 2: I think money is highly emotional. And so if you look at, and it happens at both spectrums, right? Look at the people who can't seem to amass enough money and spend way too much and are in that poverty cycle. A huge portion of that is not having good money habits. And you and I both know developing good money habits is fairly straightforward, not easy, but fairly straightforward. It's something that most semi-educated people should be able to learn. And yet there are all these barriers. And a lot of those barriers start in our brain. There are systemic barriers. Don't get me wrong. There are systemic barriers in the United States that cause poverty. But on top of that, there are individually oriented barriers and a lot of them in our head. That's on one side. And then we have the whole other side of wealthy people who have all these emotional barriers about having enough money and spending for their own happiness and trouble being overly frugal. So we get it on both sides. Our brains tend to tell us stories that help us survive, but not necessarily thrive. And this goes back to the lizard brain of way back when, when we were wandering the Savannah and, we needed to make sure we were safe to such an extent that we became so hyper-focused that the wind blew and a reed moved and we assumed it was a snake and jumped. Nine times out of 10, it wasn't a snake, it was just a reed, but it helped us to survive, to jump all 10 times because the one time it was a snake, it would save your life. Same thing is happening today, but the risks are just not as severe, right? We're not walking the savannah anymore. Life is a lot safer, but that lizard or limbic system in our brain is still making snap decisions. And often those snap decisions don't lead to long-time happiness. They lead to bear survival. And bear survival was good enough back in the day. Now we actually want to thrive. We've got all this wealth. We've got all this technology. We're safer than we've ever been. We don't need that limbic system to be so developed. but our brains often won't allow us to thrive. It's just too busy worrying about survival, even now when survival is not as much at risk.

00:47:44
Speaker 1: We've had some great financial therapists on the show, and I think you're right. I think so many of our hangups, whether it's our inability to spend or our inability to save, that lead to a lack of balance in our lives often come down to stuff from childhood that we haven't processed very well, or we have these just knee-jerk reactions that we haven't really taken the time to uncover. And often it does take the help of someone else to really do the digging to gain some of that insight in order to have a healthier relationship with our money. One other thing you wrote recently that struck me that I really appreciated, and I hadn't really thought about it like this, but I was like trying to find the words. And I feel like it's so great when someone put the words to something you've been trying to figure out in your head. And you wrote about what you called financial indifference, which is the way you think about financial freedom Indifference doesn't sound like a good thing, right? If I'm indifferent to you, then you're like, what's going on, man? I thought we were friends. But why is financial indifference a good goal to have?

00:48:43
Speaker 2: The thing we fail to often think about is that money is just a tool and it's a tool to do the things and be the people we want to be. And so when we spend lots of money worrying about the tool, we kind of lose track of what the tool is for, which is to live these great, purposeful, connected lives. And so before I had enough money, all I worried about was making money. And that actually became a hindrance to being calm and enjoying the moment and doing all those things because I was so worried about getting money. Then the minute I had enough money and I'm like, I'm financially independent, I was panicking. that I was going to lose it all. Loss aversion, this idea that once you get it, oh my God, the stock market's going to drop or something catastrophic is going to happen. And then it's not going to be there anymore. And when I finally chilled out about that, I started thinking I have all this money. I better start spending it because spending it should cause me happiness and I really should die with zero. And then I started stressing about that and it didn't make me happier either. What I've really decided is we have to be indifferent about the money itself because it's just a tool. What we have to invest in is building more purposeful, connected lives, right? Connecting more with the people around us, doing the stuff that lights us up, having that impact, being that person we want to be, right? Really living out our identity, being intentional and pursuing those things that really are important to us. That's what I want you not to be indifferent about. But the money itself is just a tool. And you know what? If you can't use that tool, you'll use another one. Yeah.

00:50:15
Speaker 1: And by indifferent, you don't mean YOLO, like use it in ridiculous ways because you're indifferent to whether you have it or not. But in terms of how you're thinking about what the money, not being so freaked out about needing to get more or losing it. I love that too, because that's where I want to be in terms of how I approach my finances. I want to be wise, be smart, be prudent, and then also not think about money a whole lot. And if you are smart over the longterm with your finances, I think you can finally get to that point where you are kind of indifferent, where you don't think about that money a whole lot. And part of that is because you've curbed your wants You don't have like insatiable desires where you feel like you got to go out and spend a lot of money, but you also feel the freedom to be able to spend in the ways that you want to. Yeah.

00:51:06
Speaker 2: I mean, it comes back to what we began this episode with is your craft beer equivalent. Yeah. Like you want to live the life such that you have something, you just dig your craft beer equivalent that lights you up. That's exciting. That, that you want to be part of your life, and you want to have enough money so that you can enjoy that from time to time and not worry too much, right? You have enough money to spend on it. Maybe you can't have every craft beer equivalent you want, but you can have a good number of them, enough that life is exciting and interesting and you can dig it. Who cares? You're not really interested in how much it costs. What you're really interested in is enjoying that thing that's important to you, that connects you to other people, that's exciting.

00:51:46
Speaker 1: And hopefully you have enough to spend on staying healthy and on the healthcare when you're not healthy. Jordan Grumman, the new book, or your book is The Healthcare Heist. We'll link to it in the show notes. And yeah, I recommend it. It highlights a lot of the inefficiencies and problems with the system. And then like we talked about today, some of the ways you can fight back against it. So Jordan, thank you very much for joining me today.

00:52:10
Speaker 2: Thank you so much for having me.