The elephant in the operating theater
US Medical costs are out of control. But rather than dealing with that, voters will be faced with political policy decisions based on whether the govt should pay for it.
In this episode, I continue the "Unconstrained Bill of Rights" series to healthcare. Why those that don't have it, are seriously constrained and those that think they have coverage, may be right in line for the worst wake up call of their lives.
Click on the player above to listen to the episode or download it. You can subscribe to the RSS Feed here.
Health care is probably the biggest line item of cost you have in your burn rate.
You might think that only applies to someone over the age of 50, but that is not true. Consider the amount of money that the average employer in the United States has to pay for healthcare insurance for their workers. The average currently is about $19,500 per year. That is money that you are not seeing in your paycheck because it is considered part of an overall job “package” that they are enticing you with in order to have workers in their company.
If you leave your job, then the onus to obtain healthcare falls on your shoulders. So that’s when you see it up close and personal. Sure, there are cheaper providers – options for low deductibles, etc. but you are still looking at at least $10K per year for the average person. Add your deductible to that, and you are probably about where the employer is. Anyone who is living in the illusion that they can save up $1 million and do the FIRE thing, has to realize that if they got a 3% withdrawal rate on that money, the $30K per year of income would likely have half of that taken away by health insurance. Or they could simply elect to not carry it, or fall prey to some scam out there by some third party that *might* pay for their treatment if they fall on hard times. Maybe the folly of youth might protect them, simply because young people don’t get as sick as older people. But that never accounts for some idiot on the road that T-Bones you at an intersection.
If you combine money with healthcare, then the model that typically generates the greatest profits is to have a large premium for insurance paid for by some party – whether that be you, your employer, your government, etc. and then they attempt to distribute the funds of the insured pool to those that need healthcare.
This is a really bad idea, because what it does is to encourage the providers of healthcare to charge the maximum they can considering the size of the pool of money available. It isn’t the doctors or nurses doing this, however. It is the institutions that are built around the healthcare delivery system – the hospitals, hospital groups, administrators, lawyers, etc. that have created a way to charge the maximum and their goal would be to provide the minimum for the money. This is often juxt-opposed to the doctors and nurses on the front-line who went to medical school to provide service to humanity.
But you still have a right to obtain health care.
I’ve spent my life trying to find a solution to this. I grew up in Australia, where
healthcare was considered “free”. The government provided it. If you got into an accident and were admitted to a hospital, it was a public hospital. A&E services were always provided by public healthcare facilities. There were also private hospitals that you could obtain private medical insurance for. They were known for a higher grade of service, but they didn’t have emergency rooms. That was still under the control of the government.
My first experience with this was having ingrown toenails removed. These days that would be considered outpatient procedures, but back when I was about 10 years old, it was full surgery at a massive government hospital. The procedure went fine, but I remember coming out of the anesthetic and I was sick as a dog. I guess the technology has come a long way since, because I have never experienced that before, but overall it seemed to do the trick.
When I was a teenager, I was stung by a jellyfish while surfing in the ocean. This put me in the ICU, since the poison started to balloon up my body to the point where it was risking my critical organs failing. I was in a university hospital for that stint – again, a government facility. Although being in the ICU wasn’t nice, because each night the people in the beds near me didn’t make it through the night, and I was wide awake, watching dead bodies being wheeled out each morning – people that I had a regular conversation with the day before. That was pretty scary. But again, government run hospital.
When I had a major motor vehicle accident when I was about 32 years old, I was taken into a government hospital. The initial triage was government provided. They would patch you up, and their airlift you to a big government hospital facility inmyhomecity. Iwokeupinawardof8others. Thatis8bedsinaroom. They would wheel me down for diagnostic imaging, with some so called technician who had no interest in patient comfort – he just wanted to get the images taken. I remember how much pain I felt while this idiot just forced me to twist & turn to get his damn photos. I’d also be wheeled down for a couple of surgeries to try and put my bones back together. It was quick & dirty work – much like what I would expect to see on an episode of Mash. Military grade triage.
And throughout all of this, I had private health insurance. I could have been transported to a private facility, but I was no awake enough or of sound mind to tell them that I had it. Even when they discharged me (all too early btw, and with me overhearing statements like “We need the bed for the next victim”), no one ever asked me about my coverage. They sent me home a cripple – I almost fell down and broke everything they did the day I got back to my house. I had no support, other than a nurse that would visit once a day to help me shower and check my vitals. This was the worst experience I have ever had with medicine. Reminded me of some soviet era healthcare experience.
In Australia, they would take 3% (I believe it is more now) of your overall income that went to Medicare. Medicare is the government provided health insurance system. You had no choice – it was forcibly extracted from your pay. The money went into some massive pool and then was divvied out to the states to fund their
public hospitals. I remember that back in the 1990s, I had written some software for medical scheduling for doctors practices, and doctors put themselves into categories – those that did “bulk billing” and those that only took private health insurance. The bulk billing was a way that doctors could get through massive case loads by trying to spend 15 minutes or less with each patient, because the govt limited their income so dramatically that they had no choice. The other doctors chose to not deal with the government if they could, but that resulted in a much lower patient count. For those looking at quality over quantity, this seemed to be a better fit.
But the whole thing – whether you were a patient or a doctor, was pre-ordained based on money. You always thought, “Well if I get hit by a car, at least they will take care of me”. Well I did have a massive car accident, and I can tell you that if that is what “taking care of you” looks like, it doesn’t pass my acceptable level of quality.
Eventually even the government medical system failed me, as they refused further surgeries to try and put me back together as I should have. The private surgeries were not available to me either – there was some stigma over motor vehicle accidents that no doctors wanted to touch these cases. They knew there was a lot of litigation in this, and no doctor wanted to become an expert witness against one of their peers. So they basically wouldn’t take those cases.
Of course years later, when I returned to the USA, I was immediately excluded from healthcare because of my pre-existing condition. I knew the rules there. I remember so many of my friends in Australia would be shocked that every individual in America didn’t automatically get health care if they needed it. It made me laugh, because the nice & comfortable illusion they were living in, in Australia, was that even if they did get sick, roll the dice if they were going to get adequate levels of healthcare there either.
A good friend of mine’s wife lives in South Australia, and I’d periodically catch up when I was in their town. He’d tell me about his wife’s hip problems. She had some major issue with her hip, resulting in the bone becoming almost liquified so she couldn’t walk, was in major pain all the time, and totally disabled. She was 41 years old. He told me that he was trying to get a hip replacement for her, but the government wouldn’t do it.
There is this thing where if you have what the government classify as an “elective procedure”, then you have to wait. The minimum wait time is typically 2 years and it can be up to 5 years. I mean imagine living with that for years. It was horrible. His wife contemplated suicide over it. If it wasn’t for him having a buddy that he went to high school with, who became a board certified surgeon, that stepped in and found a way to re-classify it so it would get immediate attention, I have no idea what he and his wife’s future would have been.
She’s fine now. She had her surgery, but he had to drive across state lines to get it done – thanks to the help of his friend from high school.
Why am I telling you all of this?
First, as a warning that assumption that you have coverage for some medical issue shouldn’t be a default position because you think you have some form of insurance or government coverage. The reality is that in my experience, in about 50% of all cases, you find yourself either under-insured or uninsured, although you think you and your family are covered.
We all have either had the experience, or know someone who has, where after getting some medical intervention, you spend hours on the phone trying to plead with your insurance company that they pay for it. They send you bills after the fact of things that shouldn’t be charged. The old trick when you are in hospital and some doctor pops his head through the doorway and introduces himself, only for you to find weeks later a bill for “consultation” from him, and he’s out of network so you have to pay the $200 or so for that little chat. But you have no control over this. The $6K aspirin that you get provided. The $35K bill for 3 nights hospital stay, outside of the surgery, surgical team costs, prosthetics, drugs, etc. And there’s you – stuck on the bed. You can’t say No to any of this. I mean you are sick. Who’s really taking care of you here?
The only saving grace that US persons seem to have is to hit the ripe old age of 65, when you can get government provided Medicare. But although that seems to be a much better system for the provision of healthcare, it isn’t perfect.
You see our bodies were never expected to last to 100 years. Or 80. Or even 60. It was only a couple of centuries ago, that our life expectancy was more like 40 years. Was it because of the plague, or some other illnesses? Sometimes, but in general that’s how long the human body was designed to last. We’ve evolved through the invention of pharmaceuticals, vitamins, supplements, exercise, technologies, etc. and now we can live double that number. But there are some parts of our bodies that don’t evolve:
1. Our teeth
2. Our eyesight
You see these things are designed for the 40 year life expectancy of a 1650s human. That’s why when you hit the ripe old age of 40 or 50, you eyesight starts to fade. Sometimes earlier. Or you start to need to go to the dentist more often. It is why they tell you as a child to brush & floss all the time. Because they know that the life expectancy of teeth is closer to 50 years, and your life expectancy is more likely 75 years. What you do to extend the life expectancy of your teeth will pay off after the age of 50. I wish someone told me that in my youth because I would have been more diligent about brushing.
The same is true of eyesight. That’s why most people over the age of 50 are wearing glasses. Their eye muscles are dying earlier than their bodies and they need external support.
But knowing these facts, why is it that Medicare excludes dental & vision care? Because they know that it may break the bank if they are on the hook for this.
Then there are prescription drugs. Some are covered, but others are not. The pharmaceutical game in the USA is disgusting. I’ve seen this from the inside having written software to handle pharmaceutical claims processing. I’ve seen how it works, and how pharmacies that fill your script are often screwed over by the insurance industry on trying to paid, forcing them to overcharge, compound ingredients, or find creative ways to change supply counts to get things through. Often they have to pay 3rd parties to handle all of this because they simply don’t have the staff, and they take a massive discount on the money that they are entitled to, for just filling your script.
This creates a market for middle-men to fill and of course this just keeps pushing up prices.
I have lots of friends of mine that do what I do – we cross the border into Mexico, over at Los Algodones, which is just on the California side of Yuma, Arizona, in which you can park your car on the US side, walk into Mexico, where the world’s largest medical tourism town exists. Because of the dental and vision needs of older Americans, this is the #1 provided service. In Los Algodones, there are over 115 dentists working in a 4 block radius just on the border. Additionally discount vision, and a slew of pharmaceutical providers will sell you what you need – usually without a prescription. Although I’m not sure what the current status is, a Z-Pack of antibiotics in the USA that was typically selling for $38 at Walgreens can be purchased in Los Algodones for about $2.99.
We make that trip about 2-3 times a year for vision & dental work. Even a dental cleaning is about 1/3rd of the price of the USA. We’ve had big procedures done there, where my wife had about $30K of dental work (based on quotes from dentists in the USA) and the net cost was about $4,800 in Los Algodones.
But it gives you an example of the markets that pop up to meet a need that isn’t be serviced by government provided healthcare. I know this is not just a US problem though – I am often chatting with someone from Canada down there while waiting in line to cross back into the USA. Seems they have the same issues up north too.
OK, so let’s make some quick summary points here:
1. The medical industry is milking people in the USA because of the massive amounts of money extracted by way of health insurance
2. The provision of healthcare by government directly, per my and my friend’s experience in Australia, is sub-standard
3. Even Medicare for those over the age of 65 in the USA, excludes things that the government knows to not last a normal life expectancy – dental & vision.
And the restrictions on pharmaceutical benefits force many Americans to have to do drastic things to get basic drugs
4. And life expectancy in the USA is reducing – not getting longer.
Now there’s you and your family.
You have the right to health care. You have the right to live a long and quality life, without any of these stresses.
So how do you do it?
Well the way it works for me is to change some paradigms. First, I would break healthcare into 3 categories, because each category has to have a different strategy.
1. Pro-active care
2. Elective care
3. Adverse & Chronic care
Pro-active care is when you take control of the things that should help avoiding things. That means eating nutrition, rather than “fake food”. It means regular exercise – both resistance and cardio. It means taking supplements for things that support what you are not getting from nature. It also means you recognize that you were not designed to sit on your ass all day at work. You were built to be upstanding and to hunt or farm. So if you are not active as if you were doing what your body was designed to do, then you have to supplement activities to try and make that right.
By taking some interest in your health, not only will you feel way better but you will also likely live longer and not need elective or adverse care as much. This is something you have control over – but not enough of us seize that control.
You see our “medical industry” doesn’t have a solution for pro-active care. People don’t go to their doctor to get advice on better nutrition. They go to the doctor to get a script for drugs, for the most part. That’s how the industry works. It is because the health insurance industry that funds the medical industry tries to put everything in one big basket, and the answer to healthcare needs is a script or surgery (or both). But that is not health care in a holistic sense.
Elective care is when you have some intervention required, but you control the schedule. Typically this is when you get surgery for something that may be an impediment to your life, but you can live with it if you have to. Think of things like hip replacement, knee replacements, shoulder, etc. The things that wear out faster than the rest of your body because of over-use.
Since this requires surgical intervention for the most part, people realize that the
hospital is going to be a part of the problem. That means a multi-day (sometimes multiple week) process in which they can’t work and either need to take time off, or fund their burn rate themselves during that time. No employer is going to look kindly on those things – they might say that and gas light you on it, but the truth is that most employees fear taking time off work. They don’t know if they will have a job when they return, or whether they are moved aside in favor of someone else.
Additionally the way that health insurance in the USA works, you are responsible for the deductible (often referred to as a Co-Pay). And depending on the monthly premiums you are paying, it can be as low as $2000 and as high as $15,000. So not only do you have to fund your time off work, but you are going to be paying a substantial amount to get it done.
Consequently many Americans elect to not address it. That means the problem will typically get worse and result in other parts of your body being over stressed to compensate for the issue. If left long enough, eventually the entire body chain breaks down and leads to the third category of health care.
And that is Adverse & Chronic. This is when something happens unexpectedly and you have no choice. Think car accident, heart attack, cancer, broken limbs, etc. The really bad stuff. The life threatening stuff. The stuff you are probably most concerned about.
This is where your fear is an opportunity for the medical industry. They have created a healthcare system in the USA that supports adverse & chronic care over all other categories. You will pay $2000 a month for health insurance if you are scared of having a heart attack and going into hospital.
In April 2021, studies done in the USA cite that 62.1% of all bankruptcy cases are from medical bills. Yes, almost 2/3rd of all bankruptcy cases are medical bankruptcy cases. Considering that some procedures can be $500K-$1m in total cost, it is not surprising. The lack of having medical insurance at all means that the hospitals and medical distribution systems are free to charge you anything they want – they are not forced to code all procedures and work without pre-negotiated rates like the insurance industry demand. So you are fair game to them if you have no insurance.
You would think that maybe negotiating a “cash price” for some medical procedures works, but it doesn’t. If the facility providing the service is used to dealing with insurance companies to get paid, your cash is an impediment to them. In fact, you now are paying 2x the price because someone has to fund the medical claims they submitted to the insurance company and didn’t get paid on. Unfortunately that is you.
No politician ever tries to run for office by not promising to fix this in some way. And no politician ever has. Fact – this system has gotten worse & worse since the 1980s and even to the point where the very same pharmaceutical industry, greedy on the lofty profits, created the Opioid crisis that killed so many Americans –
Americans who had no history with drugs before, but due to a workers compensation claim, or a motor vehicle accident, suffered great pain and the default position was to prescribe opioids to combat the pain, despite the highly addictive nature. And when the pain management spigot was turned off, they turned to heroin as the cheapest form of management. Creating the greatest overdose rates the world has ever seen.
You see, your medical industry does NOT have your back.
So what does this Unconstrained individual do to seize back my rights for healthcare?
Rule #1 – Keep as healthy as you can. This means all things in moderation, and I go to the gym 4 times a week. 3 times for resistance training and once for cardio. I may change that out to 2 times resistance and 2 times cardio, but at this point I’m doing rehabilitation for my shoulder so I need more resistance training. I pay for this directly to my gym/trainer and it costs me about $200 a month in total. There are deals out there if you seek them out.
For food, my goal is to grow 75% of what I eat, but that’s hard to do in the desert. So I spend time at farmers markets and Sprouts (a larger fruit & vegetable specialty store in Arizona). For protein, I try and go with beef, chicken, pork & fish. I realize that the antibiotics fed to cattle and large scale chicken farming is horrible, but I don’t get much of a choice unless I pre-order an entire pig from a farm, have them slaughter it and receive all parts of the animal and freeze it. I realize for you vegetarians, you are probably cringing right now. But each to their own.
I also am completely aware of the dangers of genetically modified organisms in our food supply. It is one of the reasons I am so bullish on Mexico. They have flatly banned GMOs from their farming industry, so I know that when I get food in Mexico, it came directly from the farm and although I realize I have to be aware of eColi in the food & water supply there, I can treat food before cooking it to ensure I remove any toxins.
Rule #2 – I get all of my dental & vision work done in Los Algodones. I make the 3 hour drive from Phoenix about 3 times a year there, and I have a dentist that is our family dentist there who has taken care of our dental needs now for about 8 years. I will get routinely cleaning done there, exams, etc. and rarely do I spend more than $75 for a full cleaning and full 3d X-Ray exam. If only the cleaning, it is typically $50. I realize there are plenty of dental hygenists in Mexico that do cleanings for about $20, but I have a particular favorite and I’m happy to pay a premium (if that is what you call it).
For eyeglasses, I get regular prescriptions updated at least twice per year. I can get two pairs of prescriptions done there for about $75. Yes, that’s for 2 pairs. If I get to the opticians before 11AM, I typically can pick up my glasses by about 2PM
that afternoon. So I time this to hit the opticians first thing in the morning, then get my dental work done. Then some lunch, and shortly after that the glasses are ready to pick up.
I will grab any prescription drugs that I need there on my way out. The pharmacies are excellent and I make sure to keep a supply of antibiotics, along with other creams, etc. if needed.
Rule #3 – I get all my elective procedures done in Guadalajara. This comes from previous experience of having major shoulder surgery down there. GDL is a university town for medicine, and although you could probably get similar service levels in Mexico City, the smaller population of GDL has its advantages. Doctors have access to all the diagnostic facilities and will immediately send you to them. They often wait for you to return to review the imaging.
To give you a sense of price comparison, in Arizona it is about $4,000 for a MRI scan here. The same scan in GDL is about $270. Similar differences in pricing for X-Rays, etc.
Doctors will give you a fixed price quote for medical procedures, and often a choice of a number of hospitals from cheap to expensive. The private medical industry in Mexico is the highest quality of care I have ever had, and that’s compared with Australia & USA. The low stress nature of medical services in GDL means that you often don’t get as many medical errors in procedures. I was amazed at how much “measure twice, cut once” attitude there was to medicine there.
Also the MX medical industry is equally influenced by US medical procedures and European. This means that often they do things differently but based on a more global approach to medicine. Many of the surgeons were trained in the USA or Europe as well, so they bring back that level of training to their local market.
Most private hospitals have websites, and they have staff surgeons who are generally really good. But if I was looking for a specialist, I would typically reach out to the expat community to find what they think. Areas like Ajijic which have an older expat demograhic are great for this because they love to recommend someone who has helped them and typically go to GDL for their procedures.
Rule #4 – I carry adverse medical insurance
I realize that many people try to find a way around this. They use Christian Medical Plans, or some other way to address this. But from my own experience, this is the ultimate insurance I need in a SHTF moment. I can’t have it fail me. I would go with what supports the local hospitals that I am more likely going to be near if I was to have an accident. So I would ensure that the insurance covers them as “in network”.
I realize that this can be a multi-thousand dollar a month cost. I am looking at trying to reduce my income levels down to qualify for the Affordable Care Act
support here, but the problem is that if I have a decent year of income, I could be on the hook for $2700 a month policy costs pay back, and since my current private coverage is about $1,100 a month, I am tempted to just stay with that. Sure, high deductible, but I have a medical emergency fund in place with a local bank for that. Touch wood, I don’t need to tap into it.
Now all of this is what I do. You do you.
I’m not advocating that my techniques are a perfect fit for anyone (including me). But I’ve seen what putting your faith & trust in counter parties looks like here. It didn’t end well for me, or my friends in Australia. Statistics show that it doesn’t end well for 62% of all bankruptcy cases in the USA either.
Look, the risks are huge here. If you have amassed a decent amount of assets over the years, and you are scared to death of getting sick and losing it all, then you probably need a decent asset protection strategy in place. I can tell you that the best one I use is to get my assets spread around the world.
It is hard to find peace in this topic. Yes, you have the right to healthcare. But you have a shelf-life. So you want to take care of you as much as you can. That’s the best thing you can do to live a rich life of quality. There is no sense in only focusing on how much money you can make, if you lose it all to medical costs or you neglect your health over some unbridled pursuit of money. All things must be done in balance if you truly want to be unconstrained.