Sale! Sale! Sale!

Americans lurve sales. We shop the grocery fliers. We bargain for our cars. We go to garage sales.

I bought milk on sale Saturday because it was “on sale” but it would be “regular price” today when I actually run out. I have to buy milk every few days, sale or not, but I try to time it to match the store cycles.

On the other hand, I’m in the market for a new-to-me pickup truck and a camera lens. I don’t need either of those today so I’ve been more picky waiting for the price I’m willing to pay.

Willing to pay is the key.

Ever tried to figure out what that new car actually cost the dealer? How about what the dealer paid for that “certified pre-owned”?

I found a car on sale recently. A dealer bought the car for $9,500 and spent about $400 for repairs and reconditioning. The car went on the lot for $13,990. That’s more than a 40% markup for some “floor” space on a gravel lot.
The eventual buyer “negotiated” the price down to $12,450 for that $9,500 car.

We trust used car dealers, don’t we?

The Interwebs have exploded with people discussing Mr. Sanders and his plans to tax the rich to fund free universal health care, free college, free birth control, free housing for the poor, and more. One poster wrote:

“Obamacare is a giant bloated horrible mess. Medicare is much the same. We can’t simply toss them in the trash, though, and tell everyone, ok now, go out there and shop for insurance same as you do shoes, good luck! Because unlike the kabillion shoe-sellers competing with each other for our business, there are only a couple health insurance companies colluding to eff us all up the ass. No matter what happens, they are guaranteed to raise their rates and make more money. Nothing and no one stops them, the way things are currently structured. Obamacare never even pretended to fix this.”

Mr. Obama lied.

The NYTimes reported that, Back when he was pushing the Unaffordable Care Act, President Obama lauded Grand Junction as a model of better, cheaper health care. “You’re getting better results while wasting less money,” he told the residents.
It turned out that Grand Junction’s Medicare billings were lower than average with no impact on health outcomes. “All we have to do,” he implied “is get the rest of the country acting more like Grand Junction, to get U.S. medical costs to drop.”

Grand Junction is one of the most expensive health care markets in the country for anyone on ObamaDon’tCare or any other private insurance despite its unusually low spending on Medicare. It turns out that Grand Junction has a small enough, healthy enough Medicare population that providers can cost shift to the private plans. Grand Junction has a big enough population with little enough competition that they can charge mostly what they want.

That works because a house call used to cost one chicken but today we have no idea how much your physician will charge for the half-dozen “procedures” that go on the bill for a simple checkup.

Have you ever asked your doc what an office visit costs?

And no one every notices that Emperor Obama’s plan has no clothes.

We need a sale!

Oh. Wait. Here’s a more personal example of costs and transparency.

SWMBO had a “screening mammogram” last fall. The bills included the actual boob crushing/digital picture taking, computer analysis, more computer analysis, and an assessment. The hospital billed $402. The physician who read the “film” charged $151. Medicare paid the hospital $104 and the doc $38, about a third of the billed cost.
No one at the hospital knew how much it would cost. No one could even tell us who would “read the film” so we could ask that price.
A south Florida provider advertises “cheap” mammograms for $799. The commercial doesn’t tell us if that includes just imaging, imaging and computer assessment, imaging and computer assessment and assessment, or something else.

We had no idea how much SWMBO’s procedure cost until Medicare sent us the make good on how much they paid. It’s intriguing that the total charge (not what we paid but the total charge) was less than the “cheap” one in Florida.

Medicare is like getting medicine on sale, right?

I’ve written about cost shifting before.

ObamaDon’tCare is like getting medicine on sale, right?

Rather than reducing costs, the Unaffordable Care Act has raised the annual cost of health care from $8,299 to $9,146 last year to a looming $10,000 per person this year. That makes it a $3.2 Trillion budget item. That’s THREE POINT TWO TRILLION DOLLARS.

Mr. Sanders’ failed-plan to expand health care coverage is pretty simple arithmetic. He wants to expand health care coverage by adding or increasing specific taxes (a 6.2% income-based health care tax plus a 2.2% income-based tax, plus new progressive income tax rates, plus capital gains and dividends taxes, plus estate tax). Total government spending is about $3.8 Trillion for the Feds and $6.2 Trillion for all U.S. Federal, state, and local governments. Mr. Sanders will double the Federal budget and push government spending overall to about $10 Trillion. That’s TEN TRILLION DOLLARS.

Mr. Sanders’ “let’s pretend we can do it by soaking the rich corporations” approach takes away the retirement of seniors and guarantees poverty for everyone else working for for a living.

We need a sale!

Many pundits believe all we need is some transparency. They’re wrong, too. Just knowing how much an office visit costs is only part of the solution.

The real answer is simpler. There isn’t enough money in the U.S. economy to pay for the current model of U.S. health care whether it is nationalized a la Mr. Sanders or market-based a la the national association of used car dealers.

Back in 2009, my treatise on fixing the U.S. health care system started from a simple premise: Health care in America is fundamentally broken. The numbers in that piece are still dead bang on. In 2018, I wrote then, “health care will cost $13,000/year for every man, woman, and child in America.” It’s 2016 now and we’re at $10 grand already.

The fix is a two-part piece, starting here.


This directory lists some of the earlier  No Puffin Perspective™ articles about the Patient Protection and Unaffordable Care Act signed into law by President Obama in 2010.

 

1 thought on “Sale! Sale! Sale!

  1. I overhear my cube-neighbor’s phone conversations sometimes. Hard not to. I try not to pry, but he impresses the hell out of me from time to time and I can’t help but make an admiring comment.

    He bought a car this past weekend — necessary because his car had broken down severely so he borrowed his mother’s unused car, then his wife’s car more or less blew up — did something that was so mechanically catastrophic that it would have cost $10,000 to repair.

    So he bought a car this weekend. A 2016 Toyota Tacoma.

    The phone call I overheard was from the salesperson at a lot where he had been prepared to buy a red 2016 Tacoma in Pinetop, AZ but apparently walked out without purchasing. He instead drove to Tucson to a dealer there that had the exact same vehicle (except it was silver) with the gizmos and whatsits he wanted on it and bought that one.

    It wasn’t the sales person’s fault that he walked out on the deal in Pinetop. He spoke in friendly, measured tones, telling her she had done an excellent job and he appreciated all the things he had learned from her about the vehicle. He had indeed been ready to buy that truck. Her manager, though, who took over the negotiations, soured it. The manager refused to budge on the price. Refused. Told him he had no leeway for it.

    Now, my cube-neighbor had done his research and knew exactly what these things were actually going for. Knew the dealer’s costs, knew the correct markup. This truck was some $3000 higher than that figure. He wanted the fair price. The manager might have been told he could not move this truck (which had been on that lot for 2 weeks) for any less than the asking price because maybe the purchaser had overpaid and they wanted to recoup some of that. Who knows? Point is, the sales person lost her commission because the dealer’s guy would not negotiate nor offer for sale.

    At the second dealer, my cube-neighbor paid *below* the price he would have been willing to give the first dealer by about a thousand dollars. THEY were willing to negotiate and wanted to move the stock.

    Dunno what point I’m trying to make. But it’s a cool story. Except for the Pinetop car sales person who didn’t get her commission.

    Your fruit thingie tells me to click the “banana” (singular) but I see no solitary banana. Now I am confused and a bit irritated.

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