John Oliver Forgives $15 Million in Medical Debt

[Au165]

http://www.nytimes.com/2016/06/07/arts/television/for-his-latest-trick-john-oliver-forgives-15-million-in-medical-debt.html?_r=0

This is interesting on a couple different fronts to me. The first is it does expose how shady the collections business is. The fact any idiot can set up as a collections agency is a pretty scary thought. The other thought is while I'm sure some of this debt was so old it was probably going to be impossible to ever collect on, the medical industry must have enormous amounts of uncollected medical debt if he was approached about buying $15 Million of it almost instantly after setting up his fake collections agency.

To me this signals that they are out pricing their market, yet instead of forcing the seller to adjust to the fair market price we continue to use insurance to artificially inflate it's value. If John Oliver could buy $15 million in debt for 60k from a third party, that third party had to have gotten it for even less. If Hospitals are going to end up taking massive losses anyways why not readjust their pricing to get closer to a price people can attempt to pay rather than walking away from the debt?

Also, without knowing the slight nuances of corporate tax law, couldn't large corporations buy up this large debt for pennies then write it off at the value of the debt owed since it is technically a receivable they "could" receive? It would seem to be a good way to get some positive PR and get a tax write off while they are at it.

[Benton]

(06-07-2016, 11:44 AM)Au165 Wrote: http://www.nytimes.com/2016/06/07/arts/television/for-his-latest-trick-john-oliver-forgives-15-million-in-medical-debt.html?_r=0

This is interesting on a couple different fronts to me. The first is it does expose how shady the collections business is. The fact any idiot can set up as a collections agency is a pretty scary thought. The other thought is while I'm sure some of this debt was so old it was probably going to be impossible to ever collect on, the medical industry must have enormous amounts of uncollected medical debt if he was approached about buying $15 Million of it almost instantly after setting up his fake collections agency.

To me this signals that they are out pricing their market, yet instead of forcing the seller to adjust to the fair market price we continue to use insurance to artificially inflate it's value. If John Oliver could buy $15 million in debt for 60k from a third party, that third party had to have gotten it for even less. If Hospitals are going to end up taking massive losses anyways why not readjust their pricing to get closer to a price people can attempt to pay rather than walking away from the debt?

Also, without knowing the slight nuances of corporate tax law, couldn't large corporations buy up this large debt for pennies then write it off at the value of the debt owed since it is technically a receivable they "could" receive? It would seem to be a good way to get some positive PR and get a tax write off while they are at it.

This has been an issue for a long time. A lot of it goes back to the uninsured and the inflation of prices.

I've got insurance. About a month ago my son had to get his appendix out. We got the bill two weeks ago. A little over $16,000. Insurance covered most of it, but for a lot of folks, that's $16,000 they'll never be able to pay. And that's a minor surgery. Cancer treatment, heart caths, major surgery... it goes on up. So hospitals write off a percentage of the loss, sell the debt and it gets passed around.

But it's not just medical debt. We deal with people buying up backed tax debt for nothing and trying to collect. Many times it's already been paid, but they still try to collect on the "outstanding" debt. Those people are pretty scummy.

[Au165]

(06-07-2016, 11:55 AM)Benton Wrote: This has been an issue for a long time. A lot of it goes back to the uninsured and the inflation of prices.

I've got insurance. About a month ago my son had to get his appendix out. We got the bill two weeks ago. A little over $16,000. Insurance covered most of it, but for a lot of folks, that's $16,000 they'll never be able to pay. And that's a minor surgery. Cancer treatment, heart caths, major surgery... it goes on up. So hospitals write off a percentage of the loss, sell the debt and it gets passed around.

But it's not just medical debt. We deal with people buying up backed tax debt for nothing and trying to collect. Many times it's already been paid, but they still try to collect on the "outstanding" debt. Those people are pretty scummy.

This goes back to the whole point. Insurance almost does more harm than good. What happens is they have adjusted prices knowing the insurance companies will pay them, but for those without it is impossible to pay. Now we require everyone to have insurance, but how about instead we require the hospitals to properly price services first and see how that fixes things.

[Benton]

(06-07-2016, 12:01 PM)Au165 Wrote: This goes back to the whole point. Insurance almost does more harm than good. What happens is they have adjusted prices knowing the insurance companies will pay them, but for those without it is impossible to pay. Now we require everyone to have insurance, but how about instead we require the hospitals to properly price services first and see how that fixes things.

Oh, that's been suggested a few times over the years, but it usually gets painted as socialism and people get terrified of the word. The short of it is, unless we treat healthcare along the same lines as basic essential utilities like water and electricity, someone is going to manipulate the prices to make a lot of money. That's capitalism. 

[StLucieBengal]

(06-07-2016, 12:01 PM)Au165 Wrote: This goes back to the whole point. Insurance almost does more harm than good. What happens is they have adjusted prices knowing the insurance companies will pay them, but for those without it is impossible to pay. Now we require everyone to have insurance, but how about instead we require the hospitals to properly price services first and see how that fixes things.

The only way to get proper pricing is to take away all medial insurance and force everyone to pay out of pocket.   Costs would plummet 

[Au165]

(06-07-2016, 05:52 PM)StLucieBengal Wrote: The only way to get proper pricing is to take away all medial insurance and force everyone to pay out of pocket.   Costs would plummet 

Well you can't take away insurance. You could however stop the practice of showing one billable price then charging insurance companies a much cheaper price then what customers see to make it appear as though there are tons of costs associated with medical care.

[fredtoast]

(06-07-2016, 05:52 PM)StLucieBengal Wrote: The only way to get proper pricing is to take away all medial insurance and force everyone to pay out of pocket.   Costs would plummet 

This makes no sense.  Right now peopl pay enough for health insurance to pay all the high priced medical bills PLUS make health insurance companies multi billion dollar businesses.  Why would they suddenly be expected to pay so much less.  Doctors and hospitals know that people are already paying more for the services.  They would not reduce their prices at all.  In fact they might raise them

[StLucieBengal]

(06-07-2016, 05:59 PM)fredtoast Wrote: This makes no sense.  Right now peopl pay enough for health insurance to pay all the high priced medical bills PLUS make health insurance companies multi billion dollar businesses.  Why would they suddenly be expected to pay so much less.  Doctors and hospitals know that people are already paying more for the services.  They would not reduce their prices at all.  In fact they might raise them

It wouldn't raise them to the point they don't have anymore customers 

[Benton]

(06-07-2016, 05:52 PM)StLucieBengal Wrote: The only way to get proper pricing is to take away all medial insurance and force everyone to pay out of pocket.   Costs would plummet 

You sell toasters. You sell them for what the market pays. If someone has a toaster replacement program for whenever theirs goes out, you don't change your price. Why would you? That wouldn't make any sense. You're not in the warranty business, you're in the toaster selling business.

Now replace "toaster" with  "medical services" and "replacement program" with "insurance". The main difference being you can live without toast (it's hard, but you can). You can't live without your liver (I know, I've tried).


Costs won't change. If someone with a spreadsheet knows he can get X for your cancer treatment, he's going to charge you X+Y to improve the profit margin. Want to change that? Take out the spreadsheet guy, the for-profit healthcare.

[StLucieBengal]

(06-07-2016, 06:04 PM)Benton Wrote: You sell toasters. You sell them for what the market pays. If someone has a toaster replacement program for whenever theirs goes out, you don't change your price. Why would you? That wouldn't make any sense. You're not in the warranty business, you're in the toaster selling business.

Now replace "toaster" with  "medical services" and "replacement program" with "insurance". The main difference being you can live without toast (it's hard, but you can). You can't live without your liver (I know, I've tried).


Costs won't change. If someone with a spreadsheet knows he can get X for your cancer treatment, he's going to charge you X+Y to improve the profit margin. Want to change that? Take out the spreadsheet guy, the for-profit healthcare.

The price of toasters isn't all that high.  There is no need for a replacement program.    I could see scenario where you make an arrangement with your doctor for some sort of yearly fee.   But then since he would be insuring you he would be careful to find the best pricing.   

[fredtoast]

(06-07-2016, 06:02 PM)StLucieBengal Wrote: It wouldn't raise them to the point they don't have anymore customers 

There will always be customers for health care.  That is part of the problem with controlling costs.

[fredtoast]

(06-07-2016, 05:52 PM)StLucieBengal Wrote: The only way to get proper pricing is to take away all medial insurance and force everyone to pay out of pocket.   Costs would plummet 

BTW how the hell are you going to "take away" a service that most people need?

That would take some pretty extreme government control of the free market.

[Benton]

(06-07-2016, 06:08 PM)StLucieBengal Wrote: The price of toasters isn't all that high.  There is no need for a replacement program.    I could see scenario where you make an arrangement with your doctor for some sort of yearly fee.   But then since he would be insuring you he would be careful to find the best pricing.   

The price on a broken arm isn't all that high either, but you'll get charged over a thousand to have it set. Double that if you went to the ER. Done "at cost" would be a couple hundred bucks, most of that being salary.

To the bold part, that's concierge service. I've been trying to read up more on it. I spoke to a family last week from LA and they said most of the family/pediatricians in their area were switching to that. The cost was high ($10,000-$20,000 annual fee) but both the doctors and patients were happier. According to them, doctors in their area are moving from the insurance/hospital mandated quotas back to their own practice with that model, and instead of having 100-200 clients, they're down to 20-50 depending on the specialty. But from what I've heard, insurance companies pretty well hate that because the doctors order more tests and try to be more thorough.

[Nebuchadnezzar]

My son had rods put into his back to help straighten it some and to stop the curve from increasing. Crazy, we measured his height before and after the surgery and he grew three inches. Anyway, that surgery cost over $100,000.00 and lucky for us, my wife worked for the hospital the doctor and surgery were. Insurance covered 80% of it and the hospital automatically wrote off the other 20%. 

Anyway, I think the reason healthcare prices stay so high is because for every person who can't pay, 10 people can. You can take a $100,000.00 loss when you've made a $1,000,000.00 and use that $100,000.00 as a tax write off?

Maybe Matt can answer this better but why lower prices if you will not make as much by doing so even if there are those who can not pay?