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Today, the U.S. Department of Justice issued a warning to the Academy of Motion Pictures, effectively saying: “Don’t cross the line to further solidify your monopoly!”

The Academy, which produces the Academy Awards (a.k.a., the Oscars) is contemplating rule changes that would effectively shut Netflix movies out from Oscar contention, relegating them to the Emmys as “Made for TV Movies.”

Obviously Hollywood insiders are trying to protect their turf, and fortunately for all of us, the Justice Department is totally on top of things, taking pre-emptive action to prevent the Motion Picture Academy from extending its monopoly over the film industry.

This should come as a relief to all of us Americans who thought the Justice Department was asleep at the wheel and didn’t care about monopolies stifling competition. I was getting particularly concerned (but am now relieved), since the U.S. Government Accountability Office just issued a report on the subject. Here’s the first paragraph from the report:

What the GAO Found 

Enrollment in private health insurance plans continued to be concentrated among a small number of issuers in 2015 and 2016. In the overall large group market (coverage offered by large employers), small group market (coverage offered by small employers), and individual market (coverage sold directly to individuals), the three largest issuers held 80 percent of the market or more in at least 37 of 51 states. This is similar to what GAO previously reported for 2011 through 2014.

Note: Please do not ask me which GAO official’s 6^th grade geography teacher taught them that there are 51 states. We all know what they mean. I think. Puerto Rico? The District of Columbia? Maybe—that would be 52. So, I guess we don’t really know after all.

When a behemoth industry is reduced to such a small number of competitors and can’t quite be called a “monopoly,” it starts to resemble Russian oligopolies, which in American parlance is often referred to as “organized crime.” In Oligopolies, it becomes more profitable for the small number of competitors to “play the game” than to truly challenge each other. When an industry grows to 6, 7, 8 or more competitors, success depends on innovation and efficiency. When reduced to just three, the cost of a price war exceeds the potential gains. So they play ball, not trying to outdo each other. This is how organized crime works. When there are two or three, or even four crime families that control a city’s drug trade, they all play by the unwritten rules, sticking to their territory and keeping prices consistent. Only when the 5^th, or 6^th, or 7^th crime family (or gang, in many cases) enters the market, do they really have to battle for their territory.

A battle is what we need, because that’s the nature of markets. When just a few hospital systems or insurance carriers dominate a market, they play the game. Only when new competitors try to enter the market do they really get competitive — improving quality and service, and driving true innovation. That’s missing in American healthcare, because both providers and payers (insurance carriers) are increasingly participating as members of an oligopoly, often regional in nature because of the way healthcare works. In other words, what we’re dealing with can best be described as the healthcare cartel, and we need the Justice Department to engage and battle it like any other cartel.

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As the Federal Government prepares to implement new rules requiring greater price transparency in healthcare, the healthcare industry’s army of lobbyists is being fully mobilized.

At the top of the list of arguments against price transparency is the idea that patients don’t use price information, even when it’s available to them, because “healthcare is different.” It’s a misleading argument at best, because we’ve never experienced, or experimented with, a system of truly transparent pricing in healthcare.

In her blog on the CMS website a few months ago, CMS Administrator Seema Verma wrote, “You have a right to know the price.” I couldn’t agree more. The paradox is that once everyone knows the price of something, we don’t really need to know it anymore. That’s because in real consumer markets, we mostly act as a collective, not simply as individuals. And as long as prices are transparent and a small number of us check them, we all benefit. Without transparent prices, the fact that one party checks prices wouldn’t do anyone else any good, because we wouldn’t know if we were being charged the same price as everyone else. But in a system of transparent prices, we’d know. Now, that doesn’t mean sellers must charge us all the same price, it just means they’re more likely to. Economists call the phenomenon “price convergence,” the presence of which is one of the key indicators of whether a market is working. The complete lack of price convergence in healthcare is the most obvious and glaring signal that the market simply doesn’t work.

I call the phenomenon of collectively driven markets, “We, Not Me,” markets.

To understand the phenomenon of “We, Not Me,” in everyday terms, consider that your local supermarket has about 50,000 uniquely bar-coded items on its shelves. When we enter the store, we don’t necessarily know what we’re going to buy, we just know that the price of everything is available, if we care to review it. At the supermarket, we buy things by the quart, or pound, or piece, or bunch; we buy a bottle, or a six pack, or a case; we use coupons and loyalty cards; and we know which supermarkets trend towards luxury items at higher prices and which provide great bulk discounts. Many of us don’t know the difference between dried milk and condensed milk, baking soda or baking powder, and we’ve never heard of most of the cheeses in the cheese aisle. Yet somehow, we still make good choices without feeling at risk of being ripped off. How can that be? The answer is that we trust that others have looked at the prices and that as a result, market forces are at work. In other words, we act as a collective all of the time, and as individuals just some of the time. That is the power of markets and how healthcare should (and can) really work.

Opponents often cite one particular example of where price transparency won’t work in healthcare: emergency services. After all, if any situation defies the logic of “shopping around,” it’s when we have a bullet in our chest, right? Well, not exactly, because if prices were transparent, we wouldn’t have to worry about whether the prices at any particular ER were egregious any more than we have to worry about prices at the local supermarket. If prices were transparent across all participants in the healthcare system, media outlets like Consumer Reports would study them for us. So, too, would university students, journalists, government agencies, and countless others. All we need to know is that prices are transparent enough that if we want to compare prices, we easily can. Many people would. But if they didn’t have time, or simply didn’t want to, they wouldn’t have to. When we recognize the power of the collective, it becomes obvious that that the “shopping around” has been mostly completed before we find ourselves in need of emergency medical services in the first place.

Because I haven’t found any one particular economic theory that perfectly describes the phenomenon of “We, Not Me,” I’ve named it the “Theory of Consumer Proxies.” That is, as consumers, we have many proxies. I have you, and you have me. We have the media, universities, consumer groups, and even governments. We all act as proxies for one another, with the seller never sure who is or is not comparing prices, or when they do it. Buying healthcare should be easy, it shouldn’t be like buying a used car.

“We, Not Me,” is a force in every transparent consumer market. There is no reason that healthcare should be exempt from the influence of the collective consumer, and there’s every reason that it should be. So the next time you hear a politician, or journalist, or healthcare industry executive telling you what people will or will not do with access to real prices in healthcare, just remember that, IT DOESN’T MATTER, because someone else will have already done it for them.

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Just picked up my car from the shop. It was routine service, though I had told them to replace my brakes because I have almost 50,000 miles on the car and I’m sure it’s time. I don’t like to wait just because I might be able to get a few more months on them since I often have trouble finding time to bring my car in. I’d rather get it out of the way.

Yet despite telling them I was willing to spend hundreds of dollars to replace my brakes, they still didn’t replace them. Why not? Because they insisted I have more than enough life on my brakes to make it to and even past the next service. In this particular car, I routinely use the down-shifting capability, so I guess I’ve successfully stretched the life of my brakes far longer than I have before.

What’s the point? The point is that the auto dealer has earned my trust (not the first time). Even though I’d given them permission to take more of my money, they didn’t. I assumed my brakes would be worn and they knew that. They also know with so many miles on the car, and a customer that believes it’s time to replace the brakes, that they’d never be questioned if they replaced them unnecessarily. They still didn’t. That breeds trust.

In medicine, we often hear that things are too complicated for patients to really judge for themselves. But that misses the point. Right now we don’t have a system we can trust in healthcare. While there are many healthcare providers I do trust—my own doctor, our pediatrician, our dentist and our kids’ dentist—there are many more that we don’t. And even when it comes to the providers we trust, I still don’t trust their business practices and billing offices. They are pushed to do things unnecessarily (like taking my blood pressure or temperature before looking at a discolored toenail or referring us to other doctors in their practice group) even if they don’t believe that is truly the best course of action.

Establishing a healthcare marketplace that we trust is the ultimate goal of transparent pricing. There are other steps that are necessary to accomplish this, but don’t let the healthcare industry fool you by trying to pick apart the way patients will, or will not, use the information they are given. The healthcare lobby would certainly like to convince policymakers that patients won’t really use pricing information, because “it is confusing” or because “healthcare is different.” It is not different.

When I was picking up my car, in addition to an itemized bill (something I was given without having to request it), I also received a copy of the mechanics’ checklist with more than 25 things that they checked on my car and measurements of my brakes and my tire tread. I didn’t have to ask for this, either, and I can tell you that many drivers don’t know what HVAC stands for, when their drive belt should be replaced, or what struts are. It doesn’t seem to confuse them.

When we trust that a market works, we don’t have to scrutinize the price of each and every thing we buy. We have to spot check. We have to have confidence that a small percentage of others have checked. We want to know that consumer websites or the media would call out abuses.

We Americans want a healthcare system we can trust—one in which preventive medical care is as simple as preventive auto care, in which care for an injury is just like care for a banged-up car. It is more than possible—it is essential. Healthcare is only different because we allow it to be. We let an entrenched industry that is profiting from that myth continue to obscure information, to drive prices far higher than they should be, to generate profits that border on obscene, and to engage in the financial abuse of the least fortunate among us.

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You’ve probably never thought about it. Hopefully you will now. Here is a PDF report just out from the Colorado Hospital Association. It is the worst imaginable job of trying to pass lobbying off as research or policy. Why do we allow a report like this to be written in the name of a non-profit? The report is nothing more than an exercise in creative writing, timed for the start of the legislative session, designed to distract legislators from the truth and to get them to “study” the problem instead of solving it.

The executive summary begins with the history of germ theory and how the transmission of disease was once misunderstood, suggesting that today we misunderstand the drivers of costs in healthcare and, by implication, we should do nothing other than study it. “Studying” a problem is one of the go-to strategies of lobbies.

Lacking any foundation, the report suggests the questions we should be asking — instead of the questions we actually ask. Here’s their list of what we should be looking at (what’s missing comes after):

1. Colorado’s high cost of living significantly drives health care costs up. 
   
   
2. Something in addition to health care costs is driving insurance premium rates in Colorado. High insurance premiums do not directly correlate with hospital overhead costs, nor with health care expenditures.
   
   
3. Coloradans’ spending on health care and insurance premiums is lower – and growing slower – than the rest of the United States.
   
   
4. Hospital spending is the largest expense “bucket” and it should be. Hospitals care for people when they are the sickest and most other care is provided in other, less expensive places. 
   
   
5. What Colorado hospitals pay for workers, services and equipment is 6th highest in the nation. These expenses are also influenced by Colorado’s high cost of living. Further analysis is required to understand why Colorado’s proportion of non-medical costs is high. 
   
   
6. Communities small and large need their hospitals to be there when they need care, especially when there’s a large-scale event, like a flu outbreak or natural disaster. Hospitals have to plan for those terrible events, and as Colorado’s population grows, hospitals will grow, too. Many Colorado hospitals reported operating at full capacity on multiple occasions in 2018.

What’s missing? Glad you asked. Here’s my list:

1. Hospitals buying up physician practices then jacking up the price, adding facilities fees, and nickel and diming patients to pad the bills even further.
   
   
2. An increasing lack of competition as the little guys are squeezed out (monopolies, by any other name).
   
   
3. Collusion between hospitals and insurance carriers.
   
   
4. Group Purchasing Organizations.
   
   
5. Fast-rising pharmaceutical and medical device prices.
   
   
6. Executive salaries and bonuses at what are supposed to be non-profit hospitals.
   
   
7. Growing hospital profitability (yes, they are making ever-more money).
   
   
8. And — you guessed it, A COMPLETE LACK OF PRICE TRANSPARENCY that would empower consumers and the broader marketplace to demand efficiency, balance supply and demand, and drive down costs.

Had the CHA done a good job and been even remotely honest, they could have included the six areas they suggested be studied to try and dilute these real reasons. But failure to include ANY of the real drivers of the out-of-control cost of hospital services is such a blatantly obvious (and stupid) strategy that we can only pray it backfires. 

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Happy New Year! I’ve been lying low for the past six months — ever since we had to withdraw the Colorado Ballot Measure due to the success of the healthcare industry’s misinformation campaign. But don’t think that means we’ve not been continuing to press forward. We have. While I can’t share the details of what we’re doing at Broken Healthcare just yet, I can tell you that it’s going to be a very big year for change on the healthcare front.

First, there are two new books that I strongly recommend if you are interested in coming up to speed on how American healthcare really works (and why it doesn’t). The first has been out a few months now and it’s a pretty heady read at over 500 pages, but the authors from the Cato Institute did a fantastic job of truly revealing how the system works in Overcharged. As one friend put it, “it’s time to invoke the RICO statute.” After reading this book, you’ll become convinced that America’s healthcare system resembles organized crime in many ways. Real organized crime is not always like what you see in the movies. Many of the people that work for organized crime syndicates are not really criminals themselves. The same is true in healthcare. It’s the few “mob bosses” that really make the system work the way it does. They are the ones that need to be stopped by policy makers.

The second book is titled The Price We Pay, which won’t be out until April. It’s written by my friend Dr. Marty Makary, a surgeon and professor of public health at Johns Hopkins. Marty’s writing style is very easy to follow and he does an amazing job of revealing much of what goes on behind the scenes in healthcare. Marty was a go-to guy for the Obama Administration and continues to be called upon for his expertise by the current administration. He is a true maverick and his book is at the very top of my list of recommendations.

Marty also appears in a movie I highly recommend. Netflix aired a feature-length movie focused specifically on medical devices and the corrupted system of medical device approval. It’s very well done and I suspect there are many more like it in the works. You can find The Bleeding Edge on Netflix.

Besides these exposés, there are many other signs that this will be a momentous year in healthcare. The press has been feeling emboldened to call out abuses. The Wall Street Journal has done quite a bit of excellent reporting lately. VOX runs outstanding and insightful stories. And many local journalists are exposing what goes on in their community.

New rules and regulations have started to stream from the federal government as well and I suspect that we are all going to benefit from Democrats and Republicans battling to see who can fix healthcare faster. Of course, they could also stand in the way of each other, but I suspect healthcare might be one thing they can come together on if they take the right approach. Time will tell.

So really just writing to let you know that the fight is far from over. There’s a new legislative session starting in Colorado, lots of activity at the Federal level, and the fourth estate is finally starting to do its job on the subject.

I’ll share more detail in the weeks to come.

Change is in the air.

Happy New Year!

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With a very heavy heart, I announce the death of Colorado Initiative 146: Healthcare Price Transparency.

It could have been. We were on track to complete the signature campaign, but fake news killed it. Let me explain.

The initiative’s death blow was dealt at Colorado’s Democratic Party Central Committee Meeting in which the party voted down a request from Senator Matt Jones to endorse it. The endorsement itself was artfully crafted by Morgan Carroll, Party Chair. The party voted to “take no position”—foretelling its death. Without a Democratic Party endorsement, and with the opposition able to say they voted against endorsing it, it cannot pass in November.

What Happened?
Last week, Democrats surveyed their members. The results suggested an expected unanimous vote in favor of the initiative: 22 members for, zero against, five with questions. The vote was scheduled for Saturday, July 14th. And with that information, the healthcare industry mobilized, using Planned Parenthood and the ACLU to lobby party members. Lobbyists fed information to key Democrats—inflammatory, false, intentionally misleading information—and it spread.

The message sent Friday morning to Democratic Central Committee Members is here (it’s too long to include in this message, but I encourage you to read it). It was posted on Facebook by El Paso County Party Chair Electra Johnson. She knows now this was a mistake and has since removed the post, which should be a strong sign that she doesn’t stand behind it. She has also told me she intended to vote in favor of the ballot measure. But I suppose she doesn’t deserve too much credit for her mea culpa. I don’t believe she’s posted anything about why she removed the post and she also passed on the opportunity to get up and say something at the Committee hearing when members were invited to do so. She could have made the entire difference, but she chose not to. The damage had been done.

By midday Friday, with poison in the water, Matt considered pulling his request for the endorsement. But, understanding how important the measure was for Colorado citizens, he and Morgan stood strong. Why party members chose to trust Planned Parenthood and the ACLU more than Matt and Morgan I will never know, but I applaud them both for not taking the easy way out. I hope they have no regrets. They did the right thing—something we can’t say about many others.

Death by Friendly Fire
Democrats were used and should be outraged. They also need to accept culpability. Had an organization like the NRA done this, Democrats would be livid, speaking of dirty politics and the influence of big business. Will they be silent here, though, since the offenders are traditional Democratic Party partners? Or will they realize their party has been equally corrupted?

Planned Parenthood and the ACLU did the bidding of the healthcare industry. That’s right. Just as the NRA spends 10% of its energy advocating for the 2nd Amendment that it truly believes in, while the rest of its business is power brokering, the same goes for Planned Parenthood and the ACLU. Do we excuse such behavior because these organizations are also capable of doing good work? If we do not demand they replace their boards and executive leadership and turnover a new leaf, then we are accepting their continued distortion of our democracy. Democrats, this one is up to you. Are you going to hold anyone accountable for intentionally misleading you and condemning the American people to living with its current healthcare system?

Trust?
Trust is the operative word. Electra Johnson trusted Jack Teter, Planned Parenthood’s Colorado Political Director. If it were anywhere else in her life, I’d be willing to bet it would spell the end of a relationship. Will she forgive Jack in the interest of politics? Will she remain silent? Or will she become an advocate for the truth? Only time will tell. I took her at her word that she was duped. When we spoke this weekend at the Elizabeth High School meeting place, she told me she had read the measure six times since and didn’t find any of the problems she had written about. She said she intended to vote in favor of the endorsement. In the end, 54 people did vote in favor, but it wasn’t enough to pass.

Ms. Johnson wasn’t the only one who misplaced their trust. The ACLU was apparently making phone calls to Committee members who had placed their trust in the ACLU. I hope they all learned something and that members are inspired to simply not vote in the future if they do not feel qualified to assess something themselves. Having not read the initiative, but having had it “explained” to them by “trustworthy” special interest groups, Democrats voted against it after five minutes of debate and sealed its fate.

In politics, trust is among the most easily violated and quickly abused of all human qualities. Will Democrats punish those who lied to them? I doubt it. If I suggested that Coloradans stop contributing to Planned Parenthood until they change their ways, people would accuse me of being a threat to women’s reproductive rights. People will tell themselves that donating to Planned Parenthood isn’t about politics, continuing the erosion of democracy.

Representative Chris Kennedy was the voice of the opposition. Chris knows the truth. Months ago, he had offered to replace Representative Mike Foote as the sponsor of the legislative version of the bill had Mike be chosen to replace recently resigned Boulder Country DA Stan Garnett. Kennedy spoke against the measure this weekend and personally signed its death warrant by pointing out that six Democratic women had voted against it in the legislature. He didn’t mention that they had been duped in the same way. I’m not sure if the Democrats will post a recording of the meeting. If not, I have one and will get it up shortly. What Mr. Kennedy has done to his own party may not stop him from election in 2018 now that the primaries are over. But the phrase, “Remember 146,” will haunt any future election for Mr. Kennedy. I’m confident he won’t survive another primary. His position and remarks will live on.

Note: please do not confuse Chris Kennedy of House District 23 with the other Chris Kennedy running for State Senate. Do your homework. Punish the right man.

The vote was lost 77 to 54. The healthcare industry was smart. The timing had been carefully planned. It waited until Friday morning to spread misleading information. If we had been given another day to counter the lies, I’m confident it would have passed. But there was no time.

I let Democrats know that the initiative would be dead if they failed to support it. Following the vote, we pulled the plug and sent home circulators from offices all around the state. Tens of thousands of petitions will be destroyed, along with the hopes and dreams of the many volunteers and donors. I do not believe the magnitude of opportunity that was squandered will be understood for several years. Remember 146 every time you open a medical bill that you don’t understand.

Without a Democratic party endorsement, the lies in Ms. Johnson’s Facebook post foreshadowed the Fall media campaign to be funded by the Colorado Hospital Association, the pharmaceutical lobby, and the insurance industry. I’m told $30 million had been committed thus far to convincing Colorado citizens that healthcare price transparency is a bad thing. The failure of Democrats to affirmatively support the measure means the public will listen to that message. Only Democrats could have told that portion of the electorate that these are lies, but this weekend they declined to do so.

To fight back without a Democratic endorsement would have meant going dollar-for-dollar in the media battle. With an endorsement, we would have been able to spend a tenth of that money. A simple message from Democrats would have assured Democratic voters that the opposition’s ads were lies, but they weren’t prepared to do that and we simply can’t afford to continue without their endorsement.

While Republicans were going to be needed to help the public understand that price transparency would lead prices to go down, not up, and that transparency was pro-business, not anti-business, Democrats held the power on the other side of the message—that price transparency is patient protection. They were made to believe the opposite, however, and many were pretty easily convinced that somehow price transparency is a threat. Rep. Chris Kennedy became the spokesman. He was clearly on a mission, despite knowing the facts. He’ll now have no choice but to stand by his position now and the debate will continue. Whenever Chris is prepared for a public debate on the issue, I will be glad to meet him. He won’t do it. It is the ugliest part of politics when organizations like Planned Parenthood and the ACLU, and someone the people trust such as Chris Kennedy, sell their soul.

Remember 146.

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“We can’t get to the $4 trillion in savings that we need by just cutting the 12 percent of the budget that pays for things like medical research and education funding and food inspectors and the weather service. And we can’t just do it by making seniors pay more for Medicare.”
-Barack Obama

“The curious thing is Americans don’t mind individual mandates when they come in the form of payroll taxes to buy mandatory public insurance. In fact, that’s the system we call Social Security and Medicare, and both are so popular politicians dare not touch them.”
-Robert Reich

“I believe keeping our promises should be our highest priority and that means saving Social Security and Medicare while preserving the American dream for our children and grandchildren.”
-Tom Coburn

“We know that Medicare’s going broke in seven years, but we need to start over. That’s what the American people want us to do.”
-John McCain

Medicare Will Never Run Out of Money
Not long ago, I wrote about the fact that the U.S. Government’s own forecasts predict a time when the Medicare Trust Fund will be depleted, leading to either large increases in taxes, significant reductions in benefits, or both. Following that message, a friend wrote to me, “Dave, why are you being such an alarmist? We’ve been hearing about things like Social Security and Medicare running out of money since Reagan was President.”

And you know what…my friend is right. Actually, the alarm bells were ringing just a couple of years after Medicare became law. But the truth is that Medicare will never run out of money—you and
I will pay for it, one way or another.

I asked one of my interns to plot a different chart for me. He went all the way back to the earliest days of projections for the Medicare Trust Fund D-Day (depletion-day) and plotted the time remaining by year. Turns out, my friend was right, it has been an up and down kind of picture. I needed to understand why. As it turns out, a few of the same recurring things account for the variability:

1. During times of economic growth, we increase revenue projections, without believing they’ll come down. They always do.
2. We raise taxes.
3. We cut payments.

Interestingly, back in the late 90s it seems that we cut too deep and reversed the pressure on prices by deciding to pay physicians more. That should be a present-day warning to us. The system is capable of resisting government pressure on prices. That, in turn, should remind us that the only true system capable of driving down prices is market forces, not government proclamations.

Looking at this year’s projections, we see a steady decline in the balance of the Trust Fund, which comes at a time of:

The projection is for the Medicare Trust Fund’s depletion-day is just 8 years away.


Now, like I said in the title, Medicare will never actually run out of money—because it never really had any to begin with. The Medicare Trust Fund is merely an accounting concept. One way or another, the Federal Government will fund Medicare, though it will take an Act of Congress to do so. That Act can only do one of a few things:

1. Raise taxes
2. Cut benefits
3. Borrow money

That’s it. Those are the three choices. We’ve already seen that the Federal Government is not capable of actually driving prices down, though I’m sure we will continue to hear that it is. If you think there’s partisanship and stagnation in Washington right now, just wait until decisions have to be made about how to keep Medicare benefits flowing. If Democrats are in power, you can bet that we’ll see big increases in taxes and, very likely, some version of universal healthcare (ObamaCare on steroids). And if Republicans are in power, you can bet we’ll see big cuts to benefits, and likely a lot of borrowing (while Republicans claim to be fiscally conservative, that really only means that they don’t want to raise taxes. They seem to have no problem borrowing money when they are in power).

Or, we can do something about it. We can force transparent pricing that creates competition and allows the marketplace to drive down prices. These are the choices. There are no others. The time has come to act. Please join us.

“We need real leadership, Democrat, Republican and independent to stand up and say, we have to live within our means.”
-Tom Coburn

“The largest party in America, by the way, is neither the Democrats nor the Republicans. It’s the party of non-voters.”
-Robert Reich

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Here is a story that flies directly in the face of a common, albeit laughable, suggestion that “if people saw the prices of emergency services, they might not seek care when needed.”

While laughable, it’s one that is repeated often by hospitals with absolutely no evidence to back it up. It’s a “theory” that, along with a lack of price transparency, confuses the issues. In the story, a Boston woman tries to reject an ambulance out of fear of the price, even though she had no idea what that price would be.

Both situations (knowing the exorbitant price and not knowing anything about the price) actually miss the point. And that IS the point. When we only look at things surface deep, we often have the wrong conversation about why things need to change.

In the case of the Boston incident, it’s not a question of whether we do or do not know the price of an ambulance. The real point is that if the price was publicly known, we wouldn’t be charged irrational prices for ambulances and emergency services and thus there would be nothing to fear in the first place. If prices were known, they wouldn’t be irrationally high for long. And, given just a little bit of time, prices would actually come down—not rise—year after year. That prices will come down is not merely a theory, it’s a fact—evidenced by 250 years of experience with a little known American concept called “the free market.”

You can call the long-term effect on prices a second-order effect if you like. Knowing the price we’ll pay today is the first-order effect and it’s one very small reason why we need transparent prices in healthcare. The long-term effects—second- and third-order effects—will be much more significant.

Yesterday was Independence Day. So let’s celebrate American independence by reflecting on what works in America to keep us independent—free market competition that drives down prices by increasing competition. And while we’re at it, let’s reflect on a second American principle: standing up for the little guy. In America, those who are most affected by exorbitant and ever-rising healthcare prices are those who can least afford the cost and who have the least power to do anything about it.

If you are out and about over the next few days, look for the red shirts that say “Healthcare Price Transparency” on the front, and #trust on the back. We’re in the home stretch.

Thanks for your support!

David

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Well done to the jury, the patient, and the attorneys who took on a Colorado hospital and won. You can read here about how (and why) Lisa French fought back against Centura’s attempt to collect $229,000 based on their fictitious chargemaster prices. That any hospital would sue a patient for that money—already deemed unreasonable by the patient’s insurance carrier and every other source of information available, not to mention common sense—is shameful. Hospitals like Centura should have their non-profit status revoked. What, exactly, is it that they do for the community to warrant their tax-free status? Let’s hope Colorado’s next Attorney General makes this a priority.

Perhaps the more important story, however, is the one that’s not here—which is why such an important story is not being covered by the Colorado media. It seems the media is as scared of the healthcare industry as everyone else. Can print media survive without hospital, insurance company, and pharmaceutical advertisers? The healthcare industry has all but shut down the media. The occasional story by 9News’s Chris Vanderveen is about all we see. If the healthcare industry can shut down the local media, where does that leave us?

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All over the country, teachers have been protesting due to inadequate pay. And all over the country, candidates for office—those running for governor, in particular—have been promising salary increases for teachers. Don’t believe them. Most politicians will tell teachers whatever they want to hear in order to win their vote.

Now don’t get me wrong, many candidates are sincere—sort of. What I mean by that is that they’d like to see teachers paid better and they will advocate for them, but it’s not up to governors to honor such promises. In the end, it’s up to legislators and voters. Pay raises for teachers, after all, have to be paid for with taxes.

If we really want to pay teachers more on an ongoing basis, we have to solve the root cause of the problem. If we don’t, teachers are going to be protesting the inaction of feckless politicians again next year. And even if teachers win raises, we’ll be having this discussion again just a few years later as the root cause of the problem will not have been solved.

The problem is not that we don’t value our teachers. I certainly do. Most people I know do. The root cause is the incredible transfer of well over $1 trillion a year to the healthcare industry. It’s a wealth transfer unprecedented in history and it happens every year. One trillion dollars is the low end for estimates of waste and excessive profiteering by monopolistic hospitals, insurance carriers, and pharmaceutical companies. One trillion dollars is also how much we spend on K-12 public school education. Imagine that.

And it’s not just teachers who are affected. State and local government treasuries are being drained by healthcare expenses at an alarming rate, affecting firefighters, police officers, sanitation workers, transportation departments, and just about every other public service we depend on.

While state and local government employees are experiencing a sharp decline in the value of their healthcare benefits due to higher premiums, copays, deductibles, and the obscenely high prices they pay for medical care, the value of health insurance industry stocks has risen five-fold over the past ten years. Hospitals are also making good money. According to a 2018 report to Congress, hospital profit margins are at a thirty-year high.

Believe me, if all we do is raise teachers’ salaries, the healthcare industry will find a way to take it away from them. That doesn’t mean we shouldn’t do it—teachers deserve a raise—but we cannot ignore the broader problem. If we do, all we’re doing is kicking the can down the road.

When teachers complain about their healthcare benefits, they’re addressing only a tiny part of the problem. The bigger impact is the cost of providing healthcare benefits to all of the other local and state workers. As healthcare costs rise, spending on other services—including education—must necessarily fall. That includes teachers’ salaries. In half of Colorado’s schools, kids are only getting four days of education a week because of budget cuts, and the graduation requirements are so light that many can easily graduate in three or three and a half years. It’s ultimately the kids who are suffering.

The great transfer of wealth from the private sector and local government to the healthcare industry is the ultimate cause of low teacher salaries. I hope teachers will join me in solving this problem. We can do it—for Colorado and for the whole country—by ensuring that Colorado Initiative #146 makes it to the ballot in November. The Colorado ballot measure is the first of its kind in the nation, requiring complete price transparency and thus ensuring competitive prices that will drive down costs and protect us from the price gouging that goes on every day.

It’s an arduous process to get a law on the ballot in Colorado. It takes ten times as many signatures as getting on the ballot to run for governor. If every teacher across America will donate $5 for each of their family members, we will get it done. When we do, transparent pricing and competition will follow. And that is the key to freeing up the money to pay teachers better. We’ve raised $158,725 over the past three weeks. We need another $41,175 to hit our requirement of $200,000 for the month to keep our signature collectors out there. Please consider making a small donation to help us get there. We’re doing this for every American—and most importantly, for our children.