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. 



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!


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 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.

“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:

  • Sustained economic recovery/growth, which should put income tax revenues near a peak (the recent tax cuts are included in the projection).
  • Near 100% employment, which means payroll taxes do not have room to grow beyond projections (payroll taxes fund Medicare).
  • Increased revenues from the ACA’s increased payroll taxes.

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


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!


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?

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.

In early May, Secretary of Health and Human Services, Alex Azar, was delivering a speech to the Federation of American Hospitals. He had these simple words to share:
“Imagine a day when healthcare delivery in the United States functions the way other parts of our economy do. We as patients would pick providers with the level of information we have when using Amazon or Yelp. Consumers would drive quality and cost-effectiveness with information, competition and genuine choice.”

Soon after, former U.S. Senator Tom Coburn, a longtime champion of sensible, market-driven healthcare reform, shared his thoughts on what we are trying to do here in Colorado.
“The Secretary’s key word is ‘function.’ Right now, at 18% of GDP and expanding, our healthcare system is entirely dysfunctional. A measure making its way toward the November ballot in Colorado is the first and only active effort in the nation that truly addresses this. That’s why every American should support the people of Colorado right now.”

Secretary Azar continued during his May speech with the following:
“Some argue healthcare is simply different and is and should be immune from market forces. I simply disagree. Real competition — in the economic sense — has never really been fully tried in our bizarre, third-party payer system.”

And I just came across this report in the American Journal of Medicine. The study repeats a study that was done in 2016, using a common medical procedure (hip replacement, formerly referred to as Total Hip Arthroplasty, or THA) as a proxy for transparent pricing. They looked at the period 2012 through 2016. Here is its conclusion:
“We found no evidence of improvement in hospitals’ ability to provide estimates on reductions in the estimated price for THA between 2012 and 2016. Our results provide sobering evidence that substantial efforts from government and industry to improve price transparency have had little tangible effect on availability of prices.”

In fact, the study suggests we’ve gone backwards.

The study itself is an illustration of why our system is so broken. While the data is credible, the academic-speak that stands between it and real change is palpable. I also find words in the study’s discussion naïve when it cites, “…substantial efforts from government and industry to improve pricing transparency have had little tangible effect on availability of prices.” Really? Substantial effort? While the study’s authors rely on data to conclude no progress has been made, I have to wonder what data led them to believe there had been “substantial effort.” The truth is that numbers don’t lie, and the lack of progress clearly tells us that there’s been no serious effort, just five years (the time between studies) of excessive profit-taking on the basis of price obfuscation and collusion.

We often talk about the waste in healthcare—waste due to unnecessary tests and procedures, redundant testing, and a highly corrupt and inefficient system of claims management. Perhaps it’s time to start talking about the reciprocal of waste: excessive, uneconomically earned profit. You see, that trillion-plus dollars a year we waste has to go somewhere, and much of it goes to the bottom line of monopolistic healthcare giants. One man’s waste is another’s profit. The Affordable Care Act (aka Obamacare) is a case in point. One of the many unintended consequences of Obamacare has been the transfer of great wealth from patients and tax payers (which is really one and the same) to the healthcare industry. States were promised that coverage for more people would mean increased patient volumes, thus driving down costs (as happens in every other industry). Yet the opposite has happened. Prices have gone up—and taxpayers are paying for it. How can that be? Easy—without competition, there’s no linkage between volume and cost.

The ineffectiveness of government, and legislatures, leaves us no choice. The people have to take charge. That’s why we need your support.

Last week, Senator Coburn helped us raise over $100,000 from outside the state in a single day. That’s terrific, but it’s also a concern. As the Senator said, “Every American should be supporting the people of Colorado right now.” If you live in Colorado, please help me ensure the rest of the country knows, “we’re in.” And if you don’t live in Colorado, please consider supporting us anyway. What we are doing in Colorado is for every American.

I’ll close with one last excerpt from Secretary Azar’s speech:
“Simply put, our current system may be working for many. But it’s not working for patients and it’s not working for the taxpayer.”

If you read between the lines, “the many” does not refer to many Americans. It refers to many healthcare industry giants.

If you have not yet contributed to Broken Healthcare, no matter where you live, please consider making a small contribution right now.

And if you have donated before, please consider making another contribution. This is America, and for better or worse, nothing changes without money behind it.

Thank you for your support.

Healthcare prices in the U. S. are growing twice as fast as you think. To understand this phenomenon, which should convince everyone that tackling healthcare prices must be the Trump Administration’s top domestic priority, consider the following:

The United spends double, on a per capita basis, what other similarly developed countries spend on healthcare, while getting lesser healthcare outcomes. We do not visit the doctor more often. We visit less—far less. In fact, in the United States on average, we visit the doctor 40% less often than the average across all OECD nations. That means we are spending twice as much money to see doctors 40% less often. Now, you might think that’s because we’re healthier, but we’re not. As it happens, the United States has seen improvements in life expectancy come to halt over the past two years. It’s the first time in 50 years that a drop in life expectancy has been recorded two years in a row. Growing healthcare prices also cannot be explained by more drugs or more surgical procedures. According to the Health Care Cost Institute, almost all of the growth in healthcare spending can be attributed to one thing—rising prices. And when prices are rising faster than the rate of inflation, the money is going somewhere—mostly to profits that are not rewards for providing more or better service. That, in turn, explains why the stock prices of health insurance carriers are up twice as much as the stock market (which is up over 100% itself since the implementation of the ACA).

So, back to the original point—why healthcare spending is rising twice as fast as you think. Consider that we spend, on average, about $10,000 on healthcare for every man, woman and child in the United States each year (it’s actually a little more, but $10,000 makes the math easy). Right now healthcare spending is rising at two to three times the rate of inflation. But for arguments sake, let’s just assume it’s double and call that 4% (inflation was 1.9% in Q1 2018). That means we should expect healthcare spending to rise $400 per American each year. However, that $400 is calculated by multiplying the inflation rate by the prior year’s spending ($10,000 in this example). If we were only spending $5,000 per capita, then the annual increase would by 4% x $5,000 = $200.

That’s why even restraining the growth of healthcare spending to the rate of inflation is allowing it to grow faster than it should—twice as fast, in fact ($400 per person as opposed to $200 per person).

Over the coming decades, we have to drive prices down, not just keep them flat, because growth at the inflation rate will ensure we perpetually have a healthcare system that consumes twice the economic resources that it otherwise should.

The oversized cost basis of our healthcare system is why I’m calling for a target growth rate of zero. Even at that rate, it will take decades for prices to come down to where they should be. For now, let’s call a zero growth rate about 2% slower than the inflation rate, and 4-6% slower than the healthcare inflation rate. If we can do that, we return approximately $200 billion per year to the U.S. economy for investment in other things such as infrastructure, education, and the growth of small businesses.

$200 billion in economic stimulus—every year—is bigger than any tax cut. That’s $2 trillion over the next decade. And when you consider that government pays half the healthcare bill in this country, a concerted effort to drive down healthcare prices effectively pays for the recently enacted tax cuts. There is no greater gift that Trump and Republicans can give to Americans than attacking healthcare spending. Democrats should join them.

But…it has to be done right. Squeezing prices by simply lowering Medicare reimbursement or reducing the money states have for Medicare is not the answer. The answer is ensuring that competitive market forces drive prices down by improving service while encouraging innovation and efficiency. That way we don’t short change the healthcare people are receiving. When we cut Medicare and Medicaid prices, two things tend to happen. First, seniors and those most in need of our help have a tougher time getting the access to the healthcare they need. Second, an ever-greater share of costs is passed on to the private sector. Cutting spending doesn’t really save money in the long term. Only by allowing competitive forces to drive down prices can we ensure it’s done efficiently and effectively.

So please, help support our effort to ensure real price transparency that empowers consumers and the market to do what needs to be done. Please consider making a donation to the Broken Healthcare Action Fund today. We need $20,000 by the end of the week to keep the signature collection going. We have until the first week of August to get all of the signatures necessary to make sure Coloradans have the right to vote on price transparency in November, setting an example for the rest of the nation. We’re in the homestretch, but we need your help.

Note: If you are new to Broken Healthcare or just want to catch up, we’ve put together this page with the best and most useful reading all summarized in one place.

First, an update. This weekend saw the launch of the second phase of signature collection for Colorado Initiative 146. Phase one started with volunteers and a small team. Over the past few weeks, we’ve been ramping up and this weekend, we had dozens of new people all over the Denver metro area at big events like the Bolder Boulder.

With dozens of paid signature collectors out there, the costs are piling up fast. If this is an effort you believe in and you expect to benefit from yourself, please consider making an investment now to ensure we get it done (hint: everyone benefits from lower healthcare costs).

“Until the great mass of the people shall be filled with the sense of responsibility for each other’s welfare, social justice can never be attained.”
-Helen Keller

“Every social justice movement that I know of has come out of people sitting in small groups, telling their life stories, and discovering that other people have shared similar experiences.”
-Gloria Steinem

“Throughout history, it has been the inaction of those who could have acted; the indifference of those who should have known better; the silence of the voice of justice when it mattered most; that has made it possible for evil to triumph.”
-Haile Selassie

“The hardest thing to explain is the glaringly evident which everybody had decided not to see.”
-Ayn Rand


Bundling? Fragmentation? These are words that most of us don’t use every day. Yet the healthcare industry uses them all the time—very strategically—to maximize profits at our expense.

Bundles are easy to understand. When you order a number six at McDonalds, you pay a bundled price. If you order a cheeseburger, a drink, and fries separately, you expect the teller to say to you, “Would you prefer the meal, ma’am? It’s a better price.” Or better yet, you just expect them to do it for you. And the last thing you expect them to do, when you order a number six, is to “unbundle” it and charge you separately for the burger, soda, and fries in order to charge you a little more. Yet this is what healthcare providers—hospitals in particular—do to unsuspecting patients. The result, however, is not a little more. In healthcare, it can be a lot more.

Good businesses empower their employees to help customers get the best price on their goods and services. But then again, good businesses don’t generally give people titles like, “Revenue Enhancement Specialist.” (seriously—that’s the title on a letter I received from a hospital).

In healthcare, unbundling, sometimes called “fragmentation,” is used as a revenue optimization strategy. For example, you might be charged for five different blood tests, each having their own CPT code, when there was another CPT code that could have been used for a “liver panel” at a lower cost. CPT stands for Common Procedural Terminology. CPT is the system of medical coding used by healthcare providers.

While intentionally unbundling codes can be used to maximize revenue from self-paying patients and private insurance patients, it goes by another name when billing Medicare: fraud. There are ways around that even with Medicare. But unbundling and “up-coding” (using the coding system as a weapon, carefully choosing codes to minimize the likelihood of procedures being bundled) most often affects privately insured and uninsured patients. 

This is one of the many of examples of our government’s conflict of interest in healthcare. It writes rules to protect itself, while not extending those same protections to the rest of us. And in the process, it creates systems that confuse us, which provides the industry with ever-better weapons to use against us. 

Efforts are underway to change that by making it a condition of payment or participation in federal programs to extend the same protections to us that are enjoyed by government payers. But don’t kid yourself. The special interests are hard at work, sowing confusion, to minimize anything that might impact the bottom line. And, the system is so complex that these schemes still cost government payers a lot, too, even though many providers are being taken to task for fraud every year.

What about insurers? Well, insurance carriers only protect patients or employers when it’s in their best interest. With insurance carriers, if we are not going to hit our increasingly high deductibles this year, it’s not worth much to them to invest in correcting our fragmented bills. It doesn’t save them anything and, when still within your deductible limits, it doesn’t save your employer anything, either. So why fight the higher cost calculations just for us, the patients? 

While I think they have a duty to protect us, acting in the best interest of the patients and employers they represent is not a duty that insurance carriers accept is theirs. They will tell you that they legally have no such duty. That’s something that needs to be changed, and it needs to be tested in the courts.

And when they are bumping against medical loss ratio limits (see Weapons of Mass Corruption, Part II), allowing unbundling helps drive payouts up, thereby maximizing profits.

Most patients and employers are oblivious to the practice of unbundling. At best, they might be able to go online and find an estimated price for a specific CPT code. There is nothing that will tell a patient that the CPT codes on their bill should have been bundled into a single, different code. They’d need to be a medical coding expert for that. By creating a system that requires such expertise, we have enabled unbundling abuse.

The complex nature of medical coding itself is an enabler to all kinds of corruption. Each year, hundreds—sometimes thousands—of codes are added to the system, along with “modifiers,” just to make things a little more complex. 

To protect itself against malicious unbundling, CMS (Centers for Medicare and Medicaid Services) launched a program known as the “Correct Coding Initiative.” Unfortunately, the benefits of this program, again, are strictly for CMS. The Correct Coding Initiative does not extend to the private sector. 

“In the absence of justice, what is sovereignty but organized robbery?” 
-Saint Augustine


The result of unbundling is, often times, that when billing patients at chargemaster prices (see Weapons of Mass Corruption, Part I), not only are the charges inflated by 10x, 20x or more than Medicare or an in-network insurance carrier would be charged, the unbundling results in even more obscene overcharging.

The bottom line: there is tremendous waste, fraud, and abuse in healthcare that is facilitated by complexity and price obfuscation. Anyone that doubts that serious price transparency will bring healthcare costs down hasn’t woken up to how they, and/or their employer, are being scammed every day.

Also telling: you’ll notice that no one is writing about why the corruption I write about is wrong or inaccurate. Instead, they’re scheming about how to defeat us through negative advertising in the fall. A marketing firm has already been hired. The ads are being conceptualized. The challenge they’re facing is what to tell you that would get you (if you live in Colorado) to vote against this measure. Here are the ideas they’re working with, from what I hear:

  1. It will stifle competition and drive costs up.
  2. Insurance carriers will pull out of the state.
  3. It’s a violation of their constitutional rights.
  4. It’s more bureaucracy and more cost for doctors, which will in turn cause your prices to go up.

Oh, and on the last item—they’re torn. That’s doing a smear campaign on me. The risk, or so I hear, is that it could somehow raise my profile instead of squashing me. So they’re not sure yet if they want to go with that strategy. 

So, on top of the games and scams they play with us, they are prepared to lie to us, too. Ask yourself, is that a healthcare system we can #trust? Are these companies we can #trust? I don’t think so. And the only thing that’s going to cure this very sickly beast is to shine a bright light on it. All of it. And in Colorado, that means passing Initiative #146 to set an example for the rest of the country.



Sign Up to Stay Informed