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I know what you’re thinking: How can knowing your out-of-pocket healthcare costs be used as Weapon of Mass Corruption? Read on…

A 2014 article in Modern Healthcare reads, “New CMS policy on releasing doc pay data and ACA provision requiring hospitals to disclose charges may signal full price transparency is inevitable.” The article is worth reading, as are the links in the article.

It’s 2018. In many ways, we’ve taken steps backwards since 2014. The article was optimistic. The reality is, it never happened. Hospitals are still not complying with the ACA and no penalties have been imposed on them. The suggestions this week (about 11 minutes into the video) by HHS Secretary Alex Azar that transparency is coming is refreshing, but we should all be skeptical about the implementation of any such rules. They didn’t happen in 2014 and they’re not likely to happen now. That’s what we have to keep the pressure on. The healthcare industry lobbies hard. It makes “suggestions” to regulators. But ask yourself, who is making suggestions as the representatives of patients and employers? No one.

The healthcare industry has taken control of the conversation and, in many ways, has snowed government officials. When it comes to drug prices, here’s a quote from a VOX article a couple of days ago: “Under Trump, drug companies have undertaken a concerted campaign to shift the discussion about drug prices to a conversation about out-of-pocket costs.”

Knowing our out-of-pocket costs accomplishes nothing. In fact, in many ways, it plays into the drug companies’, hospitals’, and insurance carriers’ games. When it comes to drugs, if all we know is our out-of-pocket cost and not what our insurance carrier is paying, then we are doing nothing to drive costs down by making better decisions. If in one place a drug costs $100 and in another it costs $50, but we only know that we have a $10 co-pay (i.e., “out-of-pocket”) then who is pushing for the $50 price? No one. And thus this game of charades leads to higher prices for us and our employers. Partial transparency equals no transparency. That’s why “out-of-pocket costs” is a Weapon of Mass Corruption.

As this article suggests, we are stuck with “half-measures” and the truth is that partial transparency equals no transparency. Legislative philosophy in this country promotes the idea of incremental steps. But in this case, the healthcare industry is carefully guiding those steps. And in doing so, they are perpetuating the status quo by creating the illusion of progress. The truth is that partial transparency is the same as no transparency, so incrementalism accomplishes nothing.

Imagine going into a supermarket where the price of everything is on display. When you check out, your bill reads, “$146.50.” You turn to the clerk and say, “I’d like an itemized receipt,” so she reprints it. This time it says: Vegetables: $15.98, Fruits: $13.12, Deli: $9.95, Paper Goods: $12.76 and so on. Then you say, “no, no, no…I want a truly itemized receipt.” This time it lists everything out, just the way you’re used to, but at the bottom is says, “after you leave the store, our analysts assess a service charge that will show up on your credit card bill. It is based on the following factors: a) how much time you spent in the store, b) how many things you removed from the shelves and replaced, c) whether you used a basket or shopping cart, d) whether you bagged yourself or we bagged for you, and e) whether or not you took up a parking spot in the parking lot.”

Not knowing if that service charge might be $1 or $100, you realize that knowing the prices of everything else turns out to be relatively useless because over time, the store has been shifting more and more cost into the service charge while bringing down the price of other things — creating the façade of lower prices.

These are the kinds of games played in healthcare. Secrecy enables the system to cheat us and our employers every day. Only complete transparency, without incrementalism or half-measures, will get the job done.

If you live in Colorado, please contribute to the Broken Healthcare Action Fund to help us change the law at the ballot box in November. We are collecting 140,000 signatures and it’s proving to be a very costly process. Volunteers have been great, but they can’t collect the more than 1,000 signatures we need every day.

And if you live outside of Colorado, please contribute to BrokenHealthcare.org where we help patients all over the country fight their bills and raise awareness of the issue of price secrecy. We’ve launched a GoFundMe account which is the easiest way to make a tax-deductible contribution and it’s very easy to share with your friends on Facebook or anywhere else. Even if you’ve given before, we need your help. Just $5 for each family member that ever results in a medical bill makes all the difference in the world. And please…share the GoFundMe campaign on your own social media account.

In the end, we need to build a system we can all #trust. We can only do it with your help.
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As is often the case, we somehow become our own worst enemies. While there are many unethical and immoral things happening in healthcare today, we shouldn’t tarnish the image and reputation of those who simply want to provide good healthcare. As is more often the case than not, systems comprised of good people become corrupted for structural reasons. For example, while I don’t know how any hospital CEO sleeps at night knowing they are billing lower-middle-income Americans at chargemaster rates that are many times the fair value of the services they provide, we have created a system that tells them that doing so is ok (in a later piece, I’ll explain why it is NOT legal and simply has not yet been adequately litigated). These hospital CEOs are not all greedy bastards, though there are exceptions. Instead, they rationalize their immoral actions. They convince themselves that they are being shorted elsewhere and have to make up for the lost revenue. They argue that it is “cost shifting,” albeit shifting costs to those who can least afford it. And of course, when compensation is based on profitability, we also provide them with the incentive to rationalize.

The bigger structural problem is that of our own making, or, better said, our government’s making. Start, for example, with the 1945 McCarran–Ferguson Act that exempts insurance companies from Federal antitrust laws. The law was enacted to allow states to regulate insurance companies, much like public utilities. At the time, the belief was that, “the business of insurance is neither commerce or interstate trade,” and thus the Federal Government had no business regulating it under the interstate commerce clause. Jump about to 2018 and ask yourself if that still applies.

Beyond the anti-trust exemption for insurers, there are the so-called “Safe Harbor” provisions granted to various healthcare group purchasing arrangements, exempting certain parties from laws against accepting kickbacks from suppliers. This is why there are so many games being played across the healthcare supply chain, including medical devices, pharmaceuticals, and basic supplies. Such exemptions were designed to assist benevolent non-profit organizations, but that was never written into the rules. So today, these protections are used as Weapons of Mass Corruption against employers and patients. This Wall Street Journal article, published yesterday, explains it much better than I can.

At the same time, it’s clear that the scream for transparency is increasing. Here is another piece from yesterday in USA Today. I believe many in the healthcare industry think they have avoided change for another year. They defeated a bill in Colorado and are well on their way to doing the same in other states. But the people haven’t been heard yet. In Colorado, we’ll be going to the ballot in November. And the chorus screaming for change is growing across the country. It also seems our new HHS Secretary is also joining in.

I hope you’ll join the fight for a healthcare system we can all trust and that works for all of us. We are collecting signatures at a fast clip, and we’re burning through money to do so. We still need over 100,000 more signatures between now and the first week of August. Please chip in and help ensure we get this done.
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“A lack of transparency results in distrust and a deep sense of insecurity.”
-Dalai Lama

“Secrecy is the linchpin of abuse of power…its enabling force. Transparency is the only real antidote.”
-Glenn Greenwald

“The most important political office is that of the private citizen.”
-U.S. Supreme Court Justice Louis D. Brandeis


What if I told you that you and/or your company, depending on where you get your health insurance, are spending more than $1,500 a year just to have your health insurance claims processed? That’s half a trillion dollars a year just to process health insurance claims. Well I’m telling you, it’s true. We spend about two-thirds of what we spend on our entire defense budget on healthcare administration, not on healthcare. And what do we get for it? The answer is selective information at best and a shroud of secrecy mostly.

The Unnecessary Costs of Insurance

The concept of health insurance in America, the belief that everything we get from the healthcare system must run through an insurance carrier and be scrutinized, is preposterous not to mention wasteful. But it serves a purpose. It creates a layer of secrecy between us and our providers, and in most cases makes it impossible for us to know what is being paid for and why.
Why is every claim reviewed to see if my physician knows what she is doing? When an insurance carrier says, “that was not medically necessary,” they are telling me that they know medicine — and my medical needs — better than my physician. That’s preposterous. It’s not about combating medical fraud. It is about creating an unnecessary layer of administration to facilitate a mass system of corruption. In most cases, I’m paying the bills, either through high deductible plans or because I’m the employer. I don’t want, or need, an insurance company to judge the decisions made between patients and doctors.

The insurance industry’s grasp on the system is a big part of the reason for our high costs. How do they do it?

The answer is that they get healthcare providers — hospitals in particular — to keep prices ridiculously high unless we are running things through an insurance carrier. In “Weapons of Mass Corruption – Part One,” I described how hospitals use their chargemaster to overcharge the most vulnerable members of society — the uninsured or underinsured. Today, I want to explain how that same chargemaster serves insurance carriers.

The Explanation of Benefits Scam

Have you ever received an Explanation of Benefits (EOB) from your insurance carrier that said you saved 50% or 60% or more because of the amazing rates your insurance carrier has negotiated with the provider?

Several years ago, I received an EOB that said I saved 92%. Amazing! What would I do without insurance?

That was the first bill that really caught my attention. It was an ER bill for $12,154.70. But with insurance, I was entitled to a 92% discount, meaning I only owed $980. Having health insurance really pays off, doesn’t it? Do they think we’re fools? Apparently so.

Under our current paradigm, we really do “save” a great deal with insurance, but only because of the collusion with providers — mostly hospitals, laboratories, radiology centers, and other ancillary services. In “Weapons of Mass Corruption – Part Two,” I explained the Medical Loss Ratio and why insurance carriers want net prices — the amount actually paid — to go up. The insurance carriers use the EOB to show us just how high those prices have gotten and just how lucky we are to be receiving such huge discounts. And of course the huge premiums we are paying to receive those discounts are being used to generate hundreds of thousands of meaningless EOBs every day. It’s a scam. The Explanation of Benefits is a Weapon of Mass Corruption, which is being used every day against the U.S. economy.

Ask yourself, “how does any healthcare CEO sleep at night knowing that an uninsured patient is being charged $1,483 for $69.21 worth of services?” Take a look at the image of one of my personal lab bills. This is for the lab work associated with an annual physical. An uninsured patient would be charged 20 times what I am charged. That’s not a guess. I tested it. Last year, when I had my blood drawn, I told the lab I didn’t have insurance. They didn’t say a word to me about the cost (truth be told the woman at the counter probably didn’t know). They just drew the blood and sent me a bill for the full amount — 20 times what I’d be charged with insurance. When I called to check the price, I was offered a financing plan whereby I could pay the full amount over the course of a couple of years. And that is the other part of the scam. People panic, so they quickly accept the finance plan that might be, for example, $50 a month. Even if they only make the first few payments, the lab is making many times what the services were worth. Providers use the offer of a financing plan to get people to sign away their rights. They also use such offers to make legislators and regulators think they are actually working to help patients. They’re not. Again, I don’t know how most hospital CEOs sleep at night knowing what’s being done not only to uninsured, under-insured and out-of-network patients but also to the U.S. economy as prices are pushed ever higher.

How Transparency Would Help

Why isn’t the lab required to post its prices? Transparency would stop these games.

Many that look at the changes our bill and ballot initiative propose say it’s short-sighted. This has been a problem with many special interest groups who do a cursory reading of the law without taking the time to analyze its actual impact and then offer their opinion on it. The most common question I hear is, “what good will the chargemaster do anyone, since so few people pay chargemaster prices?” My answer is simple: if one person is charged such immoral rates, everyone should see the price. And more important, if you look two steps ahead, it’s not hard to imagine what will change. In the case of the lab work, the lab won’t want to post the $1,483 price. So it will change the way it does business. It will figure out how to post a price that’s 20% (or some other rational number) higher than the $69.21 price. Right now all we can do is demand transparency into the system we have. Only once their prices are forced out into the open will providers worry about pricing services fairly.

Transparency is an amazing thing. It’s time for a change. Please get involved. Please call your state legislators. Please contribute at least $10 for every member of your family. And please ask your company to support this effort. Your company is getting hurt almost as badly as you are and its leaders may not even know it.

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During the past 10 months that I have been drafting, driving, and upgrading an important, but disruptive, piece of healthcare, I have been greatly impressed with our state politicians. During the past year, I’ve gotten to see that attributes like thoughtfulness, altruism, and integrity are the norm—not the exception—for Colorado lawmakers. When I share that with people, it always seems to surprise them. But think about it. A state legislator earns $30K a year and isn’t given enough of a budget to keep a 22-year-old kid on the payroll year round. Why do they do it? Certainly not for the money. Power? They work incredibly long hours and have to deal with some pretty absurd things. It’s a fairly thankless job, and when you are one among one hundred, you don’t really have much power.

What has impressed me is our legislators’ desire to do the right thing. I haven’t run across anyone yet that is clearly acting on the behalf of special interests, as so many believe. And politicians clearly know when the special interests are feeding them self-serving messages. They listen—more than I would have the patience to listen—but they listen and then tune things out when appropriate.

Our non-partisan bill, HB18-1358, legislating broad-based, full healthcare price transparency, represents big change, for Colorado and for America. It will upset the status quo. At the same time, it enjoys strong bi-partisan support inside the Capitol and outside the building. And while there are many special interests voicing their opposition, there is no one representing the individual, unaffiliated voter—except for their elected officials. That’s what American is all about. That’s the nature of representative government. And that is what has impressed me the most. Legislators truly strive to represent the individual voter. The Capitol is open to anyone and your elected officials are very accessible. Yet private citizens are not roaming the capitol to talk to their legislators every day. Private citizens are out at work. They’re raising their kids. And for the most part, they don’t have time to compete with the lobbyists for whom whispering in the ears of politicians IS their work. The lobbyists are there, every day, working to shift political points of view away from the greater good and towards special interest groups with deep pockets.

So please, let your politicians hear from you (easy legislature lookup). We have let them know what you think, but it’s better that they hear it directly from you. I started this effort to ensure the real voice of real people wanting real change is heard, because there is no one standing up for the patient—no “special interest” group representing all of us who need healthcare during our lives. I also wanted to ensure real solutions were designed without the undue influence of special interests. The special interests have been heard and many have had good ideas, too. Those good ideas have been incorporated into our bill.

If you’ve never been to the Capitol, it’s a beautiful building and the staff is very helpful. Just ask for directions and you’ll easily find your state Representative and Senator’s office. Some are in buildings on either side of the Capitol. You can just walk into any of these buildings. And if they’re not there, bring a letter to slide under their door. Most have a staff member who will be there as well. Your representatives are thoughtful and they are listening, so let them hear from you.

The time to get loud is now. Please write. Please visit. And please show up for the hearing on Thursday the 26th, late afternoon. I’ll send more specifics as they become available. The legislature still has 200 bills to try to hear in the next two weeks, so their schedule is going to be in flux. And know this: your elected officials really are on your side. That’s what has been so refreshing. Tell them you know that, too! Tell them that you will support them in November (if they are up for reelection). Tell them you won’t let PACs sully what you think by outspending them 100 to 1. Encourage them to do what they believe is right. I believe that if they hear you, they will do just that.

Finally, to help ensure the pressure of the ballot remains real, and that we get this done through the ballot if the legislature fails, please contribute today. We are collecting signatures at a fast pace. They are costing about $1.50 per signature so please simply do the math and decide how many signatures you would like to fund. One for every member of your family? One for each of your employees? We’re having a feature added to the website so you can monitor the signature count in real time as well. I’ll let you know as soon as that is available.

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If this doesn’t motivate business owners and employers to invest in this cause, I don’t know what will.

In WMCs — Part One, I described an ongoing type of system collusion between insurers and hospitals that characterizes our healthcare system. The result is a deception that most employers and patients don’t even recognize. But hospitals raising their base prices to give insurers bigger “discounts” is only a tiny piece of a much bigger system of financial gamesmanship, which weakens our healthcare system every day. The Weapon of Mass Corruption I would like to detail today is the way insurers can work around caps to the “medical loss ratio” (MLR) to increase both payouts and profits. As usual, the bottom line is increased prices.

An extreme example of this was revealed about six months ago by Chris Vanderveen, an investigative reporter for 9News. He reported a story that has become known as “The $169,600 Check.” A patient named Debra Altman had back surgery, which was mostly covered by her husband’s United Healthcare insurance policy. A year after surgery, long after the related claims had been processed, the Altmans received a $169,600 check from UHC. Almost immediately thereafter, they received a bill from a company, BHLH LLC., for the very same amount. That’s when the Altmans reached out to Chris Vanderveen, who does an ongoing series on outrageous medical bills. The Altmans were obviously not worried about their out-of-pocket costs. But $169,600 is a great deal of money and they were worried about turning it over to a company they had never heard of.

Chris did some investigating and learned that the “neuromonitoring service” for which the Altmans were being billed, and for which UHC was happy to pay, should cost at most $5000 – that Medicare would pay only $2000. I decided to do some investigating for myself.

I thought the deeper story should have been about why United Healthcare paid $169,600 for what, by most estimates, should have been $2,000 to $5,000 at most. I thought the reason United paid the bill — even though they could have told the neurology firm that they were crazy, they were getting $5,000, and they should take it or leave it — had to do with the MLR.

In the most simple terms, the MLR is simply the quotient of claims divided by premiums for an insurance company (the actual formula is slightly more complicated). Under the Affordable Care Act (aka ObamaCare), the MLR is capped at 85% for large insurance carriers. The idea is that at least 85% must go to claims, not profit. It was an awful concept that completely corrupted the typical incentives for businesses in a competitive system.

Under the 15% MLR cap, the problem is that driving down claims could cause the MLR to dip below 85%. In that case, they’d have to reduce premiums or even refund premiums to their customers. This perverted cap makes it so that insurance carriers actually want to see claims go up, not down, since their profits are really a function of the magnitude of claims.

Debra’s husband, Dave Altman, works for a $50 billion company, and the company runs a self-funded insurance plan. That means it wasn’t really United paying the $169,600 — all they were doing was making a decision on behalf of the employer. Keeping the MLR up allows them to essentially pocket 15% (100% – 85%), netting United about $25,000. Pretty unethical, don’t you think? And the employer doesn’t even know it. But if agreeing to pay out $167K more than was necessary to pocket $25K wasn’t bad enough, just wait until you learn what was really going on.

In its contracts with employers, insurance carriers essentially say, “look, sometimes your employees go out of network. We try to help them avoid that, and you should too, but it will happen from time to time.” They go on to say, “but don’t worry, you see we have this other network outside of what your employees know as ‘in-network.’ So while the charge will be an out-of-network charge, we’ll save you money by tapping into our extended network (referred to as a wrapper network) where we get lower rates than the billed charges. When we do that, we keep 1/3rd of the savings. That way we all win.”

To the employer, that’s great news. Their large, national insurance carrier is going to protect them from high out-of-network charges. But they don’t…

It seems that what was really going on, which I’ve confirmed with multiple industry insiders, is that the bill from the neuromonitoring firm was likely closer to $500,000. It’s a fictitious number. Then the insurance company says, “Through our wrapper network, we only pay $169,600.” That’s about a $330,000 savings. United keeps a third, netting $110,000. The employer — well, they paid $169,600 plus $110,000 for a total of $279K — for $2,000 worth of services. But they never know it because it’s buried in the numbers for a large company.

I confirmed with Dave Altman that they were never able to get a copy of an original bill. They were told that was between the neurology firm and the insurance carrier, despite Colorado law clearly stating that they are entitled to an itemized bill. And to make matters even worse, I’m told the contracts between the insurance carriers and employers prevent them from auditing these transactions because they’re outside the “normal process.”

Now, I cannot tell you the numbers above are precise. They’re just close. But the scheme is precise — this is what goes on. We can’t know the exact number because it’s all kept confidential. This is one of the many deep, dark secrets of legalized collusion that goes on. If that doesn’t tell you why employers should be screaming for transparency in all respects, I don’t know what does.
Our comprehensive price transparency will shine a light on these dark weapons of mass corruption.

Please help me put an end to this insanity. Between now and August 5th, we’ll need approximately $1,500 a day to collect 1,000 signatures a day (with what we already have, that will get us to about 150,00 signatures). It’s proving relatively easy to get signatures — we’re only spending $1.50 for each because it’s such an easy message — but it adds up quickly. Please make a small contribution today. And please share this with your company’s CFO, benefits managers, and anyone else and ask them if they’ll make a company contribution. I’m also happy to come talk to them about how they can address these problems and many others.

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First, an Update

Read below to understand a hidden, but powerful weapon being used against employers and patients alike. But first, here’s an update on our efforts:

  • Signature collection for the BrokenHealthcare ballot initiative was in full swing this past weekend. We have some phenomenal circulators who were at both the Democratic and Republican Assemblies. They collected thousands of signatures and found both groups very receptive.
  • Between now and early August, getting all of the signatures we need will cost about $1,500 a day. Please consider making a small contribution. If everyone contributed just $10 per family member, we’d get there. Please don’t leave this to others—we all have a stake in this. After you read about the Weapons of Mass Corruption that you and your employer are being attacked with, please ask your employer if they will make a contribution, too.
  • As I’ve mentioned previously, the committee hearing on HB18-1538 has been pushed back a week until Thursday, April 26th. This has given us some valuable time to meet with industry groups and draft some proposed amendments. Although the special interest lobbyists are mobilizing against us, our bill is getting stronger and more inclusive. We have strong testimony planned and we are looking forward to the discussion.

Weapons of Mass Corruption

I want to give you an idea of how insurance carriers are taking employers for a ride, and why patients suffer as a result. Most employers in Colorado use self-funded insurance plans. In the case of a large employer with a self-funded plan, the insurance carrier pre-negotiates rates with providers on behalf of that employer. If the employer says to its insurance carrier that it needs better rates with the local hospital, the insurance carrier “negotiates” with the hospital to get that better rate. But here’s the catch: often that “better rate” is not a better rate at all. It’s a better discount, on paper, for the employer, and a price increase for everyone else.

Let’s look at a sample scenario. Say the current contracted rate is 40% of billed charges. That means, for example, that for a CT scan billed at $4,000, the insurance carrier’s rate is $1,600. Now the insurance carrier says to the hospital, I need to take that down to 35% because my client (the employer) is looking for better prices. The hospital says, “enough is enough, we can’t go that low.” And that’s when the insurance company representative says, “Don’t get so worried… I haven’t told you what you can charge me yet (wink).” So what does the hospital do, it increases its chargemaster rate, the highest rate it charges and what we’d think of as its list price, by 5%. For the employer in this case, the price of the CT scan stays flat. For an uninsured patient or an out-of-network patient, the price just went up by 5%. This is a reality. It happens every year. As a result the chargemaster has grown to the point where in some cases, those not in the network are being charged as much as 30 times the price of in-network patients.

For the hospitals, the intent of the absurd chargemaster rates was not originally to rip off patients, and it’s not really their intent today. The chargemaster as the basis of negotiation with insurance carriers has become a game—a game the insurance carriers have learned to play to win. Their employer-customers think they are getting bigger savings. They are not. And patients get hit with bills based on a chargemaster increase by multiples of the inflation rate every year. After playing this game for decades, the result is the absurd and immoral prices you see as “charges” on your bill.

Finally, under an arcane rule from the Centers for Medicare and Medicaid Services, healthcare providers must “charge” every patient the same rate. They can discount it if they want, but everyone has to be charged the same. So if you are not in an in-network plan that has negotiated a good rate, you are screwed. You get charged those ever-increasing chargemaster rates.

You can quickly see why I call the chargemaster a “Weapon of Mass Corruption” used by both hospitals and insurance carriers alike. This is why we need all of the information about what has been negotiated—both the chargemaster and the rates negotiated with insurance carriers. Without both, we have nothing.

Please help us stop this insanity and go to the BrokenHealthcare.org website to make a contribution today. Without your help, we will not be able to collect the signatures we need to ensure you have the right to vote on this in November.

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UPDATED 4/7/2018 9:38am MT

“Justice will not be served until those who are unaffected become as angry as those who are.”

-Benjamin Franklin

Investing in the Future
We had a great weekend of ballot signature collection at both the Democratic and Republican Assemblies this weekend. People are angry about America’s broken healthcare system and it continues to impress me just how bi-partisan the subject of price transparency in healthcare truly is. But getting this legislation on the ballot is also a costly process. Please consider making a contribution to help ensure we get this done. As I’ve said before, I see this as more of an investment than a contribution. If we restrain the rising cost of healthcare by even 1%, that’s worth $100/year for every member of your family. The cost savings we drive are much larger than that. While it might sound like a lot, consider how much you are spending on premiums, co-pays and deductibles. Isn’t this worth an investment? We can’t leave it to others to solve this problem. Everyone should contribute or we risk not getting it done.

Corporate Workshops/Webinars
I’m also going to be offering all of the following to help your companies contribute. Participants who need to earn credit toward professional recertifications will be able to get one-hour of credit from IACET or SHRM. Here are some workshops/webinars to choose from:
  1. I will come to your company and speak to employees about how to manage their own healthcare costs and will ask your company to make a donation. Just one person making one good decision by avoiding the wrong emergency room can save thousands of dollars. Many employees making better decisions when they have a better understanding of how our healthcare system really works. Just write me to schedule it.
  2. I will be conducting a webinar geared toward individuals/employees. Watch for that announcement. The recommended donation is $59.
  3. I will be conducting a webinar geared toward CEOs, CFOs, and benefits managers responsible for managing their company’s health insurance plans. The recommended donation is $299.

Legislation Status
On the legislative front, the healthcare price transparency bill we’ve been fighting for goes to committee on Thursday, April 26th at 4pm MT. Please come and voice your support. If you’ve never been to a committee hearing, this would be a great time to get involved. It will be busy, but please introduce yourself—I’d love to meet you.

The ballot measure is an important element of the pressure on the legislature and many of them saw our signature collectors out there this weekend. HB18-1358 will be the first step in transforming American healthcare by setting an example right here in Colorado. It’s a bold bill, but one that is steeped in common sense and simplicity. If you read the bill, it might feel overwhelming at 20 pages, but there’s actually very little to it. The first 8 pages are declarations and definitions—legalese to most of us. The bill is double spaced, too. All the bill really does is require transparency into the prices we’ll pay for healthcare services and prescription drugs. That’s it. Don’t we deserve that? Don’t we need it?

This bill couldn’t be more timely, either. Last week California introduced a bill that is the complete opposite: total price regulation, including the prices paid by insurance carriers. Of course the healthcare industry quickly came out in strong opposition, just as they have in the case of our bill here in Colorado. So ask yourself—if they don’t want regulated prices, and they don’t want transparent, competitive prices, what is it they want? You got it—they want the status quo, which is a system of confusion, obfuscation, and structural collusion that protects skyrocketing, monopolistic prices, creates barriers to competition, and concentrates the profits in the hands of just a few large actors. Slowly, not only are smaller healthcare providers being shut out of the market, so, too are smaller companies that can’t find affordable healthcare for their employees. The economic consequences of not fixing our system should frighten everyone—including long-term shareholders of healthcare industry stocks.

Best Practices
We are not trying to destroy America’s healthcare system. We are trying to save it. We don’t want to emulate the systems they have in other countries. We want to take the best ideas from everywhere and build a uniquely American system that we can be proud of and that serves all Americans—one that is competitive, innovative, and affordable, so that all Americans can access the healthcare they need to live long and productive lives. Making choices about which characteristics of other systems are best is something we do in business. It’s a simple concept, really, it’s called Best Practice Adoption. The thing is that government can’t choose best practices. No one can. It’s done through markets where some companies try one thing, while others try something else. The market determines which are best and those systems survive while others die. No company can choose correctly and neither can government. Without a functioning market, we won’t make such choices. We’ll stick with a bad system with ever-rising prices and limited access.

We Can’t Do it Without You
Please continue writing and calling your legislators. Believe it or not, it really matters. They know when they are hearing from people and it makes an impression. Please write to Democratic and Republican party leaders, too! And please continue volunteering to help. And please…do contribute so that we can also continue to hire professional petition circulators to fill any gaps in what we collect through your efforts.

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The healthcare lobby is spending YOUR money to lobby against your best interests so they can pocket uneconomic profits. Please get involved and make a small contribution to help us stop them. The payback on your investment will be immense if we succeed—but we can only do it with your help.

Now don’t get me wrong—I’m all for fair competition, fair profit, and everyone trying to make as much money as they can. That system works, but only when the marketplace is truly free and fair. In free and fair markets, profits are established by performance (service, quality, availability, etc.), and those that earn it deserve it. But we don’t have free markets in healthcare, and thus the profits are obscenely high and there is nothing driving prices down so that everyone can enjoy inexpensive, high-quality healthcare.

Think about the market for food. Food in this country is abundant and very inexpensive relative to the rest of the world, but that’s because we have highly efficient farms, distribution systems, and grocery stores. It’s a marketplace that works. Why is healthcare different—no one has explained that to me yet. They’ve tried, but I have yet to understand why we cannot have abundant, available, accessible, and high-quality healthcare in our country.

The House Health, Insurance and Environment hearing on our bill is scheduled for 1:30pm CT next Thursday, April 19th. I’ve already heard from people who say they’ve never been to a hearing before, but they’ll be at this one. Packing the committee room is important. It sends a strong message (and perhaps you can edge out some of the lobbyists if you get there early). If you can make it, or if you can release some of your employees for the afternoon, a strong showing is vital. The hearing is scheduled for the lower level of the Capitol, room HCR 0107. I’d also like to meet you, so please introduce yourself if you come.

The lobbying against us is in full force. We hear from new organizations every day. When I ask them why we haven’t heard from them before or why they did not respond to our calls when we were working on the language of the bill, the answer is always the same: “We never thought it would actually get this far.” Truth be told, neither did I. That’s why we’re pursuing the ballot measure. That’s not how this should happen, but it’s likely it’s how it will.

In case you’re interested, here’s the firm hired by the Colorado Hospital Association (at least that’s the best info I have) to prepare the negative ad campaign and to lead the fight against the bill: http://www.crlassociates.com/. Feel free to let them know how you feel.

And thus far there are 18 lobbyists who have registered to lobby regarding the bill. The pharmaceutical companies are best represented with 12 of the 18.

Other Ways to Help

If you can’t make it to the hearing (or even if you can), there are plenty of ways you can help make sure the healthcare lobby doesn’t keep us from a better healthcare system. Signature collection for the ballot is well under the way. Start looking for us at events you go to, whether to run a marathon, standing in line outside of a concert, or at art festivals, street fairs, and other places. We could use volunteers to man tables and booths at large events. Paid signature collectors (formally known as circulators) will also be there, but every signature collected by a volunteer is like making a $10 contribution to the cause, so we really need volunteers. You can collect dozens of signatures by hanging out with like-minded people for a couple of hours. Of course, you can also donate the money to help pay for the paid signature gatherers.

As you consider if, and how much, to donate, consider this, too: all of those lobbyists and the marketing firm working to prevent this law will be paid many times what we need to enact it. And who’s paying them? You are—through the fees you pay to healthcare providers and the premiums you pay to insurance companies. The industry is using the high prices it charges to make sure that prices can continue to rise. That has to stop.

I believe in a free market. Everyone should make as much money as they can—but in a free market. Our market is anything but free today and that is what we are going to change. So, say “no” to hospitals, physician associations, pharmaceutical companies, and insurance companies spending YOUR money to LOBBY AGAINST YOU.
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The last several months—really the last year—has been quite a journey. We’ve come so far, and yet we are just getting started in our David v. Goliath (pun intended) political battle.

A year ago, I was told by political insiders that there was a one in a million shot that the Colorado legislature would pass a serious and comprehensive bill on price transparency in healthcare. We decided to try anyway. By January 1st of this year, I put the odds at 1 in 100—still very long odds. Today, I’d say we have a 10% chance of getting the legislature to give the citizens of Colorado as chance at a fair and functional healthcare market and to allow Colorado to set an example for the rest of the country. Our bill was introduced last week with bipartisan sponsorship and just about every legislator I have met with on board. Yes, we have a chance.

You might be asking yourself, why is there only a one in ten chance when everyone is on board? The answer is simple: powerful and wealthy lobbies, and politics.

Right now, I’m confident the bill will pass in the State House of Representatives. And if put up for a vote, it would pass in the Senate, too. I’ve been extremely impressed and pleased by how thoughtful the politicians on both sides have been. Nearly every one of them wants to do the right thing and they see the wisdom of price transparency in healthcare. Support could not be more bipartisan. Still the powerful healthcare lobby is fighting against our bill, which fully supports free enterprise. That truly makes no sense.

Thoughtful politicians on both sides are frightened, like I am, at what we are likely to wind up with if we don’t pass a comprehensive price transparency bill. California has come forward with its own response to our broken healthcare system. And it is not pretty. California introduced a bill that would allow the state to fully regulate healthcare prices. That’s right—government would set the price of all services, including prices paid by third-party payers (i.e., private insurance carriers). If this happens in California, the idea is likely to spread. That is something hospitals and insurance carriers should really be worried about.

Instead, the healthcare lobby is fighting against us. This is dangerous and short-sighted. To maintain the status quo and profits under the current paradigm, the industry is betting they can fend any change. They can’t. The system is dysfunctional and unstable, and that means it will tip one way or the other. The status quo is not really an option. But that’s what the big industry players are fighting for—and it’s what we are at risk of politics supporting.

What we need is to ensure this bill (HB18-1358) gets a fair shake. If it is sent to a solid committee in the Senate, it will pass. So, the strategy that will be encouraged by the lobbies will be to encourage the Senate leadership to send it to a committee preordained to kill it. This appears to be the current path the healthcare industry is counting on. What’s remarkable is that Republicans are the most supportive of this bill, yet Republicans control the Senate and that means Senate leadership. Thus, if the bill is sent to a so-called, “kill” committee, Republicans will be sending a clear message that the special interests matter more than saving America’s healthcare system. I don’t believe that’s what most Republicans want—at least not those I talk to.

I’d like to thank everyone that responded to yesterday’s request to contact your state legislators. Many did and copied me. I assume many more did and that I just didn’t see it. Thank you all. Please keep it up. And in particular, please let our Senate leadership team know that you want this bill to get a fair shake.

To ensure this gets done one way or another, we are pressing forward with the ballot measure. Signature collection is under way, and that means costs are mounting. Without continued funding, we won’t be able to get this done. And the ballot measure is also a big point of pressure with the legislature. Please consider contributing to this cause—the payback for you, your employer, and all Coloradans is immense.
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If you’ve been following BrokenHealthcare’s efforts, you know this is what we’ve been working toward. Our non-partisan legislation is now before the Colorado House of Representatives. Here’s how you can help ensure it passes:

Tell your representatives to pass it!

  • Write to your state representative. You can find their email addresses here. Please feel free to copy me at DavidSilverstein@BrokenHealthcare.org. Just ask them to “Please vote for HB18-1358!” If you are not sure who your state representative is, you can look it up here. And as a Coloradan, you can certainly ask every one of them to vote for this, not just your own representative. Feel free to write dozens of emails if you are so inclined.

  • Plan on attending the House Committee hearing on the bill on April 19th at 1:30. It is very important that we pack the room and show our legislators that we matter much more than special interests. It is we, the people, that vote in November. The committee room is in the lower level of the Capitol in room HCR 0107. Please send me an email if you think you can make it (DavidSilverstein@BrokenHealthcare.org). I’d love to meet you!

Help us hold the legislature accountable through the power of the ballot.

This week we started collecting signatures for the ballot measure. Knowing that this will pass in November is one of the best ways to send the message to the legislature that we want them to do their job and pass this now. Bypassing the legislature through the ballot is an extreme measure that should not be necessary. Our legislators know that nearly 100% of their constituents favor this bill. For them to vote against it or to use procedural means to kill it is a direct indication that special interest money (hospitals and insurance carriers) means more to them than their constituents. There is no other explanation, and no other excuse, for a failure to pass this bill.

In November, we should reward those with the courage to fight for it and reject those who abandoned their constituents in favor of special interests who hide behind a veil. To ensure this happens, we need to raise money and we need volunteers to help us collect signatures. We know this measure will pass once it is on the ballot. To get it there, we need 140,000 signatures. Each signature costs time and money. Even a small donation of money or a small contribution of your time (a few hours) will add up fast if everyone gets involved. This affects us all—greatly. So please consider donating just $10, or $10 per family member. Please consider collecting signatures in your neighborhood (we’ll give you everything you need). And please consider asking your company if you can collect signatures for us at work, too.

We are ready to move Colorado (first) towards a healthcare system we can trust. Please help us make the system better for all of us.

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