economics

No One Knows the Cost

We talked about the high cost of healthcare. When people talk about how the US healthcare system is “broken” they are mostly complaining about cost. Getting costs down is tricky, and it’s a problem that was caused by government interference.

The Medicare Physician Fee Schedule is a 1,348-page document, and the final rule for hospital inpatient payment systems is 773 pages long. For some services, it’s impossible to know how many pages of regulations and price controls there are. For example, The Centers for Medicare & Medicaid Services (CMS) does not condense the Medicare payment rules for ambulances into a single, definitive document. The regulations for ambulance charges are spread across multiple manuals and chapters, all of which are constantly being updated and revised. A definitive page count for the rules does not exist, because no one knows for sure what all of the rules are.

All of this adds to the cost, as medical providers have to hire entire departments just to take a guess at what they can and should charge you, and even then, they often get it wrong, because the rules are contradictory.

Every time the government steps in to fix it, they add pages and chapters to the manual, but instead of fixing things, they make it more complex with carve-outs, backdoor deals that kickback money to big donors, and the need for an even larger hospital billing department.

I do want to respond to one comment, where someone said that reading a CT scan shouldn’t cost $1500 because it only takes an experienced radiologist 30 minutes or so to do it. Remember that you aren’t just paying for the radiologist. You are also paying for his malpractice insurance, the costs of compliance with government electronic charting and recordkeeping, the costs of his staff to include the billing department, and other associated administrative overhead. That radiologist is only getting a small fraction of that money, in many cases, less than a fifth of it.

  • Malpractice insurance for a radiologist is around $25,000 per year
  • Costs for electronic health records: for a smaller practice, you are looking at around $400,000 for initial costs, plus another $50,000 per year. In the case of radiologists, it will be even more to integrate with the output of proprietary CT machines.
  • Plus staff and administrative costs
  • So a radiologist is paying $200k or so a year just to read those CT scans. If he isn’t charging that kind of money, he might as well go be a plumber.

Keep in mind that an hour’s work from a plumber costs about the same as that radiologist is going to cost you.

By Divemedic, ago

Costs of Care

I had a tough week recently. You wouldn’t believe how tiring it is to use your brain at a high level, with lives in the balance, for 12 hours straight. It’s a high stakes, high stress endeavor. When I work and the day is especially stressful, I am in bed asleep within an hour of getting home, and I sleep until it’s time to go back to work. Let’s look at one of the patients I had on one of those days:

A woman decided that she was going to kill herself by taking every pill she could find in her house. Three hours later, she changed her mind and called 911. She was a frequent visitor to the emergency room and had been placed on involuntary psych holds (called a Baker Act) a few times before, due to suicide threats that turned out to be cries for attention.

She was my patient.

EMS handed me a bag of empty pill bottles, all of which the woman claimed to have taken. A final count of the pills revealed that she had taken most of a 90 day supply of Digoxin, Wellbutrin, Sotalol, Xarelto, and a few other drugs. I think we finally estimated 50-60 pills of each were unaccounted for.

I asked the doctor if he wanted to do a gastric lavage. He said he didn’t want to, because it had already been 3 hours and any pills she had taken were likely digested by now. He also pointed out that her vital signs were unchanged, and this was a good sign that she was again acting out, but hadn’t actually taken anything.

I told him that, since the drugs she had claimed to have taken were mostly extended release, we would be looking at some real trouble in about another hour. He told me to watch her and call him if anything changed.

I had three other patients, including another Baker Act. Those involuntary admissions require a lot of paperwork, so I was busy.

About an hour later, I got a call from the telemetry operator that the woman’s heart rate had suddenly dropped from 62 to less than 35. I ran into the room and found her in a junctional escape rhythm at 32 beats per minute. I called the ED doc, who was on the other side of the department, and told him what I had. I recommended Atropine and Glucagon and asked for the order. He concurred and said he was on his way.

By the time he got to me, I had called a Resuscitative Medical Alert. That gets me the ED rapid response team, including a charge nurse, three other nurses, two techs, a respiratory therapist, and Xray tech with a portable Xray machine, and the ED doctor. I gave her two doses of Atropine and two of Glucagon. It didn’t do a bit of good.

I suggested that we start pacing immediately. He agreed, and we started external pacing. Her blood pressure was shit, so as the Dr prepared to intubate, we got orders for and hung an Epinephrine drip. Then it was Ketamine, Rocuronium, intubation, and a Ketamine infusion. By then the ICU doctor and a dose of Digifab had arrived. We got the Digifab running and took her to ICU.

She lived for 5 days in the ICU. That was 1 of the 22 patients that I had that day. She was also 1 of the 7 suicide patients I had that week, and the only one that didn’t survive. In fact, I had 81 patients that week and only 3 of them didn’t survive.

While she was there, she received over $300,000 in medication. The Digifab alone was almost $100,000 of it. They tried dialysis, it didn’t work because the Digitalis molecules were too large to dialyze out. Her total bill was well over a million bucks.

Some of the drugs she got were specialized and aren’t given to many people, so they are costly.

She isn’t going to pay that bill, because she is dead. So who pays it? We all do. The hospital spreads those costs out across every patient. It’s like going to a restaurant where everyone gets to eat whatever they want, they can order one of everything on the menu, and about a quarter of them don’t pay, so everyone else has to pony up the difference.

It’s an ethical conundrum. Who decides what treatments will be offered? If we leave it up to the hospital, does the patient get a choice? Does the insurance company? There are pitfalls to each answer, and trust me, it’s one that healthcare workers debate frequently.

Someone has to pay for all of the education and experience of the providers. Not only while they are actually providing care, but also for UHU reasons. Now UHU is a concept that originated with EMS, but applies to the ED as well. UHU stands for “Unit Hour Utilization” and symbolizes the amount of time in each hour, on average, that an asset is busy treating a patient.

If the UHU is too low, you are spending money to have expensive assets sitting around. If your UHU is too high, there is a chance that someone will need their help and it won’t be available because it’s being used elsewhere.

All of that must be paid for, and that’s the issue.

Americans demand the best of everything. They want to have top notch care, they want it available at a whim, they won’t tolerate errors, and that is expensive. Every one of the actions taken in that woman’s case were areas where mistakes could have been made. They have to be done every time, without error, and it must be the right thing at the right time, no exceptions.

Now multiply that by the 200-500 patients a day in that ED. That isn’t cheap.

That’s the issue- Americans want it perfect and they want it on demand. The best of everything. Cost is no object. Sure, Americans complain that healthcare is expensive, but mention a system where an official controls cost by denying your claim, or as in the case of Canada, recommending euthanasia, and see people howl.

So you could control costs by making it easier to be a medical professional, but that would mean lowering standards, more medical errors, worsened medication quality controls, and more frequent things like hospital acquired infections.

Or make it cheaper through rationing. You could wait 2 years for an MRI.

I’m not saying that there aren’t examples of waste and fraud. I know there are. I also have a problem with hospitals not disclosing their rates up front. You should know that it’s going to cost $20,000 for a CT scan, another $1500 for the radiologist to read it, etc. Trump tried to do that, and the hospital lobby shut it down through Congress.

However, how do you control that in a nation as large as ours? Anyone who says there is an easy answer is being childishly naive or doesn’t really understand what’s going on.

If you passed a law mandating that anyone could have dinner at any restaurant they wish, could order whatever they want, and the restaurant couldn’t demand payment up front, and people could buy “dinner insurance” to pay for it, what would people eat, where would they eat, and how much would dinner cost?

By Divemedic, ago

Healthcare

As I have said before, since there are only so many doctors and other medical professionals, there are only a couple of ways to manage a healthcare system:

  • You can tinker with supply. That is, you can increase supply by making it easier to be a doctor, which carries its own liabilities, like lowering the skill level of the professionals performing brain surgery and the like; or
  • You can tinker with demand. There are two ways to do this, as far as I can see. You can either allow price to control demand, or you can let a government official set quotas and a waiting list.

The US has chosen to (mostly) control demand by allowing prices to dictate what people can afford. Canada has gone the route of price controls and government setting quotas with waiting lists. Let’s check to see how that is going:

Meanwhile, patients who need an ultrasound get one at my hospital within 30 minutes of it being ordered. An MRI takes a bit longer- we usually can get someone in within a day or two.

By Divemedic, ago

Making It

My post from the other day surprisingly hit a nerve with some people. Even among the readers of this blog, there appear to be many people who are their own worst financial enemy. They still would rather believe that the deck is stacked against them and scapegoat someone else for their own lack of making it.

The gist of all of this is some sort of excuse about how it is someone else’s fault that they aren’t successful. That person could be faceless judges, the rich who have pulled up the ladder behind them, boomers, your ex-wife, whoever.

It’s all bullshit. There is no evidence that it’s any harder now than it was 50 years ago. For starters, home ownership isn’t as difficult as it seems. In the US, less that half of all US citizens owned their own homes before WW2. After that war, there was a homebuilding boom that saw homeownership rates increase to 55% in 1950, 62% in 1960, then 63% in 1970, when Baby Boomers began buying homes. The 80’s and 90’s had homeownership rates around 64%, and increasing to 66% by the turn of the millennium.

Homeownership rates peaked in 2004 with a 69% rate. It fell with the collapse of the mortgage lenders, bottoming out at 63% in 2016. Even now, homeownership rates are hovering around 65%, which is still higher than it was through most US history.

The only person holding you back is- you. Well, you and the choices that you make. Yes, I am telling you that if I made it, you can, too. Remember that I was bankrupt in 2009. When I left that bankruptcy, I had less than $3,000 in assets, and that included a car I was still making payments on. I lost my house in that bankruptcy and had to move back into an apartment. That was when I took a very real look at what I was doing. I made changes.

I am telling you to take a real look at where your money is going. Don’t buy useless shit. Buy and payoff a house. Save, invest. Get your spouse on board with your effort- it won’t work unless you are both doing it together. You won’t be able to make it if one of you is saving while the other is spending.

This is intended to be motivational. You can do this, but it won’t be easy. It will take spending discipline. It will take some effort. Not everyone is going to be wealthy- but anyone CAN be wealthy.

You can do it. Or you can keep blaming a scapegoat for the fact that you aren’t.

By Divemedic, ago

Socialists Clueless About Economics

I keep seeing things like this, and it really bugs me:

Since 2013, I have been warning those pushing for an increase in minimum wage that it will simply cause higher prices. I, along with others, have been shouted down and told how stupid and wrong I am.

Seattle and California have a $20 per hour minimum wage. The answer is “real communism hasn’t been tried.” People in the Seattle area now have to contend with $26 coffees and $32 sandwiches, with taxes and delivery fees comprising nearly 30 percent of the total bill. Instead of listening, the left is now demanding $33 an hour as a new minimum wage.

If $20 is good, and $33 is better, why stop there? Why not make the minimum wage $250 an hour? Then we can all be rich!

Next month, Florida’s minimum wage will increase to $14 per hour, a 61% increase from the $8.56 minimum wage in the state back in 2020. Not coincidentally, the median home price in Florida went from $306,000 in 2020 to $436,600 in 2025, which represents a 43% increase in house prices.

Rents saw similar increases. Rentals were costing a median of $1187 in 2020, and now are running about $1752 in 2025, a 67% increase.

Increase the minimum wage, and prices will increase to match. Economics, it’s a thing. The socialist blames a free market, but it’s market manipulation that is causing a huge chunk of this.

It isn’t just housing. As long time readers are aware, my Denny’s Grand Slam scale is a great example of this. That breakfast has 2 strips of bacon, two link sausages, two eggs, and two pancakes. A good cross section of food products. I have been using the price of this breakfast in the same Denny’s location since 1997 as an indication of costs.

  • Here we are in 2025, and the cost of that breakfast is now $14.19.
  • In 1997, that breakfast cost $1.99
  • In 2009, it cost $4.99
  • In 2021, it cost $9.29
  • Just a year later in 2022, it was $11.59
  • In 2023, the rate slowed a bit. The breakfast was $11.99 in April
  • By November of 2023, the price was up again, to $12.99

So the breakfast in 2021 was $9.29, and it is now $14.19, a 65% increase. It’s almost like prices across the board are increasing to match wages. It’s a simple rule- more money (demand) chasing the same goods (supply) equals higher prices. Now there is a bit of a mismatch, because population (which is also part of demand) has increased a bit, but it still illustrates the point.

Before any of my readers respond with “well, technically…” please understand that my relatively short posts are not an exhaustive treatise on the issue. Books have been written about this, and I am not writing a book here. I had one reader respond to a recent post that mentioned income taxes with a comment that stretched into more than 600 words, explaining that I had calculated the taxes incorrectly. This post went into details about exemptions, credits, and other factors that made my numbers incorrect. My posts aren’t meant to withstand an IRS audit. I use public sources and usually post links to them, but they are still meant to be quick examples to illustrate the point. Responding with an over 600 word comment to explain one insignificant sentence in a 450 word post is just silly.

By Divemedic, ago

Florida Taxes Rising 10x Faster than Population

Property taxes in Florida are skyrocketing.

The population of the state of Florida has increased the most of any US state, but the increase in population was still only 8.2% since 2020. Where is all of the money going?

Taxpayers are being fleeced. Ripped off to pay for DEI, illegal immigrants, and for government employees to groom your children to turn them into twinks and trannies. Enough is enough.

By Divemedic, ago

It Must Be Deliberate

This article has hit my feed several times recently, and the author is either deliberately being deceptive, or she is just a moron. The headline reads: “I Asked ChatGPT What Would Happen If Elon Musk Paid Taxes at the Same Rate as the Middle Class” The claim is made in the article that Musk only pays a tax rate of about 3 percent, because his net worth increased so much.

The article claims that Musk can dodge taxes by using the value of his assets as collateral to take out a loan, which isn’t taxed. They are demanding that we tax people on the unrealized gains of their assets, because rich people something something.

The author is comparing apples to Volkswagens. The middle class, for the most part, pays taxes on income. It’s right there in the name: Income Tax. In the article, you are talking about taxing the rich on their wealth. It’s two entirely different concepts. If the two were equal, the middle class would be paying taxes on the value of their house, not on what they make.

As an example, let’s say that an average guy and his wife are making the US median income of $80k. They have two kids, take the standard deduction, and are thus paying $9400 in income tax, plus Social Security, Medicare and other payroll taxes totaling $11,752. That makes this family’s effective tax rate 14.69%. However, his house is worth $40,000 more than it was last year. That $40k is an unrealized gain, and this lowers his effective tax rate to 9.7%.

Now look at Elon’s taxes. They are screaming that his wealth increased by $86 billion in 2021, but he “only” paid $8.6 billion in taxes. They don’t say what he actually made, just what he is worth. It just isn’t a proper comparison.

My opinion here is that the powers that be desperately want the ability to tax wealth. Currently, this isn’t permitted because the 16th Amendment only permits the taxing of income, not wealth. Once they get the power to tax what you own, and not just what you make, there is no limit to what all of us can be taxed on.

  • Your retirement account? 2% annual tax
  • Your house? 4% annual tax
  • You have a collectable car? taxed at 5% of its gain

The beauty of this, is that even if your unrealized gains are adjusted for inflation, the official rate of inflation is lower than the actual rate. So if they let you deduct 2% of your unrealized gains as being inflation, but the actual rate of inflation is 5%, you will pay taxes on that extra 3%.

This will make all of us poor in no time.

By Divemedic, ago

Economic Illiteracy

Read this to begin the post:

A maximum wage? So what happens when your doctor, lawyer, or accountant hits that amount in September, and decides to take the rest of the year off? You will pass a law saying that they have to work all year? OK, so those high wage people, being smart, do some math and switch to a three day, 24 hour workweek. Good luck getting a doctor on Thursday. That means doctor appointments will be even more difficult to get.

The funniest part of all this, is that it won’t affect the truly wealthy. They don’t earn wages. They make their money from investments. Cap those, and people stop investing, which will grind the entire economy to a halt.

Democrats really are economically illiterate.

By Divemedic, ago

Property Taxes Again

Governor DeSantis is pushing to have a ballot initiative on Florida’s 2026 ballot. The initiative would be to eliminate property taxes.

Those who oppose this claim that counties, school boards, and other government entities rely on this to provide essential services. That’s a load of crap. On average, counties only rely upon property taxes for 18% of their expenditures. Of course, if you ask the counties, they play a bit of a shell game with the facts:

“If you want to get it from sales tax, well, it’s really going to disproportionately hurt lower income,” Kroll said.

Each year Kroll’s offices collect more than $700 million from property taxes, he said.

“The majority of it goes to the school board that that’s about $248 million,” Kroll said.

The remaining revenue goes to the Seminole County Board of Commissioners and Kroll said they use most of that money to fund the budgets for the Seminole County Sheriff’s Office and Fire Rescue.

  • It isn’t going to disproportionately affect lower income. See, lower income will buy less stuff, so they will pay less in taxes. If a person spends ten times as much, they will pay 10 times more in taxes. That’s how proportionality works. What they really mean is that the poor are now paying nothing, while those who aren’t poor are paying for bullshit that isn’t necessary. There are so many carve outs and exemptions, that nearly half of the people in my small town pay NOTHING in property taxes. More on that in a minute.
  • Don’t look now, but $248 million isn’t most of $700 million
  • The Seminole county school board has an annual budget of just over $1 billion. Only 1 in 3 households in Florida has a school aged child, yet we are each paying thousands to send those kids to school, even though education is a giant failure. It’s a huge drain of resources.

Seminole County’s proposed 2025 budget is $1.2 billion, which includes a potential property tax increase for 2025. That amount also doesn’t include the money that goes to the school board, because that is a different budget. In fact, they are increasing the milage rates for property taxes by 10% over 2024 levels, as well as increasing the county gas tax from 6 cents to 11 cents per gallon, and increasing taxes on electric, cable, and telephone.

With property values climbing, there is no need to raise taxes, but they do like them some tax and spend. Government officials always like to blame the services that are popular for tax increases, even though there is plenty of room to cut other, unneeded services. People don’t want to see the fire department cut, so they fund things like free needles for drug addicted transgender unwed mothers, then cry poor when there is no money left for the fire department.

Let’s take a look at the Seminole County Sheriff’s budget: There is plenty of waste here. The SWAT team has 20 members, and spends $4.5 million a year on it. That is a lot of money. Perhaps there is some room for cuts there. The sheriff’s office is paid $4.4 million per year to provide school resource officers to Seminole county schools, but actually providing those officers costs the Sheriff’s office $9.9 million per year. The cheaper way to go is to have the schools participate in the Guardian program, allowing teachers who volunteer to go through the training to be armed at school. Most counties in Florida who are part of the Guardian program accept the grant money, but then pay cops to fill the roles while not allowing teachers to participate. It’s a HUGE waste of money to have cops there when so many teachers would do it for free. Then they are spending all of that cash, only to find out that school resource officers aren’t required to do a damned thing if, God forbid, there actually IS a shooting at their school.

I pay over $6,000 a year in property taxes. 28 percent of that goes to the county, another 33 percent to the town, 31 percent to the school board, and the remainder to police, fire, EMS, hospital, and the water authority.

Overall, the loss of property tax revenue would mean that government agencies would need to get rid of some luxury items and perhaps learn to stop wasting money. If I could vote more than once to get rid of property taxes, I would.

By Divemedic, ago

More Fat

In yet another example of tax funds that can be cut from the budget, people who want to upgrade their homes at taxpayer expense are angry that the state isn’t taking your money and giving it to them.

That’s $280 million per year that is stolen from one set of homeowners and given to another. A married couple with two kids who make more than $27 per hour, can’t receive your money.

That budget money is $30 taken from each household in Florida. Just one program. How many more can be cut?

By Divemedic, ago