Warning I Think We're Next

I was pondering the economy today. The most inflationary part of the economy is medical expenses. This is true in the global economy, where medical expenses separate the have's from the have not's, and millions are driven into poverty every year. Hospitals and doctors are even offering credit cards to patients so they can pay for their care and interest on top. Who's taking advantage of who? We're beating up the oil companies because their gasoline went up 40% over 20 years.

Now if you talk to doctors or nurse practioners they will blame much of the medical cost increases on insurance companies. The insurance companies appear to be the easiest to blame for "massive" profits on the little people. They will also blame the liability coverage required because our legal system allows them to be sued anytime they make a mistake, they are risking our lives and deaths every day and will be punished financially if they make a mistake.

If you talk to insurance companies they will say that it is the doctors making huge salaries and profits off the little people and the drug companies pillaging us so they can sell cheap drugs eleswhere. Airline pilots don't make $250,000 a year for flying around anymore. Big business CEO are having their income reviewed for overpayment. But according to insurance, doctors and medical practitioners are making huge incomes and increases on the backs of the little people. For some reason this is compounded by the government making it illegal for a doctor to give a preferred price to a preferred patient. Talk about big brother. You can't negotiate your prices on medical coverage, why?

The media will suggest that advances in life sciences which have added decades to life expectancy are expensive. We can live much longer but to do so requires extremely expensive drugs and treatments that someone has to pay for. We can now live many years into retirement and that means that eventually the government will take over many people's health care since they will run out of savings, and the government as we all know is a poor purchaser of anything. They pay full price, or higher than full price for everything. By the way, the theory continues, that once the government agrees to pay too much, then everyone will raise their prices to that level. Basically, government protected pricing, like a monopoly utility.

Regulation is high, the cost of research is high and the government is extremely slow at processing new technologies. Many foreign countries get new medical technologies before the United States patients do.

Therefore a spiraling cost formula, where the rest of the economy is growing steadily at 3-5% and inflation is low at 2%, the cost of health care is in the double-digit growth ranks. What's the market going to do? Shouldn't the market forces prevail in this state of irrational exuberance and drop the cost of health care by 20 or 40%. That's what's predicted for housing right?

City of Bethlehem suing Guidant over product failures

The IRS lets a taxpayer deduct any expenses over 7.5% of their AGI, which for many people is a reality. More than 7.5% of their income for health care?

Big companies are dropping their near job to grave coverage, too expensive, now retirees and employees will have to pay some of their own expenses. My prediction? The end of company medical coverage within a decade. No company can pay year over year increases in excess of 10%, and keep the prices of their products level or even decreasing. It can't happen. Something will break.

Part Two tomorrow, here's the rub. I don't know that much about medicine, but I know housing. Are we next? What's the other huge increase in family expenses? Housing! I'm worried.