Article 43
Saturday, April 30, 2016
Lies Lies and OMG More Lies
By Administrator
The Burning Platform
April 29, 2016
Its that time of year again. It’s open enrollment for health plans at my employer. They are biggest employer in Philly and have the most leverage possible with the insurance companies. They have such good leverage that my premiums are going up “only” 9.8% this year for a basic HMO plan. Based on what I hear from others, I should be thankful for just a 9.8% increase.
This isn’t a new development. Since I’ve been tracking all my expenditures using Quicken since 1991, I know exactly what my annual health insurance costs have been every year. OBAMACARE was passed in 2009 and began to be implemented in 2010. Obama declared that FAMILIES COULD EXPECT $2,500 of savings per year. I know for a fact my annual medical expenses were $2,000 higher in 2015 than they were in 2010.
The lies of the government and their minions at the BLS are revealed to anyone who cares to open their eyes. The BLS reported inflation rates for health insurance since 2010 is beyond laughable. They must have triple seasonally adjusted, massaged, and tweaked these figures to arrive at the absurdly false inflation figures they are feeding to the sheeple. These are the reported inflation figures for health insurance since 2010:
2010 (4.0%)
2011 5.6%
2012 10.6%
2013 0.9%
2014 (0.8%)
2015 3.7%
According to the BLS, and built into their CPI calculation, your health insurance premiums have gone up by about 16% over the last six years. Now for the smell test. I have worked for a large employer with excellent healthcare benefits over that entire time span. My health insurance premiums have risen by 65% since Obamacare was passed. And that doesn’t capture the whole picture.
I had no deductible in 2010. I now have an individual deductible of $1,200 and a family deductible of $2,400. My co-pay back in 2010 was $15. Today it is $25. So my out of pocket expenses have risen too. I estimate I can add another 15% of increase due to these changes. Therefore, I’ve experienced 80% inflation in my health insurance expenses versus the BLS lie of 16%.
In case you werent paying attention, the BEA reported the latest GDP lie yesterday. According to these government drones, the economy grew by a whopping 0.5% in the first quarter. As you may or may not know, this figure is adjusted for inflation. Our beloved BLS propagandists assure us that inflation has been running at a microscopic 0.9% over the last twelve months. Does anyone who is not a halfwit or Ivy League educated economist actually believe that tripe?
As most people know, 67% of GDP is based upon consumer spending in our debt financed land of plenty. It seems the more you have to pay due to Obamacare, the higher GDP goes. The more you pay for rent the higher GDP goes. The more you pay for gas, heat, and food, the higher GDP goes. Isn֒t government accounting grand? The government systematically under-reports your true inflation, while pushing the monetary and fiscal policies which drive your actual living expenses ever higher, and then tells you the economy has never been better. They love the Big Lie.
The utter falsehood of the BLS presented inflation statistics is clearly apparent in the comparison between what is happening in the real world of housing versus their excel spreadsheet models. The BLS declares rents are rising at a 3.2% annual rate. In the real world they are rising at an 8% annual rate. There appears to be a slight discrepancy. Do you think the market is lying or the government? The average monthly rent is now $870, an all-time high up 24% since 2012. The BLS says rents are only up 10.8% since 2012. Do you believe your landlord or the BLS?
The ridiculously conceived owners equivalent rent is supposed to capture home price inflation. This BLS rigged black box also accounts for the largest single weighting in the CPI calculation. Nothing like a made up number to give the BLS the most ability to manipulate the truth. The Case Shiller home price index, based upon real prices in real markets shows that home prices are up 22.7% since 2012 due to the Federal Reserve/Wall Street scheme/scam. You have the government/establishment artificially jacking up home prices to fix the Wall Street balance sheets and then you have the government drones falsifying inflation data to show home prices only going up by 10% since 2012.
You have the government agency tasked with reporting accurate inflation data under-reporting rent and home price inflation by over 100%. Not exactly a rounding error. And the list goes on. In the real world of gas prices, weҖve seen a 30% increase in the price to fill up our vehicles since February. According to our fantasy loving friends at the BLS, gas prices have fallen by 10.8% over this time frame. Could they be a bigger joke?
Actually, yes they can. They are reporting natural gas prices falling 0.8% in the last month, when in the real world natural gas prices have skyrocketed by over 13%.
According to the Bureau of Lies & Scams food prices have not risen one penny in the last three months. Over the last year they report a barely evident 0.8% increase in food prices. I find that quite amusing, as I do the regular grocery shopping in our house and I do not see flat food prices. Even with cutting out overpriced beef, my weekly grocery bill is at least 5% higher than last year. The real world prices of some major food items blows a hole in the fake data being presented by the BLS.
I don’t know about the rest of the world, but food, housing, gasoline, utilities, and healthcare make up a huge portion of my budget. And those prices are rising at a 5% to 10% clip on an annual basis today. Janet Yellen is worried about deflation and is keeping interest rates near 0%. Is she lying or is she really that stupid and disconnected from the real world? I’d suggest we follow GEORGE CARLIN’S ADVICE.
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Thursday, April 28, 2016
Stories Of Despair
Stories Of Despair From The Forgotten People That The U.S. Economy Has Left Behind
By Michael Snyder
End Of The American Dream Blog
April 26, 2016
There is so much economic despair in our country today, but if you have a good job and if you live in a good neighborhood you might not ever encounter it. There really are “two Americas” in 2016, and they are getting farther and farther apart with each passing year. ON THE OTHER HAND, you have lots of people smiling in New York City these days because of the stock market boom, and property values have soared to ridiculous levels in San Francisco because of the tech bubble. But in between the two coasts there are vast stretches of forgotten people that the U.S. economy has left behind. In this article I am going to share some of their stories with you.
Because I run a website called The Economic Collapse Blog, I hear from a lot of people that are really struggling in this economy. Just yesterday, I posted an article entitled IN ONE OUT OF EVERY FIVE AMERICAN FAMILIES, NOBODY HAS A JOB, and one of my regular readers left the following comment on that article
After 5-6 some odd years I finally got a decent tech job that pays a couple of bucks more than typical fast food. For the first time in a long time I can say we are coming out of the black. But however, it’s a shaky recovery. If I lose this job at anytime in the next few years it will be devastating so Im taking the opportunity to win back my certs so that I can get a higher paying tech job.
Here’s to keeping fingers crossed
In many areas of the nation today, it is a real challenge to find a good job. According to the Social Security Administration, 51 percent of all American workers make less than $30,000 a year at this point, and you can’t support a middle class family on $30,000 a year. The American Dream feels like it has ended for millions upon millions of families, and this is leading to a lot of depression and despair.
I would like to share with you three comments that were recently left on a New York Times ARTICLE ABOUT DEPRESSION. In all three instances, the commenters link their BATTLE WITH DEPRESSION with the economy in some way
#1 But for me, I see another change that has affected me as I have entered the high risk age group. Over the years, as the economy dumps, as the businesses that have employed people in my region have cut staff, or just gone away, I have seen almost every friend that I have made in the last 30 years move away. My social network imploded.
For those who cannot easily recreate new sets of friendships, especially if they are un- or underemployed, and have fractured family relationships, there is little social support to help stave off depression. And for more and more people who are working, the push to work independently, not in an office atmosphere, creates even more isolation.
#2 I have been diagnosed and have been taking meds and in therapy for 30 years. And I was hanging in there until I lost everything. College educated, a professional for 30 years, I am now on Disability and Obamacare, both of which are on the chopping block. I watch the election process in terror and wonder what will happen to people like me. Medically I am bipolar, but now I am indigent, and if I cant access health care or a place to live, IҒm done. All the Prozac in the world wont change that.
#3 I became disabled ten years ago in my mid-forties. I live alone and have no family and no friends. I miss my career so much, and having a social life. Being disabled means having less money than ever, but with greater medical costs that ever. I think of suicide quite a bit. IҒm so lonely and poor. Then I got cancer a few years ago which is in remission but causing other health problem. Im doing my best to continue to afford to keep my dog. SheҒs only 4 and could live another 14 years. Im giving her the best life possible and I don’t want to leave her. She keeps me going and is the only love I have in my life. I wish there were more social service in the U.S. for people like me. If I ever get better, or win the lottery, I will be a fierce advocate to improve the quality of life for people like me who have fallen through the cracks. Im living a life that is hell on earth. I can see why some people in similar situations choose to “opt out” when every day is painful and lonely.
Those that insist that “everything is going to be just fine| are ignoring millions of stories such as these.
There are so many Americans that are going through enormous suffering in quiet solitude, and because they arenԒt marching in the streets they are forgotten about by the rest of us.
But of course not everyone suffers so quietly. Sometimes desperate people do desperate things, and all over the nation we are seeing rates of violent crime start to rise.
And not every person that commits acts of violent crime is looking to hurt people. Sometimes all they want is some food. The following comes from Natural News
According to a heartbreaking report by All Self Sustained, an elderly man was threatened with a knife last month by a man and a woman in a home invasion - the pair were looking to steal food.
71-year-old Luis Rosales answered the door of his New Jersey apartment in the afternoon and was confronted by a man and woman who were armed with an eight-inch kitchen knife. The pair forced themselves inside, threatening Rosales with death if he made too much noise.
The suspects used pepper spray to affect Rosales vision before ransacking his apartment and raiding his fridge, telling Rosales that they were hungry. They also took his wallet.
We are witnessing the slow-motion meltdown of society, and this is something that I talked about in my article yesterday and that I talk about in my new book entitled “The Rapture Verdict.”
Even with the “recovery” we have supposedly experienced, 47 percent of all Americans could not even pay an unexpected $400 emergency room bill without borrowing the money from somewhere or selling something.
And things are not going to be getting any better for the economy moving forward. The despair and desperation that we have seen so far are nothing compared to what is coming.
A tremendous amount of love and compassion is going to be required in the years ahead, because huge numbers of people are going to be really hurting.
So how will you respond when people all around you are in very deep trouble?
Will you “bunker” up, or will you be willing to reach out and help those less fortunate than yourself?
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Wednesday, April 27, 2016
How I Went From Middle Class To Homeless
Remember CNN Money’s article on AMBER AND ERVIN 2008?
In the eight years since the middle class is NO LONGER the majority.
Meet Joe and Linda.
They can easily be you and me.
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How I went from middle class to homeless
By Heather Long and Logan Whiteside
CNN Money
April 26, 2016
Unless “a miracle happens,” Joe will likely live in his 2001 Chevrolet Venture minivan by the summer. He removed the seats in the back to make space for a sleeping bag, his laptop and some clothes.
Soon to turn 61, Joe never imagined he would be in this position.
“When I was a kid growing up...America was the greatest place on planet earth. We were the envy of the civilized world. I never thought this could happen here,” Joe says. CNNMoney agreed not to use his last name because he worries potential future employers will Google him.
Joe’s big fear is that people assume he’s lazy. He wore a suit for his interview with CNNMoney and hid his eyes behind big dark glasses because he is ashamed his life has come to this.
Joe’s worked all his life, starting at age 11 pushing a broom around an uncle’s shop. He earned two associate’s degrees in electrical engineering technology and mechanical engineering technology and built a “blue collar” career as a technician, tester and machine operator. He loves factories and figuring out how things work.
Trump talks often about manufacturing job losses
When manufacturing jobs dried up in southeastern Pennsylvania, Joe moved to Minnesota. By the late 1990s, he earned $15 an hour, what he dubs a solid “lower middle class” wage. He figured he would work his way up, get a few raises and maybe buy a home. The American Dream seemed within reach.
Then his mother got sick. As the oldest child, he moved back to Pennsylvania in 1999 to care for her. Never married, Joe bought a trailer home with his mother. He managed to get jobs through temp agencies, but the work was never steady. He never earned $15 again.
Since being laid off in April 2013 from a manufacturing job, he’s worked on and off a total of only seven months. He has drained his savings and retirement accounts and his mother is now in a nursing home, funded by what remains of her life savings and Medicaid.
Presidential candidate Donald Trump, a heavy favorite to win Pennsylvania, brings up the plight of people like Joe often in his stump speeches. He recently pointed out that the Keystone state has lost “35% of its manufacturing jobs since 2001.”
Older job seekers seen as unemployables
Joe is hit by a double-whammy: his age and his blue-collar career. Workers over 50 have been dubbed the “new unemployables.”
Still hopeful he’ll get a job, Joe applies to a few positions a week. His barber acts as his recruiter, asking everyone who comes in the shop if they have heard of openings and will call Joe right away when he gets news.
“Yes, I am an older worker, but my life’s worth of experience could make me an asset to many places if I could only get the chance to show them,” Joe says. The few interviews he’s had are short. He feels no one wants to hire “the old guy.”
Joe’s mobile home is paid off, but he owes $483 a month for the lot rent in the mobile home park. He doesn’t have the money for May or beyond.
The hurting economy
Joe is one of 8 million unemployed Americans who remain without work despite a hiring surge in recent years.
The hurting economy still exists. Perhaps the most telling sign that the U.S. isn’t back to normal is the 44.7 million Americans on food stamps. Joe is one of them, something else he never envisioned in his life.
Before the financial crisis there were only 26.3 million people on food stamps.
I just want a job
CNNMoney has been in touch with several people who have gone from “getting by” to homeless—or nearly there.
Linda Norris of New Hampshire is in her early 50s. A college graduate, she built a career in the defense contracting field, working her way up to be a senior engineering manager. But between the recession and cuts to the defense budget, she has found herself in short-term jobs. After being laid off again last summer, she has exhausted her savings and had to move in with a friend, becoming effectively homeless.
“It’s really hard to live on $0 income,” says Norris, who spends her time scouring through job openings and applying for at least 10 each day. “I go to resume workshops, job fairs, networking groups. I do all that stuff.”
The low-skilled jobs just aren’t there
Even some younger workers are hurting. A couple in their mid-30s in Ocala, Florida has been living out of motel rooms and their car since last summer.
“From 2003 to 2008, I had done retail, salon work, and various low-pay customer service type jobs, some being contractual or temping,” J.P., in her mid-30s, told CNNMoney. “I bounced around all over the place in several industries. I just couldn’t find anything to stick.”
J.P. never finished college. She went back to school after the recession because people urged her to earn various Computing Technology Industry Association certifications, know as CompTIAs. Tech jobs were plentiful, they said.
“I am now certified, trained and ready to work in a new industry, but that industry has left the building,” J.P. says. Despite her certifications, she hasn’t been able to get a new jobs. She blames IT jobs going abroad.
Part-time workers now visit food pantries
A lot of people wonder why the unemployed don’t just get a job at a Walmart (WMT) or McDonald’s (MCD)? Those on the front lines of helping the poor and homeless say it’s not that easy.
At the Quakertown Food Pantry not far from where Joe lives, they served 715 families in March. It’s down a bit from the peak in 2013. but still uncomfortably high for a region that is growing.
“People have found jobs, but not full-time,” says Dawn Schaefer, who has volunteered at the pantry for eight years. “There’s a epidemic of part-time workers,”
In all her years at the pantry, Schaefer says what has changed most is the increase in the number of people coming who have jobs, but it’s just not enough for them to pay rent and eat.
“Most of the people we help would love to have a living wage job that they can support their family or themselves,” says Donna Berger, another food pantry volunteer.
Joe isn’t sure if he’ll vote in the Pennsylvania primary on Tuesday. He says America “took a wrong turn many, many years ago.” He’s not sure if anyone can get it back on track.
If he could do it all over again, he would go back and learn more of a trade like auto repair or plumbing.
“Even Donald Trump has to writea check to his plumber,” he says.
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Wednesday, April 20, 2016
Science Finally Proves Meridians Exist
What the Merging of Spirituality and Science means for you
By Azriel ReShel
Uplift Connect
April 20, 2016
For centuries the ancient wisdom keepers and healers in several traditions had a keen understanding of the energetic body. The healing traditions from China, India, Japan and Tibet, as well as other countries all spoke of energy channels, meridians or nadis along which the vital energy flowed.
Life was considered to be a bio-electrical and vibrational energy phenomenon and so health revolved around balancing energy through various means. Life existed because of life force and energy running through and animating the body, ensuring we can move, breathe, digest food, think and even feel.
Energy channels
This vital life force or chi, is composed of two kinds of forces, yin and yang, and flows along a sophisticated network of energy pathways, or highways, circuiting the body. Over 2000 years ago ancient cultures knew of the existence of these energy channels. They were called senђ in Thailand, nadisђ in India, meridiansђ, channelsђ or vesselsђ in China and Japan, and channelsђ in Tibet. In India, where many eastern healing arts developed, there were said to be 72 000 nadis or energy pathways. Disease is believed to be a blockage in the energy flow of these channels. A range of healing traditions, including acupuncture, acupressure, massage and yoga, are founded on the principle of the existence of energy channels or pathways, known as meridians, or nadis, running around the body in an expansive network.
While it may seem a little airy fairy to some to consider the energy body while we have flesh and bone, at source we are an energy field, embedded into another energy field. Our bodies are electromagnetic in nature and science has measured these frequencies with advanced machines, like EKGs and MRI scanning, for many years. Numerous studies demonstrate these energy pathways and points conduct electricity even when needles arenҒt used. And the massage technique of Shiatsu have been found to stimulate the same energetic effects. Similarly, Qigong,Tai Chi and the postures of yoga, have been found to increase electrical conductance at acupoints, yet science never believed in the existence of meridians until now.
Scientific research
Recently scientists at Seoul National University confirmed the existence of meridians, which they refer to as the PRIMO-VASCULAR SYSTEM. They say that this system is a crucial part of the cardiovascular system.
Previously, North Korean scientist Kim Bong-Han proposed that he had found meridians in the early 1960s. Dr Kim Bong-Han showed over 50 years ago that new tubular structures exist inside and outside of blood vessels and lymphatic vessels, as well as on the surface of internal organs and under the dermis. He believed they were the traditional meridian lines. The meridians were called Bonghan ducts or channels, after his research, but now the existence of this system in various organs has been corroborated by further research.
The current Korean researchers now believe the primo-vascular system is in fact the physical component of the Acupuncture Meridian System. And it has also been suggested that this system is involved in channelling the flow of energy and information relayed by biophotons (electromagnetic waves of light) and DNA.
The Korean scientists studying oriental medicine with biophysical methods injected a special staining dye which coloured the meridians. By injecting the dye onto acupuncture points, they were able to see thin lines. These did not show up at non-acupuncture point sites where there are no meridians. The researchers discovered that the meridian lines are not confined to the skin, but are in fact a concrete duct system through which liquid flows, and that this liquid aggregates to form stem cells.
Previously, scientists used a combination of imaging techniques and CT scans to observe concentrated points of microvascular structures that clearly correspond to the map of acupuncture points created by Chinese energy practitioners in ancient times. In a STUDY published in the Journal of Electron Spectroscopy and Related Phenomena, researchers used contrast CT imaging with radiation on both non-acupuncture points and acupuncture points. The CT scans revealed clear distinctions between the non-acupuncture point and acupuncture point anatomical structures.
The meridian system
There are 12 primary paired meridians and two single mid meridians, six yang and six yin. The yang meridians run down the body and the yin meridians flow up the body. Each meridian is also related to an element. Each meridian is most active at a certain time of the day or night and each meridian is influenced by an element or season.
The nature of meridians, in their elemental structure, and as vessels for the life force, show the intricacy and profound connection of our body at a cellular level, to the universe. We are intimately connected by the elements, energetic structure and flow of energy, to all life, at a cellular, physical level. Our earth is also said to have energetic pathways or ley lines, akin to meridians.
How are meridians related to health?
Our bodies need balance. A balanced flow or energy, not too much or too little, is conducive to good health. This is the same in the way we live our lives. Balance is paramount. Just enough food, water and a healthy balanced lifestyle. As the Buddha said: ғmiddle way or moderation in all things.
We can see this harmony and balance in life, as the balance between the energies of yin and yang Ԗ or more simplistically, masculine and feminine the two opposing and catalyzing energies of the universe.
Our health is vibrant if there is harmony and balance between these two forces in the body. If the balance is disturbed, and the flow of one of these forces becomes greater than the other then illness arises. These forces or energies flow through very definite channels in the body, or meridians, and these are the body֒s healing energy pathways.
In traditional Indian medicine, the meridians are expanded upon.There are nadis found within the physical body and these nadis make up the nervous system, the circulatory system, the digestive system, the respiratory system, the lymphatic systems, etc. Any blockages in these nadis can result in physical health conditions. Nadis can also be found in the subtle body where they carry thoughts, feelings, and nerve impulses. When these nadis are blocked, we lose our ability to feel, and connect deeply with others, the environment and ourselves. In the same way that veins and arteries are important for the body to function, nadis weave through our physical nerves and the matrix of consciousness that circuits the mind and self, supporting our physical expression from the otherworldly dimensions of existence.
When the flow of energy is blocked, it causes low energy and illness. Practices like yoga and meditation work on these subtle energy channels, supporting the flow of energy through the body. According to some ancient indian texts there are 350 000 nadis or energy pathways in the body. In traditional Indian medicine and spiritual science, the energies of the physical body, the subtle body and the causal body are said to flow through the nadis. Within this framework, the nadis are said to connect at special points of intensity called nadichakras.
The three most important nadis are those running along the spine: ida, pingala and sushumna. The Sushumna is the central channel of energy in the human body and it runs from the base of the spine to the crown of the head and carries kundalini energy, which is the primal evolutionary force. Kundalini is awakened through yoga and meditation and is said to lie dormant at the base of the spine. Activation of the kundalini leads to higher consciousness states. The aim of yoga is to broaden the sushumna and to unite the pathways. Purifying all three nadis leads to overall health, and wellness of body and mind, as well as spiritual growth. Various Pranayama techniques aid in helping to keep these nadi channels open.
If you are sensitive to energy and have had energy treatments, such as acupuncture, you may have felt streams of energy or a flow of cold or heat, for example, up the legs or arms. This is a freeing up of energy in the meridians and the flow of energy that is released when a blockage is removed.
There are many wonderful healing modalities based on the meridian system that support radiant health. By enhancing the flow of energy through the body, balance and health is achieved and we come in touch with our true selves. Acupuncture is a therapeutic modality used in China as early as the late stone age. It was used to treat all ailments affecting people. Acupuncture did not enter modern Western consciousness until the 1970s when China ended a period of isolation and resumed foreign political and cultural contacts.
The range of applications for acupuncture has grown slowly in the West, possibly because of the belief that it has no scientific basis. Perhaps now with the scientific proof of meridians, acupuncture will become more widespread for all ailments, along with other great healing modalities based on the energetics of the body, supporting more people to have vibrant health and wellbeing.
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Friday, April 08, 2016
Health Care Loans
A Modest Proposal: Securitizing Loans for Large Health Care Expenses
By Lambert Strether
Naked Capitalism
April 4, 2016
I saw this headline in Kaiser Health News ”MORTGAGES FOR EXPENSIVE HEALTH CARE? SOME EXPERTS THINK IT CAN WORK” so I said, “Nah,” and ignored it for a couple days, but then I clicked through to the academic paper Kaiser linked to if “academic” has any meaning, the times being what they are - and I couldn’t find any tells that it was a parody or some kind of sick joke, so yeah. It’s for real! The paper is called ”BUYING CURESD VERSUS RENTING HEALTH: FINANCING HEALTH CARE WITH COMSUMER LOANS” by Vahid Montazerhodjat, David M. Weinstock, and Andrew W. Lo, and it was published in Science Translational Medicine (STM), February 24, 2016. First, Ill present the author’s scheme, and after briefly showing how it conforms to THE SIMPLE RULES OF NEOLIBERALISM, Ill look at potential scope creep if the proposal is implemented, debt-cropping, and the possibility of predatory servicing. I’ll conclude with a 30,000-foot view of the schemes implications. (I’m afraid Im thinking of this post in terms of somebody whoҒs take out one of these loans a consumer patient - rather from the finance perspective that Yves would offer. That said, readers with more nuts-and-bolts knowledge of securization than I have like most of you - please feel free to chime in; thats why I’m describing the scheme first.)
The Scheme
First, lets talk about the scheme. STM summarizes it in one line:
Health care loans [HCLs] - the equivalent of mortgages for large health care expenses are a practical way to increase patient access to costly transformative therapies
(I’ll discuss costly “transformative therapies” under Scope Creep.) Here is the long-form version from the authors themselves:
We propose two frameworks that would each grant additional access to transformative drugs, but under very different constraints.
The first is a short-term approach that is immediately implementable: establishment of a special purpose entity (SPE) to fund expensive drug purchases. In this setting, the patient borrows from the SPE to make their co-payment, and the loan is amortized over a repayment period as with other consumer loans such as mortgages, credit card debt, and auto and student loans. The SPE would be financed by a pool of investors who purchase various securitiesŗbonds and stockissued by the SPE. These securities have different risk-return characteristics that appeal to a wide spectrum of investors, and the value of each security is derived from the underlying collection of consumer loans that generate cash flows during the periods when the loans are outstanding (fig. S1). This structure is known collectively as securitization and is actively used in all consumer finance products.
The second framework is a longer-run solution in which private payers and government agencies assume the debt. Such an approach will likely require new regulation or legislation to address disincentives for insurers to cover transformative therapies as well as potential unintended consequences on lower-income patients (Table 1); however, policy-makers have dealt with similar issues in other contexts [Like ObamaCare! Oh, wait!.].
When the authors say œimmediately implementable, they’re not kidding; in fact, theyre holding a conference on the topic this winter. KAISER AGAIN:
[Author] Lo said the MIT Laboratory for Financial Engineering and the Dana-Farber Cancer Institute will host a conference this winter to bring together drug manufacturers, insurers, patient advocates, financial engineers and others to discuss strategies to make expensive drug therapies more affordable. Health care loans will be on the agenda, he said.
Id be mighty interested to see who the ғpatient advocates might be; somehow I doubt that PNHP, let alone ACT-UP, will be invited.
Neoliberalism
Readers will remember RULE #1 OF NEOLIBERALISM - “Because markets.” (That’s a complete sentence, and is in itself sufficient justification for any market-based program, like HCLs.) The authors, as one might expect, conform to the rule:
A natural method for expanding access to curative therapies is to offer “health care loans” (HCLs) that spread or amortize the cost of cures over many years and thereby overcome the limitation in financial liquidity that currently reduces the affordability of curative therapies.
“Natural.” Really? What’s natural about it? As Roger Albin, Professor of Neurology at the University of Michigan, remarks in the only letter (SO FAR) responding to the article:
An alternative would be for Congress to appropriate a substantial sum many billions of dollars seems appropriate ֖ and purchase the rights of these drugs. The intellectual property would be assigned to a non-profit entity that would manufacture and distribute these drugs at cost. This concept is no more utopian than the authors proposal, which would require constant and costly regulation to ensure efficacy.
At this point, some institutional notes: The authors are affiliated with the MIT Laboratory for Financial Engineering, the MIT Department of Electrical Engineering and Computer Science, the Department of Medical Oncology, the Dana-Farber Cancer Institute and Harvard Medical School, the Broad Institute of Harvard and MIT, the MIT Computer Science and Artificial Intelligence Laboratory, and ALPHASIMPLEX GROUP LLC. They exemplify, in other words, ғBoston, Massachusetts, the spiritual homeland of the professional class, which is DESCRIBED very well by Thomas Frank in Salon:
To think about it slightly more critically, Boston is the headquarters for two industries that are steadily bankrupting middle America: big learning and big medicine, both of them imposing costs that everyone else is basically required to pay and which increase at a far more rapid pace than wages or inflation. A thousand dollars a pill, 30 grand a semester: the debts that are gradually choking the life out of people where you live are what has made this city so very rich.
Does that sound relevant to the topic of this article? And:
Perhaps it makes sense, then, that another category in which Massachusetts ranks highly is inequality. Once the visitor leaves the brainy bustle of Boston, he discovers that this state is filled with wreckage with former manufacturing towns in which workers watch their way of life draining away, and with cities that are little more than warehouses for people on Medicare.
Which proposal would help the people of those wrecked towns more? HCLs? Or drugs at cost? At this point, we might remember Context #1 of neoliberalism, where Rule #1 does not apply: “The world of the neo-liberal practitioners themselves; the academic guilds, media outlets[1], and think tanks,” like Harvard, MIT, Dana Farber, In other words, and sadly, Montazerhodjat, Weinstock, and Lo - and their conference attendees, except just possibly some of the patient advocates are far less likely ever to need to go out on the market for an HCL then the workers in wrecked towns like Fall River, and far more likely to be able to get an HCL at a good rate and pay it back, if they ever do.
Scope Creep
Now lets talk about the HCL and scope creep. KHN said the scheme was limited to “prohibitively expensive” drugs, and:
The health care installment loans [HCLs] that Lo, Weinstock and [Montazerhodjat] propose would be aimed at helping people afford “transformative therapies” that cure potentially lethal conditions such as cancer or hepatitis C. They’re not designed to pay for maintenance drugs that help people deal with chronic illness. Its easier for insurers to cover maintenance drugs because they’re purchased over an extended period of time, they said.
But whats ғexpensive? ԓProhibitively for whom? And why only drugs? And THE AUTHORS define the scope of their scheme this way:
Our more modest goal is to explore the feasibility of a private-sector approach to making expensive and highly efficacious [including curative] therapies more affordable right now.
But is there any real reason to think that limiting scope to either expensive drugs, or drugs at all, is realistic? The authors continually reference existing consumer loan schemes to show the effiicacy of their scheme. But all such schemes prove that scope creep is inevitable, and that the HCL financial infrastructure, once in place, will be available to any FIRE sector operator, including the bottom feeders. We have auto loans. And we also have loans for hubcaps. We have personal loans at banks. And we also have payday lenders. Is there a reason to think that HCLs won’t start with expensive drugs, and quickly morph into, say, high-interest loans for expensive surgeries? (The high deductibles under ObamaCare would seem tailor made to create such market opportunities.) Perhaps issues like these are why the Roger Albin writes, in his letter:
[The authors] proposal exhibits a considerable degree of naivet. Their proposed approach is precisely the type of well-intentioned expedient that tends to become a permanent and ultimately unsatisfactory permanent solution.
Well, “unsatisfactory” for whom?
Debtcropping
There’s a name for the sort of financial dystopia - Surely you don’t plan to take the kidney back? - I just described: “Debtcropping.” MATT STOLLER IN 2010:
Debt is not just a credit instrument, it is an instrument of political and economic control.
Its actually baked into our culture. The phrase “the man,” as in “fight the man,” referred originally to creditors. “The man” in the 19th century stood for “furnishing man,” the merchant that sold 19th century sharecroppers and Southern farmers their supplies for the year, usually on credit. Farmers, often illiterate and certainly unable to understand the arrangements into which they were entering, were charged interest rates of 80-100 percent a year, with a lien placed on their crops. When approaching a furnishing agent, who could grant them credit for seeds, equipment, even food itself, a farmer would meekly look down nervously as his debts were marked down in a notebook. At the end of a year, due to deflation and usury, farmers usually owed more than they started the year owing. Their land was often forfeit, and eventually most of them became tenant farmers.
They were in hock to the man, and eventually became slaves to him. This structure, of sharecropping and usury, held together by political violence, continued into the 1960s in some areas of the South. As late as the 1960s, Kennedy would see rural poverty in Arkansas and pronounce it ґshocking. These were the fruits of usury, a society built on unsustainable debt peonage.
Today, we are in the midst of creating a second sharecropper society.
If you want to see how debtcropping will play out with HCLs, take a look at how the authors discuss default (in the context of problems their secondӔ framework would have to solve:
Limitations on default. Since the passage of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, consumers with student loans are prevented from defaulting by excluding them from bankruptcy proceedings except in cases of undue hardship.Ӕ This feature of the student loan market has received mixed reviews from various stakeholders. Some argue that it is essential protection for consumers who are unable to afford the legal expense of bankruptcy proceedings. Others counter that it is tantamount to indentured servitude and subsidizes lenders by reducing default risk at the expense of borrowers and taxpayers. Almost by definition, many patients face undue hardshipӔ hence, preventing those with HCLs from declaring bankruptcy is unlikely to be either practical or socially acceptable.
And:
In alignment with the move toward value-based reimbursement (11), we propose that payment of the HCL continues until the debt is repaid, the patient or payer defaults, or the benefit from the drug ends, whichever occurs first.
Well, its definitely good that HCLs, unlike student loans, would be dischargeable in bankruptcy. That said, the incentives seem a little weird. If the HCL is for a ғcurative drug, isnԒt the incentive for the consumer patient to get cured and default? (And, if so, surely thats a fundamental problem with a market-based solution.) Or are we saying that a consumer patient only enters the (health care) program after a credit check? And what will the terms of the HCL be? For example, as NC readers know, your Medicaid payments get clawed back from your estate if you’re over 55. Would HCLs permit terms like that? Suppose the collateral for your life the HCL is your house, and you get in trouble on the payments. In a sane world, youd go to your HCL servicer for a workout. However, as we know from the mortgage crisis, SERVICERS WERE INCENTIVIZED against workouts - they’re bespoke - and so (or because) it was simpler just to seize peoples homes. Will HCL servicers be any better? Dubious, since existing servicers will probably move into this new market. Finally, as far as “the benefit” from the drug ends, who decides in case of conflict? And will side effects be included as net benefit? Suppose (say) the drug cures my heart condition, but I go blind as a result and can’t work. Must I then default?
To be fair, the authors are aware of the fallout from the mortage crisis. They write:
Last, it is appropriate to raise concerns about any application of financial engineering techniques to health care, especially because securitization was chief among the techniques involved in the most recent financial crisis. Although this powerful tool is actively used in many markets today and plays a critical role in financing mortgages, student loans, consumer credit, and other major business expenditures, securitization can still be abused if the proper protections are not present. Thus, regulatory oversightincluding risk-retention requirements for HCL securitization issuers and risk transparency for HCL investorsחis essential for the creation of robust and sustainable HCL funding markets. To argue that securitization is simply too risky without a feasible alternative is to relegate patients who could otherwise benefit from HCLs right now to the status quo.
I think the authors need to get out more. Mortages and student loans are debtcropping, pure and simple. We dont need more of that. Well, ғBoston might, but Fall River doesnԒt. (And as far as no feasible alternative,Ӕ I bet if the authors would put their personal networks at the disposal of single payer, wed have a real solution tout suite. Further, one might also add that financial burderns are stressors in themselves, and so the medical benefits accruing to individual consumers patients donҒt net out to the degree the authors believe they do. Finally, our system of profit-based health care is lethal, but the authors putatively short term plan reinforces it, and might indeed, via scope creep, become permanent. If the authors want to talk about ғrelegating patients, they need to consider all patients, not simply those who would benefit from the treatments they consider.)
Securitization
Finally, here’s what the authors have to say about securitization. They ran simulations for their therapy of choice:
We simulated the performance of a hypothetical HCL fund for financing HCV therapy co-payments in a context that assumes payment by the insurance company of $44,000 for each of 12,500 patients toward the cost for HCV therapy; the remaining $40,000 is borne by the patient as a co-payment.
Ive gotta say, they lost me at the $40,000 co-pay (!!). If course, if I were cynical and paranoid, IҒd imagine that my friendly HCL loan officer would offer me a second loan, at more onerous terms, for the co-pay. To resume:
On the basis of anecdotal evidence, it is likely that the actual charge for curative therapy is substantially lower than $84,000. However, we intend to show that even if patients were required to pay such high co-pays, the therapy could still be affordable under the appropriate financing structure. In addition, a $40,000 co-pay is much lower than the current alternative for patients with early-stage HCV; for such patients, coverage is typically denied, so the cost is the full list price.
Patients would obtain HCLs from funds raised by the SPE [Special Purpose Entity] through various tiers of bonds and equity that total $500 million (Fig. 1A). Default rates were calibrated to typical values for consumer loans by borrower-income levels. We considered three scenariospessimistic, baseline, and optimisticחthat cover a range of probabilities for HCL default based on the borrowers income (Fig. 2, A and B, and fig. S2). These default models were derived by using student loan data (Supplementary materials, table S1 and figs. S3 and S4). Studies on interferon and ribavirin treatment for chronic HCV infection have reported that all-cause mortality rates for patients with a sustained virological response - which equates to cure in nearly all casesare not statistically different from those of an age-matched general population (12-14). Therefore, we used general-population mortality rates as a proxy for patients who receive new HCV-directed therapies (15, 16). More than 75% of the HCV-infected population in the United States are baby-boomers (that is, born between 1945 and 1965), so we used U.S. Census Bureau projections for the baby-boomer cohort (fig. S5) (17). The estimated survival curve and annual death probabilities are depicted in Fig. 2, C and D. Our estimated 10-year survival rate (89.3%) is close to the rates reported elsewhere (12, 16, 18).
We used 10 million Monte Carlo simulation paths per each scenario of HCL default probability to evaluate the performance of the HCL fund, assuming that individual HCLs have 9-year terms with a 9.1% annual interest rate.
If I wasn’t lost at the $40,000 co-pay, I’m certainly lost at the 9.1% interest rate.
The term and interest rate of the HCLs were selected to be close to those of private student loans and to avoid too high a payment burden on borrowers - based on the patient population income distribution - without jeopardizing investment performance. In practice, the interest rate on HCLs could be determined specifically for each borrower. However, for simplicity and transparency, we used a single interest rate across the HCLs in the portfolio to represent an average over the population. The SPE is financed by senior and junior debt yielding current market rates (2.1 and 2.5%, respectively) and by equity that receives any remaining cash flows after the senior and junior debt payments are made (Fig. 1B) (details of the simulation parameters and risk-return computations are provided in the supplementary materials).
Overall, the risk-reward profiles across all three scenarios are within an acceptable range to attract investors.
Two questions: 1) Readers who are also investors, would you invest in this? Why or why not? 2) What happens when HCLs are repackaged and resold as Collateralized Debt Obligations? Suppose the pharma company making the HCV drug takes a tranche in the funds raised by the SPE. Are their interests really aligned with the patients?
Conclusion
Again, Im taking the viewpoint of the poor schlub who has to put up his house to save his life. Or the poor schlub who җ after scope creep takes out an HCL at the Walmart Clinic to fix his back pain, and then finds out when the treatment is done that he still canגt lift, or work. Of course, the authors say you dont have to pay if thereҒs no benefit, but the authors didnt reckon on the arbitration clause in the HCL, or that the arbitration process is rigged in favor of Walmart. And so on.
The scheme is so well-worked out on an academic level that it practically glitters, and IҒm sure the authors would have a talking point in response to each point I make here. Nevertheless, I feel that the authors, as very proper Bostonians, are at the very best naive at what will happen when their plan collides with real patients, real originators, real serviceres, real investors, and real traders.
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