About once every three months I go through medical bills and figure out who did what wrong. Often the insurance company screws something up and even more often the provider does not dot an “i” or cross a “t” and the claim gets denied. Even more often, the provider forgets to adjust down their price to the insurance company negotiated price. So I decided to keep track of how much I was overbilled this cycle.
Since August, I accumulated bills for which I owed $483.26 after my insurance company paid, and I was over-billed by an additional $172.79. That’s a 36% overage. It took me about 2 hours with all the information in front of me to slog through these bills and write little notes to each provider. This is an enormous waste of time and money.
For a long time I thought that the insurance companies negotiating a lower price than private pay customers is exactly backwards. The insurance companies require the providers to spend a ridiculous amount of time doing things they don’t get paid for. AFAIK, a private pay person who pays as they leave should pay less than someone paying with insurance, because there is less overhead.
Monday in Acroyoga we tried the 3-Headed Dragon. Fortunately somebody had a camera.
Today I rented a bike. On my way somewhere else, I was riding by the Intercontinental Phoenician Hotel (the most expensive hotel in Beirut which is also home to parliament members and other big wigs that don’t want to get shot) and decided it would be fun to ride the bike in and have a look around. I went in the main entrance for cars. After explaining that I really was going into the hotel rather than around it, the guard cheerfully scanned my bike for explosives, then I waited for the crash barrier to retract, then I pulled up at the front door and the front door staff got the giggles. They all thought it was fantastic that I rode a bike to the Intercontinental and immediately offered me complimentary “valet parking”.
Next I went into the hotel, put my backpack through the x-ray machine and walked through the metal detector. Once inside I headed for the pool balcony to check out the view. The view is a bit surreal. There a bunch of very handsome new buildings intermixed with buildings which were obviously bombed, shelled, and shot to hell. Behind the Intercontinental and still visible from the pool is the husk of the Holiday Inn. In front are a few less famous buildings shot to hell, plus to a very exclusive yacht club in perfect shape.
I don’t know if this is the same yacht club, but the very popular former prime minister Rafiq Hariri and several of his aides and bodyguards were assassinated in front of the St George yacht club with a massive car bomb in February 2005, widely suspected to be the work of the Syrian government. A month later a million Lebanese protested in the main square (Martyr’s Square) demanding that Syrian troops leave Lebanon.
Holiday Inn with holes, Intercontinental in pink
View from the pool at the Intercontinental
Rafiq Hariri and other staff killed the same day
A million Lebanese marched a month later demanding Syria to pull its soldiers out of Lebanon
When you discover that something has gone badly wrong I think it is nice to see if you can easily prevent the same thing from happening again. I noticed that all the banks in Lebanon are flourishing now. Come to find out that they had a rather more minor financial crisis a few years back and the government banned derivatives. Consequently, their banks are rock solid and turning a profit. Digging a little deeper past the knee-jerk reaction “just ban derivatives”, I ask why did banks get in such trouble with derivatives? Because they didn’t know what they were really worth. There is no standardized accounting method for the derivatives that got all these banks into trouble. Banks get a bunch of special privileges and are regulated at minimum because ordinary deposits in banks are usually government insured. As a trade-off for the special benefit of receiving deposit insurance from the government I think it would be fair to say that banks cannot own or trade in any form of security for which there is a not an industry-wide accounting practice. You could even go so far as to restrict banks trading in securities which have an accounting method approved by a neutral-ish government agency like the very well-respected Government Accountability Office (GAO) in the US.
I am personally very curious what the balance sheet of every US bank would look like if the government just declared that the value of all “toxic securities” was officially zero until further notice and nobody was allowed to trade in them. Would any of the banks look OK if they didn’t have the liability of some of these derivatives? Would some banks look even worse? If there is nominal value still in these securities, the government could declare their ownership illegal, make loans based on the nominal value, and then forgive part of the repayment of these loans in exchange for the nominal value of the seized assets.
I want to shift gears and talk briefly about bankruptcy. The idea of bankruptcy is that it protects someone from their creditors. However this means that if those creditors traded fairly, they get screwed. Perhaps a useful place for the government to step in and offer money is to offer *creditors* of bankrupt companies a grant or loan (free insurance perhaps) to cover their costs. My idea is that when the economy goes in the crapper, we should reward companies that were still in business doing something useful first. They should not be penalized for selling something to a deadbeat company. I would much rather see my taxpayer dollars go to this kind of creditor payment insurance than to a big bank that did something really dumb, or a big dumb reinsurance company….
I heard today that AIG executives were caught on camera having their second luxury retreat since after they received taxpayer bailout money to the tune of $150 Billion. The previous retreat, just days after the bailout and estimated to cost about half a million, was reported by NPR and ABC among others. Note that AIG currently has a market capitalization under $10 billion, but it needs a $85 billion bailout.
The Fed also said today that they would not use any of the $700 Billion bailout money approved by Congress to buy illiquid derivatives, “toxic” securities allegedly poisoning the financial system (which was the original motivation given for requesting the money). Not a single dollar of this money has been spent buying these “toxic securities”.
Since this brilliant bailout plan is working so well, I am not keen on bailing out US auto makers either. I would love to make sure that the employees still have a good job, but I don’t think these companies are going to do anything with the money other than throw good money after bad.
