3 Things 11-28

Thing One Our Healthcare System Is Not Designed With The Consumer In Mind The headline of this post is probably not a surprise to anyone who’s had to deal with an expensive illness or injury. But if there was ever a case where stating the obvious might have some benefit, this may be it. As to why, we offer the example of Ashley Harrison of Hazelcrest Illinois. Ms. Harrison, who makes around $24,0000 a year, got very sick and ended up with a substantial medical bill: The Wall Street Journal provides some details: “…Ms. Harrison’s experience started when she went to the Advocate South Suburban emergency room late on Dec. 20, 2019. Then 30 years old, she was weak, unable to eat and had difficulty breathing. She was diagnosed with a possible case of acute promyelocytic leukemia, according to physician notes, and later transferred to another hospital. Her brief stay at Advocate South Suburban generated a big bill: $36,733.13. She had two forms of insurance—Medicaid and a private plan—but neither covered the cost. Ms. Harrison said the private plan told her the hospital was out of its network. A spokeswoman for the Illinois Medicaid agency said it retracted its payment at the request of the hospital. In a written statement, she said, “there can be lots of honest, good-faith complications with claims,” but that the patient shouldn’t have been billed…” It turns out that as a low income patient being treated at a nonprofit hospital, Ms. Harrision had a right to be informed that there were options, other than out of her own pocket, for getting her bill paid. See more from the WSJ below: “Federal rules require nonprofit hospitals to disclose the aid programs and make information about the policies available on their websites. They are also supposed to include a conspicuous written notice on billing statements and offer written summaries of the policy as part of the intake or discharge process. Advocates say patients are often unaware of the option. One 2020 poll of 820 registered voters in Maryland, commissioned by a consumer group, found that 29% of all respondents, and 50% of Black respondents, weren’t aware of bill forgiveness for low-income patients.” As perhaps a helpful tangent to this story, we ask you to recall former Defense Secretary Donald Rumsfeld who famously opined on the problems of decision-making in the face of “known knowns,” “known unknowns” and “unknown unknowns.” The famous social scientist, Steve Raynor added to that list a fourth category he called “unknown knowns” — the things we actually know but pretend we don’t. He is said to have called this uncomfortable knowledge. The patients may be unaware but the hospitals and people working in the billing departments, are dealing with unknown knowns. Such being the case, the patients/consumers are dealing with billing agents that are trained with scripts that purposely exclude any talk of outside financial assistance. If their rights to financial aid are disclosed at all, and in some cases they aren’t, that happens after the bill collectors have exhausted all means of getting the patient to pony up. This sordid setup is not likely to change any time soon. What can change is our knowledge of it and how to deal with it. Our suggestion in a few words is this: Question and negotiate all your medical bills - no matter where you fall on the income scale.

Thing Two Safe Havens Can Be A Bad Idea “Ultimately, a risk-free investment doesn’t exist”. That’s was the bit of wisdom offered up by Phillip Chao, principal and chief investment officer at Experiential Wealth in Cabin John, Maryland. He made the remark as a part of a conversation he was having with a CNBC columnist about overall investment activity in October. The reporter observed that: “…Investors sold out of target-date funds and large-cap U.S. stock funds in October in favor of “safer” ones, such as stable value, money market and bond funds, according to Alight Solutions, which administers company 401(k) plans. For example, stable value and money market funds captured 81% and 16% of net investor funds in October, respectively, according to Alight data. Money market funds are thought of as a “cash equivalent,” while stable value funds generally offer a steady rate of return. Retirement savers seem to have been spooked by wild swings in stocks last month, after having already suffered big losses in 2022 amid worries tied to inflation, interest rates, geopolitical turmoil and other factors…” In response to that, Chao made the following observations: “Selling stocks out of fear is like making a bad driving decision. If you panic while driving, you’ll get in an accident, I think most investors are reactionary, instead of acting in a purposeful, well-intentioned way. And because of that, they tend to be all over the place when markets fall…” For emphasis, Chao cited research from 2018, a year in which there were two big market corrections, that showed the average investor lost twice as much as the S&P 500. And then for extra emphasis, the CNBC reporter added that: “...The S&P 500 Index, a barometer of U.S. stock returns, shed nearly 6% in early October, from the market close on Oct. 4 through Oct. 12. However, it rebounded over the course of the month, ultimately closing out October with a roughly 8% gain. Investors who sold their stocks early on would have missed that rally. If they didn’t buy back in, they would have also missed a 5.5% pop on Nov. 10, the biggest rally in over two years, as the stock market cheered lighter-than-expected inflation data…” The moral of the story, once again, is that investing is a long-term game and it’s alright (perhaps even advisable) to seek professional help with it if it makes you skittish. It’ll likely be well worth it in the long run.

Thing Three Just A Thought “It is one thing to show a man that he is in error, and another to put him in possession of truth” – John Locke