[quote=SK in CV][quote=bubba99]
I read your response, and I have to ask “did you ever take accounting or finance?’ and if you did, did you fail the course?.
So your wife is a health care provider with no embedded cost. You missed the point. Hospitals do have “big” capital costs. Physicians are not the big driver of health care costs. Hospitals, and equipment are.
Using your words “nonsensical”, do you really believe that an aspirin costs $40.00 – now that is nonsensical. Where do you think the cost comes from – the $15.00/hour janitor that cleans up? Or the $200,000/year doctor?. No it comes from capital and lease costs.
Is your first language english? or are your comments based on just being studid?[/quote]
As to accounting and finance, yes. Did quite well. Went on and got a masters degree. Spent most of the last 30 years working as a CPA, consultant (including medical financing consulting), and as an economist.
As to the costs….well, these are your words.
[quote=bubba99] The expense is coming from huge amounts of embedded capital costs, the interest on those capital expenditures, and profit on those assets. Finance, Insurance and Real Estate (FIRE) is the real driver of medical “Access” cost.
The access provider borrows from its huge cash flows to buy equipment and buildings from its non-regulated subsidiary, pays interest to the non-regulated sub, and we get stuck with double the “cost”. The bankers are robbing us in a more creative way.
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And I was just pointing out that your assertion is false on its face. Some costs are associated with the things you noted. Of course an aspirin doesn’t cost $40. But that’s only a small piece of total medical costs.
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You said “Exaggeration works fine in comedy, it has no place in rhetoric.” Both I and Socrates disagree, comedy and absurdity are essential in reductio ad absurdum arguments. You know Socratic Dialog?
And since the $40 dollar aspirin caught your attention, let me try another absurd cost. $10,000/day for a hospital stay. I can stay at the best hotel in a great room for $1000/day. It follows that the other $9000 is coming from something other than physical surroundings – bed, room, food, etc. The nurse I share with 50 other patients, and the 3 doctors I share with the same 50 patients also have salaries. Say their total salary is $700,000 per year (loaded cost). Divide $700K by 240 working days, then divide by 50 patients/day and you are left with $58.33/day of labor cost for my day in the hospital.
You can double the salaries, cut the number of patients in half, reduce the work days to 200 and you are still left with only $280/day. Even cut the cost in half to $5,000/day and you are still left with an un-explained $4000-$8000/day. Do the cuts again and you are still at only $560/day.
And this doesn’t even consider the $40 aspirin, nor the $50 blanket. What sort of magic does GAAP have to explain this sort of disconnect in price vs. traditional expense items – perhaps it is some other mark to fantasy type of accounting or SPV that accounts for the “hidden” costs.
