| Wealth Stealers: The Health Industry |
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Her dentist, Dan A. Knellinger, offered her a solution: a special credit line to cover her bill. She took it.
The loan company paid Dr. Knellinger immediately but charged Gannon an annual interest rate of 23% that went up to 33% if she was late on a payment. The minimum monthly payment for her dental work was $214.
"It is eating up my Social Security check," she told The New York Times. "I'm worried I'll be paying this until I die," she said.
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About six years ago I hurt my neck wrestling. I had it checked out by two prominent South Florida neurosurgeons.
The first one told me that I had "broken" my neck and that I was "a bump away from becoming a paraplegic." He recommended surgery. The total cost would have been almost $50,000.
The second one told me I was perfectly okay. He gave me a sheet of paper with illustrations of some exercises he recommended.
I decided to believe the second doctor. So far, so good.
In this series so far, I've introduced you to three distinguished groups of suit-wearing wealth stealers: bankers, brokers, and lawyers. Today, I want to spotlight another group whose members wear white jackets.
I'm talking, of course, about doctors—the people we count on to keep us healthy and perhaps even save our lives.
It may be hard to think of a medical doctor as a thief, but I want you to try. Imagine your doctor holding a stethoscope to your heart with one hand while picking your pocket with another.
Hold that thought.
Most doctors are honest, hardworking, and caring. But that doesn't mean they aren't inadvertently stealing your wealth. They are really just the front line of tens of thousands of wealth stealers working for a multi-billion-dollar industry that includes governmental agencies, major medical groups, insurance companies, and of course, the drug and surgical industries.
Fact: A married couple in their 60s can expect to incur bills totaling $220,000 for medical care before they die, according to a study by Fidelity Investments. If you throw in over-the-counter drugs and dental care the figure approaches $250,000.
A quarter of $1 million is a lot of money. But your medical bills can quickly climb much higher than that if you, or someone in your family, has a serious accident or gets a serious illness. Even people with relatively high-net worths—say $1 or $2 million—can see their wealth reduced to nothing in a matter of years.
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As you move into middle age, you begin to deal with relatively minor but chronic issues such as acid reflux, joint and back pain, the threat of heart disease, adult-onset diabetes, cancer, etc.
This is when our medical costs start rising. The typical American 50-year-old is taking ulcer, thyroid or pain medication, statin drugs, etc.
And then when you enter your 80s, the cost of medical treatment soars. I've seen various estimates on this—so I can tell you that there is some variation—but it looks to me like the typical U.S. citizen spends more than one-third of his lifetime medical spending during the last two years of his life.
And for many Americans, those last two years are miserable—in and out of the hospital, pumped up with drugs… if not laid out on a bed with tubes running in and out their bodies.
Most technologically-based aspects of life—transportation and communication, for example—have become relatively cheaper during my lifetime. As a percentage of your income, it costs you less to drive across town today than it did in 1950. The same is true for calling a friend or sending a letter.
But medical care has become much more expensive. A lot more expensive.
Is the extra expense worth it?
We like to think that we have access to the best health care in the world and the best medical options ever available. But the fact is that if you subtract for infant mortality and AIDS (two very controllable causes of death), the average lifespan of an American or European is barely a year older than for an African.
Thirty years ago, I lived in Africa for two years. I lived in Chad, one of the poorest countries in the world. Chad was poor but because (at that time) it was a relatively peaceful country, there weren't major nutrition problems—the kind that have arisen in many parts of the world when war displaces hundreds of thousands of people.
The Chadians I knew were poorer than I but just as healthy. Their parents were lean and energetic. Their grandparents looked to be as healthy as my grandparents at the time. The same is true of Nicaragua, one of the poorest countries in Latin America. Most people spend virtually nothing on medical care, yet they are generally just as healthy as their American guests.
What I'm saying is that 90%-plus of the poor people I lived with in these countries were as healthy as my American friends and I—yet they weren't spending loads of money on all sorts of drugs and medical procedures that are routine in the U.S.
This begs the question: Do we really need all the medical care we are paying for?
I've also read hundreds of studies and dozens of books that examine this very question: How effective are modern drugs and surgical procedures compared with natural remedies?
My conclusion is that much of what we believe to be effective is not. And that includes some of the most expensive treatments.
Health care is a serious issue. When you are in pain, you want immediate relief. When a loved one gets "bad news," you get scared. You fear the worst. If there's a possible "cure," you want to take it, regardless of cost.
But often the solutions we are given are unproven. Many of them have negative side effects. Some of them are seriously dangerous.
I'm not talking about experimental drugs and medical procedures. I'm talking about common protocols that we believe are safe and effective. I'm speaking about drugs and procedures touted by governmental agencies, medical associations, and the mainstream media.
Sit back. Some of what I'm about to tell you may shock you.
Heart bypass surgery is considered by many to be one of the wonders of modern medicine. You can go into surgery on a Thursday afternoon and be home watching TV for the weekend. Bypasses today are about as common as tonsillectomies. Half a million bypass surgeries are performed each year.
Yet, astonishingly, there is no scientific proof that they work.
According to Julian Whitaker, MD, in the U.S. there have been only two truly controlled trials of the values of bypass surgery. The first, a Veteran's Administration hospital study published in 1977, was a highly sophisticated five-year study with about 600 patients, all of whom had blockages. Half of them had had heart attacks and were typical bypass candidates. They randomized the people into two groups of 300. Three hundred had the operation and 300 didn't. At three, four, and five years later, they found no difference whatsoever in the death rates between the two groups. The three-year death rate was about 4% per year for both groups.
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They also found that there was no difference in the death rate whether the patient had one, two, or three blockages. Five and 10 years later there was still no difference. Sixteen years later they found that those who had the surgery were doing worse because the operation actually alters the blood flow in such a way that it begins to weaken the heart, so that having a bypass makes the next heart attack more dangerous.
Angioplasty, another extremely popular medical procedure for heart patients, has never been proven to be effective. Worse: The death rate of the procedure is roughly four times the expected death rate of the disease.
Here are some other facts that might shock you:
| • Beta-blockers—one of the most widely recommended drugs to calm the heart down during early stages of a heart attack—do no good whatsoever. More than 26 studies have proven this is so. Yet, until recently, they were regularly prescribed by doctors all over the U.S. |
| • More than a half million Americans per year undergo arthroscopic surgery to correct osteoarthritis of the knee, at a cost of $3 billion. Despite this, studies show the surgery to be no better than sham knee surgery, in which surgeons "pretend" to do surgery while the patient is under light anesthesia. It is also no better than much cheaper, and much less invasive, physical therapy |
| • Doctors routinely prescribe cough syrups to help reduce coughing. Yet not a single cough remedy has ever been proven to be more effective than a placebo. To make matters worse, cough syrups have been proven to be harmful to children. Most doctors are unaware of that fact. |
| • Melanoma, the skin cancer that kills you, is not caused by exposure to the sun. Exposure to the sun (in reasonable amounts) in fact is probably the best thing you can do to reduce your chances of getting melanoma. |
I could go on, but you get the idea.
Much of what we believe to be true about "modern medicine" is a sham. Many of the most popular drugs and surgeries do not work and have negative side effects.
Yet they are still prescribed. Everywhere. Every day. And by doctors who should know better but don't.
There are at least several reasons for this huge amount of misunderstanding. One reason is that many of the studies that investigate new drugs are financed by the pharmaceutical industry. The doctors who do the studies and report on them are paid consultants.
Another reason is that the mainstream press doesn't understand medical statistics. If a particular drug or procedure is said to result in a "33% less chance" of having something happen, health reporters believe that means that many fewer people will be affected. What they don't understand it that a 33% drop is likely to be insignificant because it is a relative figure. Instead of having a 6% chance of getting cancer, for example, the drug or procedure results in a 4% chance.
A third reason is simply wishful thinking. We all want to believe that drugs and surgeries can help us—even if there is no science to support that fact.
And the fourth reason is that the drug and surgery business is huge and hugely profitable. In 2011, global spending on prescription drugs topped $954 billion. The United States accounted for almost half of that.
We need doctors. We need medicine. But the medical industry is not about what we need. It is a huge, multi-billion-dollar industry dedicated to selling drugs and surgery.
Doctors are not saints. Nor are they savants. They are almost always hard-working people who do the best they can with the resources they have.
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Medical care is a serious issue. And it can be very expensive. A single accident can cost you hundreds of thousands of dollars. Longer-term treatment can eat up $1 million or more.
As I said earlier, the amount of money you spend on medical expenses is likely to become significant in your middle years and very costly in your 70s and 80s.
What you don't want is to have your golden years ruined by medical costs— especially expensive procedures that are unproven, unnecessary, and possibly dangerous.
There are several commonsense steps you can take now to manage your health care costs rationally:
1. Make an assessment of your current medical insurance. You need to understand what it covers, what it doesn't and how much you will be required to fork over from your own bank account.
You should also know what to expect from the government under Obamacare. Because this program is brand new, there will be plenty written about it in the coming year. Disregard your feelings for Obama or the program—positive or negative—and understand the financial costs, risks, and coverage that apply.
2. Develop a financial plan for long-term care. By long-term care I'm talking about assisted housing, hospitalization, and hospice care. I have limited my discussion here to medical expenses, but long-term care is a related issue that can be very expensive too. We will cover planning for long-term care in another issue.
3. Become familiar with end-of-life procedures. Find out what is involved and how much it costs. Have a frank discussion with your spouse and/or family. Create a document that explains exactly how you want to be treated in terms of interventions.
4. Identify and appoint a health surrogate—someone to observe and direct any medical care you might need if you end up in the hospital. Trusting a friendly doctor is fine but you can't trust everything about hospital treatment. Having someone who cares about you and understands your needs to be your representative is an invaluable benefit.
5. Learn as much as you can about any health problem you and your loved ones may be having or are likely to have in the future. Find out what the most common treatments are and then find out if they have any serious scientific support behind them. Investigate alternative therapies, especially natural ones that do have scientific support.
Best,
Mark
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