Hospitals and Insurers Didn't Want You to See These Prices. Here's Why; Was Chamath predictive of SPAC decline?; Fourth wave peaking; Vaccine effectiveness; Five billion doses

By Whitney Tilson

Friday, August 27, 2021

1) There are so many things wrong with our health care system that I hesitate to wade into this cesspool, but it's really important to discuss on many levels: economic, political, social, medical, etc.

To summarize the problem, we spend nearly twice as much as the average developed country – even before the pandemic, it was a staggering 18% of our GDP – yet the system delivers health outcomes in a range of areas – percentage of population covered, quality of care, premature death, life expectancy, maternal and infant mortality, etc. – that range from middle-of-the-pack to near the bottom among developed (and even less-developed) countries. Here's a good summary: U.S. Health Care from a Global Perspective, 2019: Higher Spending, Worse Outcomes? Excerpt:

  • The U.S. spends more on health care as a share of the economy – nearly twice as much as the average OECD country – yet has the lowest life expectancy and highest suicide rates among the 11 nations.
  • The U.S. has the highest chronic disease burden and an obesity rate that is two times higher than the OECD average.
  • Americans had fewer physician visits than peers in most countries, which may be related to a low supply of physicians in the U.S.
  • Americans use some expensive technologies, such as MRIs, and specialized procedures, such as hip replacements, more often than our peers.
  • The U.S. outperforms its peers in terms of preventive measures – it has the one of the highest rates of breast cancer screening among women ages 50 to 69 and the second-highest rate (after the U.K.) of flu vaccinations among people age 65 and older.
  • Compared to peer nations, the U.S. has among the highest number of hospitalizations from preventable causes and the highest rate of avoidable deaths.

For more, see the cool charts here: How does the quality of the U.S. healthcare system compare to other countries?

In short, our health care system is an embarrassment...

I was reminded of this when I read this recent New York Times article, which takes a look at the bizarre, opaque, seemingly random pricing for various procedures at different hospitals: Hospitals and Insurers Didn't Want You to See These Prices. Here's Why. Excerpt:

This year, the federal government ordered hospitals to begin publishing a prized secret: a complete list of the prices they negotiate with private insurers.

The insurers' trade association had called the rule unconstitutional and said it would "undermine competitive negotiations." Four hospital associations jointly sued the government to block it, and appealed when they lost.

They lost again, and seven months later, many hospitals are simply ignoring the requirement and posting nothing.

But data from the hospitals that have complied hints at why the powerful industries wanted this information to remain hidden.

It shows hospitals are charging patients wildly different amounts for the same basic services: procedures as simple as an X-ray or a pregnancy test.

And it provides numerous examples of major health insurers – some of the world's largest companies, with billions in annual profits – negotiating surprisingly unfavorable rates for their customers. In many cases, insured patients are getting prices that are higher than they would if they pretended to have no coverage at all.

2) This chart reminded me of what I wrote about Chamath Palihapitiya on February 24 after reading the Bloomberg article shown on the chart, The King of SPACs Wants You to Know He's the Next Warren Buffett:

Speaking of Buffett, my observation over the past two decades is that anytime a "new economy" guru compares himself to – while also trash talking – the Oracle of Omaha, the market soon punishes his hubris!

3) The lead item in the e-mail I sent yesterday to my coronavirus e-mail list (which you can sign up for by sending a blank e-mail to: [email protected]) had some very good news that I wanted to share. Here are a few excerpts from it (you can read the entire e-mail here)...

I could be wrong, but I think the nasty (and completely needless) fourth wave we're experiencing may soon peak – you can see the leveling off in this chart of cases (source):

Note that hospitalizations and deaths will likely peak roughly one to two weeks and three to four weeks, respectively, after cases do:

Here's more evidence of a possible peak (source):

If you want proof of how effective the vaccines are, look no further than this study (source):

[Some eagle-eyed readers noticed that the partially vaxxed have lower infection rates than the fully vaxxed. I suspect this might be due to: a) statistical noise... b) partially vaxxed folks being younger... and/or c) the vaccine wearing off for some people (hence the need for boosters). The real story here, of course, is that unvaccinated people are 29 times more likely to be hospitalized with COVID.]

Ah, but what about the risks? Neither I nor anyone else has ever never claimed that the vaccines are 100% risk free – rather, that based on everything we know, nearly everyone age 12-plus is far safer getting vaxxed.

And every day that goes by, this becomes more true. We crossed a milestone yesterday, as more than FIVE BILLION vax doses have now been administered worldwide. I referenced this in an e-mail to a friend who said his 14-year-old daughter got vaxxed and now has excess menstrual bleeding, so urged me to dial back my vaccine advocacy. I replied:

I am really sorry to hear about your daughter. I hope she gets better soon.

But you were not wrong to get her vaccinated. When it comes to critical decisions like this, you have to follow the data and assess the odds correctly, not fall back on anecdotes – because then what about my good friend's 11-year-old son who's really sick right now and my other good friend's dad who refused to listen when my friend begged him to get the jab – and just paid for his foolishness with his life on Saturday...

I have always been clear that the COVID vaccines have risk – but today, we passed five billion doses administered worldwide. And, needless to say, no vaccine campaign in history has been more closely scrutinized. If they were causing widespread complications of any sort, we would know by now.

Keep in mind that bad/unusual things happen to a certain percentage of people every day. Therefore, the law of large numbers means that it's a statistical certainty that lots of people (when the denominator is five billion), soon after getting vaxxed, will have bad things happen to them shortly afterwards – which, of course, people will attribute to the vax.

You and I have the analytical background to understand that 1, 2, 5, or 10 anecdotes isn't data. But that's not how most people think...

As I wrote in my July 31 e-mail:

I would wager that the average person isn't able to fully, rationally assess the difference between a 1-in-1,000 risk of catching COVID and suffering severe consequences (even death) vs. a 1-in-100,000 chance of suffering severe consequences (even death) from taking one of the COVID vaccines.

Both are extremely unlikely, so what's the difference, right? Well, for 999 out of every 1,000 individuals, that's in fact correct. So best to stick with the "safe" option of doing nothing – what psychologists call "status quo bias."

But I trust you can see that, when we're talking large populations, the vaccination option is 100 times better/safer!

So I appreciate you sharing your story (and I'm truly sorry about your daughter), but I won't be dialing it back because of a few anecdotes, when large-scale data so overwhelmingly supports everyone getting vaxxed (for example, see this article: CDC study shows unvaccinated people 29 times more likely to be hospitalized and More Kids Are Hospitalized With COVID-19).

Again, to read the rest of the e-mail, click here.

After sending it out, one of my readers sent me a link to this powerful video, COVID-19 through the eyes of an unvaccinated patient, which is quickly going viral. It should be required watching for anyone who is unvaccinated.

It was posted two days ago by Hillcrest Health System, which wrote:

Right now, about 92% of our COVID-19 positive patients are unvaccinated. What they experience when they enter the hospital is preventable. One vaccine can be the difference between a mild case of COVID-19 and severe illness or even death. And, if you are lucky to survive severe COVID, you may experience long-term side effects that impact your daily life and those around you.

Take the first step and talk with your doctor about the vaccine. Please, get vaccinated today.

Best regards,


P.S. I welcome your feedback at [email protected].

Whitney Tilson
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About Whitney Tilson

Prior to creating Empire Financial Research, Whitney Tilson founded and ran Kase Capital Management, which managed three value-oriented hedge funds and two mutual funds. Starting out of his bedroom with only $1 million, Tilson grew assets under management to more than $200 million.

Tilson graduated magna cum laude from Harvard College with a bachelor's degree in government in 1989. After college, he helped Wendy Kopp launch Teach for America and then spent two years as a consultant at the Boston Consulting Group. He earned his MBA from Harvard Business School in 1994, where he graduated in the top 5% of his class and was named a Baker Scholar.

Click here for the full bio.