Yesterday, I had the 'opportunity' to examine America's healthcare system (and don't forget-- we now have the Republican system of 'managed care,' -- HMO's, PPO's, and other 'choices' that they pushed for in 1994 as an alternative to Universal Healthcare) from the inside. My wife had to go the emergency room. We got there at about 12:00 noon. We got out just before 7:00. And the majority of that time was spent in the waiting room (not fun since we had a nine year old with us).
Now, I don't begrudge the hospital for the wait, since just like you I would prefer that they do it right rather than quickly, but just a rhetorical question: When arguing against universal healthcare in 1994, didn't Republicans argue that it would produce long waiting lines in hospitals (at least we were in Flagstaff-- there have been reports of people coming into emergency rooms in large cities and waiting fourteen hours to be seen)? So it looks like they've got that one down.
They also argued back then that Universal Healthcare would restrict your choice of doctors and other healthcare providers. Well, speak again-- as one who has been forced to change providers at least once rather than 'go outside the system,' and pay an arm and a leg. And we haven't even gotten to what happens if you need a prescription which is not in the formulary-- a prescription which I need is not covered, so I pay over $80 for a month's supply-- and that's a bargain relative to what some people have to pay, for drugs that cost hundreds of dollars a month. Looks like they nailed 'restricting your choice' down with their system just fine.
Then, there was an argument that a bureaucrat, rather than a doctor, would decide whether to approve a procedure. Hmmm, my wife was denied a procedure (under our old healthcare plan) several years ago, by a bureaucrat, not a doctor, which contributed to her being in the emergency room yesterday. And in other cases, people have been denied care that led directly to their deaths--- so Congress and President Bush, in their infinite wisdom, 'fixed' that problem-- by fixing what few loopholes there were in existing legislation that protects your HMO from the consequences if they make that kind of decision (remember the President preferred a 'Texas plan,' but then never sent a bill to Congress to rectify the problem after the 'Texas plan' was thrown out in court). So, if you are denied coverage, you can appeal their own decision to your HMO (that'll be a fair unbiased review, won't it) and then that is the end of the line. Yes, they've nailed down the worst nightmare scenario under their opposition to Universal Healthcare, we have that today too.
And then, there was the question of cost. I posted some on this here, but the fact is that our healthcare system, far from saving money, is now the most expensive in the world, where we spent 15.3% of our Gross Domestic Product on healthcare in 2003 (the most recent year for which figures are available) and it is increasing at a double digit clip, while countries with Universal Healthcare systems spent substantially less (under 10% in a number of countries, including France and not much over it in places like Canada and Germany) in the same year, with lower rates of growth. So the idea that it would cost more, well you see what happened to that one (just wondering, their governments are not running it to make a profit, while our system is managed by for-profit companies, you don't suppose that might have something to do with why it costs more?)
Oh, yes. And taxes. Well, right now, I pay the full premiums for my wife and kids (my own is paid by my employer). This amounts to about 16% I pay and about 6% my employer pays of my contract (i.e. gross, not counting overtime, which is unpredictable), including health, dental and vision. So overall, that comes out to 22% of my contract (and that doesn't even take into account even a penny of co-pays, deductibles or percentages of payments). You will note above that healthcare costs 15.3% of the GDP of the U.S. and generally about 9-13% in countries, so it is hard to argue that Universal Healthcare would make taxes go up more than what we are already paying (by local standards here, I make more than most people). Very likely the overall combination of taxation, health premiums and other payments to providers would go down, way down for most people.
Finally, there is quality. They have argued that we had the finest healthcare system in the world. And it is true, that IF you can afford it, you can get it here. However, even that is changing-- recently we saw the first face transplant in France. Now, the point isn't that it happened in France, but that it did not happen in America-- it used to be that the first ANYTHING technological was done in America (especially involving medicine). And as far as healthcare for ordinary people-- well, if the system is so bad in places like Canada and western European countries, then why do they live longer than we do? Maybe it's the balmy climate? Or is it that people go to the doctor when they need to, instead of when they can afford to?
Maybe it's time to give another look at Universal Healthcare. Because every argument they bring up, we will have a great response: That is what we have now.
UPDATE: Dorsano over at Night Bird's Fountain put up a great post on The Minnesota Universal Health Care Coalition.
27 comments:
Loved your article. I am an RN and work for a managed Medicaid company as a case manager. I've worked on both sides - used to do consulting for a large hospital system here appealing denied claims (with pretty good success)to insurance companies - and now I work for an insurance company. Our client is the State of Ohio and we administer the health benefits to a portion of the Medicaid population. I can see both sides ESPECIALLY in the case of managing medicaid or medicare dollars. Now that more cuts have been made by our esteemed representatives in Washington its important to manage those limited dollars wisely. I must say that in our organization there has never been any pressure to limit or deny coverage. Our emphasis is spending it where its needed and making sure its needed. I KNOW commercial carriers are a different story. Bonuses are based upon financial goals being met. I pity the lay person trying to navigate through the insurance industry. It's complicated. Some by design some by regulations. I remember the Repubs during the Clinton administration saying "There's no crisis" Tell that to the 46 million Americans without healthcare. In Ohio we have 1.8 million uninsured and 1.3 million of those are working folks. I am happy to help anyone I can navigate the system.
I hope your wife is OK, Eli - I assume she is since you're posting.
I know you're focusing on the decision by congress not to publically finance health care but how HMO's came to play the role they do is interesting.
Paul Ellwood convinced Nixon and much of congress (including Ted Kennedy and other Democrats) that "greedy" doctors were the cause of rising health care costs - that was back in the early 1970's.
The HMO act was passed in 1973 and it led to almost 13% of Medicare benefits being subsumed by HMO plans (privatized).
Here's some info on HMOs. There are a number of different kinds actually. They are defined based on the relationship between the health plan and the provider:
-Closed Panel HMO
-Staff model
-group practice model
-Open Panel HMO
-Individual Practice Association
-Network Model
-Mixed Model
but they are all based on the "greedy" doctor model where accounts/nurses for the health plan negotiates with doctors over what treatments can be perscribed.
True, about the history.
But they really took off because of the whole 'managed care' philosophy, which is what the Republicans pushed in 1994 as their 'alternative' to HMO's.
My wife has to go to the doctor tomorrow and get a biopsy. After that, I will know more about how she is doing.
EAPrez:
Then look at it this way: Your organization, essentially working for the state, is more compassionately administered than private companies.
So why SHOULDN'T we have public health care for everyone?
An appeal to compassion (claiming that somehow the government isn't) is usually the last thing that conservatives come up with, but obviously you are an example of that not being true. Instead it is private companies who are much more likely to be the scrooges in the scenario.
I hope your wife will be okay, she is in my thoughts.
Sometimes I think we should go to the Canadian way of Insurance.
Eli,
I noticed your silence yesterday. I am sorry that you had to spend so much time at the hospital.
Please know that your wife and your family is in my prayers.
Let us know if there is anything we can do.
eaprez: Our client is the State of Ohio and we administer the health benefits to a portion of the Medicaid population.
We have the same arrangement in MN, eaprez. In the early 90's when HMOs took off, counties in MN were given the option of letting HMOs administer benefits or to continue to do it themselves.
Those who chose not to outsource the responsibility are delivering more $ of health care than those who did not - there overhead is less.
One of the short term objectives at the grass roots in MN - which is largely Green and Democratic (though not entirely) - is to get the HMOs in MN out of the Medicaid delivery business.
Does that mean you're going to start voting Republican? :)
Lizzy,
thanks for your thoughts.
Can you do anything? How about work to elect a Congress that will seriously address health care reform?
Hey Eli... I am sorry but I am doing a shout out to DORSANO... it's me, girl on the blog... come by my new blog. ;)
I hope all turns out well with your wife, Eli. My father and two friends all had bioposies done recently as part of the diagnostic process, and all of their tests came back negative (i.e. no cancer). I wish your wife's results come out the same.
I take issue with your description of "managed care" as the Republican alternative in 1993, though. They really were opposed to implementing the Democrats' radical change alternative rather than endorsing the status quo, and the reasons for this had more to do with legislative tactics than with ideological preference for the status quo. They'd have supported even more privatization than existed in 1993 had they been trying to seriously reform the system, but they realized (accurately imo) that if they offered any competing alternatives they would lose out on what they considered their most important issue: whether or not to create a government-sponsored (single-payer) health insurance system which everyone would belong to. Had they proposed alternatives the Democrats would either (1) have found enough acceptable parts of it to steal and thus gain enough Republican votes for passage, or (2) have crafted a compromise which moved the health-care system significantly towards a single-payer system (the more likely result imo). Instead, by proposing nothing, the Republicans and their allies in the medical world made the debate whether the Democrats' plan was better than the existing system - and then exploited people's fears about radical changes to help defeat the Democrats' plan.
[And what goes around comes around. The Democrats' successful opposition to the Republicans' Social Security overhaul this year used exactly the same playbook as the Republicans' successful opposition to the 1993 health insurance overhaul.]
The "do nothing" option which the Republicans defended was preferred to the "radical change" option the Democrats proposed in 1993, but more importantly, the underlying conflicts among the various interest groups (patients included) were seen to be so irreconcilable that essentially nothing has been done in the dozen years since (the Medicare Drug Plan being the only real exception). I suspect that enough people have had negative experiences with the existing system that they would be willing to revisit the idea now (I know I would), and to hell with the whining of insurance and drug companies. The idea that an individual health insurance policy runs $4k-$5k annually (before co-pays, drug costs, etc.) and insurance for a family of 4 is about $12k is outrageous; with proces so high it's no surprise that the #1 issue in most labor negotiations is what percentage of the insurance costs the employers and employees will pay.
I've written in a couple of places that this is an issue I would like to see the Democrats should push in 2006, but that they need to frame it in such a way so as not to scare off moderates and centrists. Admittedly, I don't have an answer as to how to do that, but I suspect moderates would be receptive to the idea of a system where basic medical needs would be met by a single payer but where extraordinary needs would not. The distinction between "basic" and "extraordinary" will vary from person to person, no doubt, but I would expect "basic" should include regular GP visits and emergency and trauma care, as well as treatment for common diseases.
but that they need to frame it in such a way so as not to scare off moderates and centrists
Medicare for everyone.
Express your hopes and fears, Indy. I want to hear what you have to say.
I want real change and I need you to help.
Dorsano, the problem with Medicare is that it's also a broken system, and for many of the same reasons that the overall system is broken. Overall medical costs are soaring, there's no way to get a handle on costs, and the government wants retirees to pay more while retirees don't want to pick up those costs (and for many, they *can't* pick up those costs).
When I think "single payer" these days I'm thinking of a system where basic care coverage is the same for everyone and there would be no need for co-pays or a lot of the other administrative BS that the multitude of providers require now. Administratively, this would probably be set up like Social Security, with payroll deductions and a mandatory (uniform) employer contribution, but it could be set up to be funded out of general revenue (a less satisfactory approach imo). A single payer system won't really address the soaring overall costs (esp. drugs), either, but it would put all workers on an equal footing in terms of knowing what percentage of the costs they'll be paying, which would end a major bone of contention in the health care debate.
Admittedly, this idea may still be too much for most moderates to stomach. However, I went on COBRA a few years back after leaving a company that paid a very high % of insurance costs and was astounded at what I had to pay for what turned out to be unused insurance, so I've become very sympathetic to workers when their corporations try and cut the percentage of costs they're willing to pay.
Eli addressed a lot of the negative arguments against a single payer system in his post, but what about the advantages? First, there's the "known contribution" element: you won't be fighting your employer over your share of the premiums every time there's a salary negotiation (or worse, finding your job outsourced if you can't reach agreement). Second, there's the relative simplicity of paperwork: doctors and nurses can spend more time treating patients than filling out forms. Third, there's the safety net if you get laid off, or have serious medical problems which require expensive care, etc. that are an improvement over most insurance plans which maximize their annual payouts at a fairly low level (and *all* of them drop you if you can't pay the premiums). I'm sure there are others, but that's just a few I can think of quickly.
Unfortunately, a single-payer system won't address the soaring costs in and of themselves, and any arguments made which claim this can be punctured quite quickly. It will, however, provide a uniform medical platform which will have more leverage when dealing with these problems than the present fractured system does. That's one reason the drug companies would likely fight such a proposal, since even if it doesn't directly limit their ability to charge whatever they can, the system could be used to do so (and no doubt would be sooner or later).
There's a lot there, Indy - too much to respond to in one post.
I think we need to start with definitions.
Single Payor (I'm not necessarily advocating this)
Medicare is single payor - except it's missing two things (sort of) that single payor proponents consider defining
The first is the ability to negotiate bulk purchases of RxDrugs and equipment and supplies.
Second - the fact that it's not empowered to set capital budgets - this is "sort of" - it does establish fees for service which is arguably just as good as setting hospital capital budgets.
Regarding the "Medicare is broke"
As of 2005, the HI trust fund has a projected 75-year actuarial deficit equal to 3.09 percent of payroll compared with last year's estimate of 3.12 percent.
That calculation factors in the rising cost of health care
If Medicare has to pay higher fees to hospitals for service, so will everyone else - including HMO plan participants and self insured plan partipants
If "Medicare is broke" then the entire system is broke and the efficiency of Medicare should really be judged vis a vis the alternatives.
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It's important to deferentiate between political rhetoric and economics.
The cost of running Medicare is 1% to 3%. Contrast that to the cost of the managed care programs which is anywhere from 15% to 30%.
The "Medicare is Broke" rhetoric comes from the fact that trust fund is invested in U.S. government securities - just like annuities and other liquid investments.
Those bonds need to start being redeemed beginning around 2020 - that's not Medicare's fault.
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maybe the best thing to do at this point is to talk about Medicare.
Should we drop it you think?
To feel that I'm BSing or spinning or twisting statisics?
The reason I ask is because I door knock to engage people on this issue and I'd like to know how I'm coming off.
Though I'm arguably better in print than I am in person because I'm an ugly old fart.
I'll address your second comment first, Dorsano. I said that Medicare is a broken system, not that it is broke (although it does have more pressing financial problems ahead than Social Security does). It is broken in the same way that the "managed care" system is, in that there's no way the system can currently control costs in its present form. Ultimately, any health care system revamp is going to have to address that issue. And I'm not so sure that Medicare *is* a single-payer by your definition since there's so much they don't cover that most retirees who can afford it get supplemental insurance to cover the gaps in Medicare.
That brings me to the definition of single-payer as I used it above. I was thinking of single-payer more in the sense of there essentially being one payer for medical procedures, not simply one company which covers insurance. Iow, there would be co-pays of $0 or extremely close to it for medical care, and there wouldn't be upside limits on coverage ("Sorry, insurance only covers the first $25K, and after that it's *your* problem. Here's your bill. Pay up.") as a result. This approach, unfortunately, would infuriate conservatives (since it is socialized medicine, what Republicans derisively accused the Democrats of proposing in 1993) and may still be too scary for moderates to swallow as well. However, I view the provision of basic health care for all (not just those who can pay for it) as a viable national objective. Maybe I'll be kicked out of the moderates' club for saying that, but it's how I feel. I know Medicare is viewed as the safety net for the poor, so the most destitute *can* get care, but what about the working poor and middle class who don't have employer-sponsored insurance?
I'm not so sure that Medicare *is* a single-payer by your definition since there's so much they don't cover that most retirees who can afford it get supplemental insurance to cover the gaps in Medicare.
I actually think we pretty much agree on this but I'll restate things as how I refer to them:
"Single Payor" means three things really:
1). There is one payor (as you said) - every hospital and doctor submits bills to one authority (probably regional processing authorities like the IRS has).
2). The payor is empowered to negotiate for bulk purchases. This could be done on a regional basis. There is a resonable argument to be made that the U.S. government has too much clout when negotiating - though pure Single Payor advocates don't abide by that.
3). The payor has the authority, to negotiate budgets with hospitals for capital equipment outlays just like utility regulation boards negotiate with utility companies. Hospitals and doctors are ALWAYS paid the fee for their service but the assumption is that trust fund allows for capital expenditures and it is those funds which are budgeted.
It's true that most Single Payor advocates want to eliminate the gap in Medicare coverage - but strictly speaking, what is and isn't covered is not the most important part of the definition of "single payor".
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Definitions: Medicare is the trust fund/health care program that we all have paid into since 1964 with payroll tax decutions (1.45% on our part matched by our employers) to cover our health insurance costs when we retire - every senior has contributed to this plan and every senior I've ever talked to, rich and poor alike, are glad it's there.
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Medicaid - is welfare - largely directed at kids - that is the program for "the destititute" and that program is covered by general tax revenues.
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If we can move on after this - then maybe we can try to identify what is driving health care costs up for Medicare, HMO's, and all the other mechanisms we use to try an parcel out health care.
What do you think?
I'm willing to start if you like but I DON'T want you to tune me out because I NEED you to help me in this.
Indy voter and Dorsano:
Enjoying reading your back and forth.
She will have to go back in in a few weeks. The doctor who was supposed to get the biopsy is being uber-cautious, so he drew blood first (which I am certain that nothing will be much different from her blood sample than the sample from Monday, except that I will get two laboratory bills instead of one).
As to the fact that HMO's and PPO's were the 'status quo' in 1993-- yes, they were, but at the same time, Republicans endorsed managed care as the panacea to avoid all the problems they claimed would occur with single payor. So I think it's fair to point out that it has not.
As to Medicare, a big part of the problem is the prescription drug benefit passed last year-- and the tragedy is that it commits us to spending trillions of dollars, not so much to help seniors (my mother for example will receive minimal help, and thinks all the 'choices' are too darn confusing-- and she at least still has full use of her faculties), but rather to give a huge boost to the drug companies (and not surprisingly, the primary sponsor of the bill, Billy Tauzin of Louisiana, retired last year and was promptly rewarded with a very well paying job as a lobbyist for, yes, the pharmaceutical industry).
Beyond this, I would mention that the numbers I cited in the post are actually much better than they look there, since in addition to that, we still pay for Medicare and Medicaid. Of course under single payor, both of those programs would be axed as an unnecessary duplication.
Dorsano, I don't want to focus just on Medicare (I see you asked that in an earlier comment) since the real cost problems it faces are essentially the same as the entire medical system faces, imo. I will note that my father's reaction to the new Medicare Drug Plan is similar to Eli's mother's, and he's additionally annoyed because the really nice medical coverage that came with his retirement has been scaledback to "conform" with the new rules.
One thing about overall health care costs is that they're going up dramatically everywhere, not just in the US. That says to me that the underlying reason they're jumping has more to do with increased demand - both in the quantity of existing medical services demanded and in the quantity of ailments which are being treated. Yes, more people live longer and (presumably) better lives as a result of medical advances, but there are real costs associated with choosing to live longer. Cancer survival rates have risen for decades, and continue to rise, thanks to these services. Ditto for AIDS, cardiopulmonary diseases, and many other ailments. Advances in the treatment of ailments affecting the elderly means they live longer and are more active, but paying for these treatments costs money which Medicare and private insurance plans created 40-70 years ago didn't set aside money for. Etc.
In the end, I believe that effective cost control will require that *really* tough decisions be made regarding who has access to what services, something that neither liberals, nor moderates, nor conservatives, are willing to address - for obvious reasons, imo. I think that the current system will eventually lead to a two-tiered health care system whereby the wealthy and the lucky among the middle class will have insurance (and access to decent health care) while the poor and the unlucky among the middle class will not, and frankly that's not an outcome I prefer to have occur.
That says to me that the underlying reason they're jumping has more to do with increased demand - both in the quantity of existing medical services demanded and in the quantity of ailments which are being treated.
That doesn't quite follow logically for a great many expenses. For example, assume CT scan equipment costs $1,000,000 per unit. If 10,000 people use it, it costs $100 / patient. If 1,000 people use it, it costs $1,000 / patient.
The same applies not only to a whole lot of equipment but the hospital building and the clinic itself.
One big component of the rising cost of health care is the overhead and waste incurred by managed care plans.
15% (estimate) of health care premiums paid to HMOs does not go into health care - it goes into health care management.
Contrast that to Medicare which is 2% to 3%.
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In the end, I believe that effective cost control will require that *really* tough decisions be made regarding who has access to what services
you seem to be saying that we should deny access to medical advances to control costs.
Do you really believe we should do that?
Here's one macro view of the system as a whole -
33 cents of every dollar spent on health care in the U.S. is paid by Medicare and Medicaid (including State funding)
Here are different ways one might interpret that statistic:
* 1/3 of health care in the country is publically financed.
* 1 out of every 3 hospitals is funded with public money
* 1 out every 3 doctors is paid with public funds.
Public money has played a significant role in building our health care system and in advancing the state of health care.
We simply wouldn't be were we are today without Medicare and Medicaid.
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And there are other public monies that feed indirectly into health care also.
Dorsano, in your CT scan example you're leaving out the labor costs, which are a significant fraction of the cost. There are probably maintenance and calibration costs which also would increase with machine usage. But you're also implying that the charge for that particular piece of equipment should be based on the number of people who use it, which is contrary to how any responsible manager would set his/her prices. Rather, the manager would make a best estimate as to how often that machine would be used and set a charge for it appropriate to its expected level of usage.
You should have pasted the rest of my sentence in the other paste or you wouldn't have asked what I find to be a somewhat insulting question. Noone wants to make decisions about who gets service and who doesn't, and that's the main reason why demand and costs keep rising, irrespective of whether the local medical system is privately- or government-run. Significantly more people globally want CT scans, antibiotics to treat infections, treatment for cancer, medicine for heart disease, hospice care, etc. than did 10-20 years ago and there will almost certainly be further significant increases in demand for those services in the next 10-20 years. On top of that, there will be new drugs and surgical procedures which are developed, for which there will be demand, and those new drugs and procedures aren't going to be at the cheap end of the cost scale. Demand for medical services is growing faster than both global income and global population, and unless that underlying fact changes it's a pipe dream to think that in the long term prices can be controlled.
Switching to a government system will probably cause a short-term drop in costs, which I think is what you've been getting at, but it won't solve or even directly address the long-term issues with cost escalation. I mostly favor making a switch to a government system for two reasons: (1) it should end the ongoing arguments over who pays what percentage of insurance / medical costs; and (2) it would ensure that everyone has access to medical care. I think such a system could also have more leverage with drug companies, medical equipment manufacturers, and the like to help curb abusive price increases, but I don't think it's capable of solving them.
in your CT scan example you're leaving out the labor costs, which are a significant fraction of the cost.
It's not a pricing model - the point is that when the cost of infrastructure is spread across a broad base it's cheaper for everyone.
As we both say here:
But you're also implying that the charge for that particular piece of equipment should be based on the number of people who use it
$ Invested/"Units sold" = break even price
Rather, the manager would make a best estimate as to how often that machine would be used and set a charge for it appropriate to its expected level of usage.
"appropriate"?
$ Invested/"Units sold" = break even (appropriate) price.
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The other point is that the more people that pull out of the system, the more it costs those remaining to keep the lights on.
Demand for medical services is growing faster than both global income and global population, and unless that underlying fact changes it's a pipe dream to think that in the long term prices can be controlled.
I'm not sure that's the case (that costs will outpace our ability to pay) - you're only looking at the demand side there. There are many efficiencies to be had on the supply side.
But I'm willing to start by wasting as little as possible of what we do spend - as are you it seems.
I didn't mean to be insulting - I figured that you feel the same way that I do - that's why I asked.
You see an unsoulable delema (the one I quoted above)
Maybe it is - but we don't have to make those kinds of choices for quite awhile yet it seems to me.
So tell me Indy - how should I change my approach when I talk to the next person?
One interesting feature here:
On the Navajo reservation that starts just a few miles from my house (where doctors are scarce and far between), a lot of people go to see medicine men instead of doctors. It's not that they don't trust doctors, but the medicine man will 1) not make them wait so long, 2) won't require them to pay more than they can afford, and 3) won't turn them away due to a lack of health coverage.
Now, I will say that tribal medicine men probably do know quite a bit, and if I were to suddenly fall very ill somewhere out on the reservation and there was a medicine man there who offered to help me, then I would certainly accept it.
However, what I can also see happening with health care in the future if nothing is done, is that more and more 'psuedo-practicioners' will begin treating poor people, and sooner or later we will be back to the days of 'snake oil salesmen,' where people who have (or profess to have) medical knowledge will make a living travelling around and pushing quickie cures for the sick (thank God drug dealers haven't thought of this angle yet, but it's only a matter of time until they do). We already see some of that with the multimillion dollar 'supplement' industry, but I suspect the return of the classic nineteenth century charlatans are not too far off in the future.
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