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yobnoc

Social Security

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17 minutes ago, SethInMI said:

 

The article I read focused on the require / allow question, with one economist saying it would only work if it was required, otherwise adverse selection would push down the benefit amount (the only people who would sign up are healthy and genetically pre-disposed to long lives). The advantage would be the annuity amount would be more generous than if a private insurance company offered it as there would not be a profit motive.

It was an idea that piqued my interest, as I'm in the adverse selection group (my grandparents lived into their 90's), and have no desire to outlive my 401k. I can help myself by not taking SS until 70, but an additional way to shield very old me from destitution would be good. 

 

I'm curious as to how much you believe that big government would keep their mits off your money as financial leverage?

Why not throw in good money after bad?

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The Canadian version of Social Security is called Social Insurance, which is perhaps a better way of thinking about the issue.  Social Security is insurance against being left absolutely destitute in the event total disaster occurs.  Disaster can take many forms.  You may think you have a secure pension, then discover that the plan has been mismanaged and all your contributions are gone and your contract with your employer is unenforceable.  For example, when Detroit declared bankruptcy everybody who had spent their lives working for the city (teachers, police officers, municipal workers, and on and on) found their pensions were cut drastically.  Their situation was made worse because the city was exempt from paying into social security, so retired city workers did not have that to fall back on.  It has become quite common for pensions to disappear when employers declare bankruptcy.  Another disaster is to become disabled at a young age, when you have not had enough years of work to save enough to retire on,  Yet another could be to have a child who turns out to be severely disabled.  No-one who has a child expects to be confronted with medical and care expenses totally hundreds of thousands of dollars a year, but this does happen to some unfortunate people.

If you think about social security as insurance, rather than as an investment, you can perhaps see the benefit a little more clearly.  I do not expect to collect on the fire insurance I pay on my house.  You might say I'm foolish to pay for insurance I will probably (hopefully) never collect.  If I invested that money wisely, it might eventually grow to a larger sum than my home and all its contents would cost to replace.  On the other hand, if my house burns down tomorrow, actuarial calculations of the hypothetical value of an investment thirty years from now will not help me.

If we were to make social security purely optional, we would have a situation very similar to allowing people the option of not paying for medical insurance, as was the case before the ACA and also the situation the Republican party is doing it's best to return us to.  The issue here is that some (many) people will choose not to be insured, or not be able to afford insurance, yet many of those people will incur medical expenses.  No-one plans to get cancer, or fall off a ladder, or (fill in the blank).  (Similarly no-one chooses to have their employer go bankrupt and hand over the pension funds to creditors who never spent 5 minutes sweating on the assembly line.)  This forces society to make a choice: step in and provide at least life-saving treatment at taxpayer expense, or allow large numbers of people to die of treatable conditions.  As far as I can tell, the Libertarian position is "sucks to be them".  That might make some sense from a purely selfish fiscal perspective.  However, although I don't know how to express this as a financial balance sheet, I would suggest that a "society" that so lacks any sense of empathy that they would turn their back on people and refuse to acknowledge any value in them other than the size of their investment portfolio is so morally bankrupt that it is not a society at all.  There is more to human societies than just a collection of dog-eat-dog winner-take-all investment strategies (where the best strategy of all is often to be born to rich parents).

Social security was created for a purpose, and that purpose was not the desire of some bureaucrat to invent a new way to pilfer money from people.  It was the moral outrage of seeing people who had worked hard all their lives being left destitute in their old age, especially after the Great Depression wiped out so many businesses, banks, and personal savings.

One last point: is we were to make social security purely voluntary, we would have to ensure that every job paid enough to allow people to take care of their needs, the needs of any children they might have, and have enough left over to invest for retirement.  How much would that be?  It would depend on what rent, food, transportation etc cost so it would vary from place to place, but I imagine it could not be much less than $40-50,000 in most places.  So all you libertarians who think you will save a few $$ by pulling out of contributing to social security, I hope you enjoy paying $20 (or more) for a burger at your local drive through.  

 

Don

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19 hours ago, brenthutch said:

As a well intentioned right-libertarian-leaning old-ish man, I feel your pain.  Their hearts are in the right place, however sometimes their collectivist tendencies get the best of them.  We all want to arrive at the same destination, we just argue about the best route.

Don't think that is true. A libertarian wants to get to the best position for him or her and tells those not that fortunate "too bad".

I would prefer to get to a position where people can prosper, but that those who are not able to prosper have a minimum available to them.

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53 minutes ago, turtlespeed said:

I'm curious as to how much you believe that big government would keep their mits off your money as financial leverage?

Why not throw in good money after bad?

Well, the government can get my money now. They can change the rules for 401k withdrawls, or raise taxes on my income bracket. They haven't because those measures would be unpopular. They also have been very cautious about fucking with SS because old people vote and stealing from grandma is also unpopular.

For these reasons, I believe that SS will be "saved" through some minor benefit reductions, tax increases, and borrowing (passing the buck), but like UK Brexit and USA government shutdowns have demonstrated, politicians will need to have a figurative gun held to the heads to do the hard compromises that will be required to do the saving, so it will occur at the last minute (or just after that)

So my interest in "expanding" SS would depend on the strength of that same social contract, and politicians fear of breaking it.

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5 hours ago, SkyDekker said:

Don't think that is true. A libertarian wants to get to the best position for him or her and tells those not that fortunate "too bad".

The libertarian ethic drives me crazy. These are people who want all the benefits of a society based on rules. But they don't want the particular rules they don't see as benefiting themselves.

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16 hours ago, gowlerk said:

The libertarian ethic drives me crazy. These are people who want all the benefits of a society based on rules. But they don't want the particular rules they don't see as benefiting themselves.

Do you think the libertarian ethic is ever right?  I don't agree with the party line, but there are some issues I can get behind, like decriminalizing all drugs and marriage equality.

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On ‎4‎/‎25‎/‎2019 at 4:20 AM, kallend said:

There are survivor benefits for spouses and dependent children.

Some social security benefits are also paid out to children who have never (and may never) paid into SS.  Kids born with a variety of mental and physical ailments are eligible to receive benefits.  some of my money goes there, and I'm well more than okay with it.  This IS the right thing for a society to do. 

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(edited)
48 minutes ago, yobnoc said:

Do you think the libertarian ethic is ever right?  I don't agree with the party line, but there are some issues I can get behind, like decriminalizing all drugs and marriage equality.

We are all skydivers. We value personal freedom, including the freedom to kill ourselves pursing a very selfish hobby.

There are plenty of other examples I can all find where I think the desires of the individual can trump "society". Personal freedom vs societal obligation falls on a continuum from Marxism / Communism / Stat-ism to Libertarian-ism, and I am going to fall in a different place than you are, but it is not all or nothing for every situation.

The decriminalizing of drugs could be a separate thread. I think decriminalization has some powerful arguments, and I also believe that drug rehab services should be available to those who need it regardless of ability to pay.

Edited by SethInMI

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24 minutes ago, SethInMI said:

We are all skydivers. We value personal freedom, including the freedom to kill ourselves pursing a very selfish hobby.

There are plenty of other examples I can all find where I think the desires of the individual can trump "society". Personal freedom vs societal obligation falls on a continuum from Marxism / Communism / Stat-ism to Libertarian-ism, and I am going to fall in a different place than you are, but it is not all or nothing for every situation.

The decriminalizing of drugs could be a separate thread. I think decriminalization has some powerful arguments, and I also believe that drug rehab services should be available to those who need it regardless of ability to pay.

Oh for sure a different thread; I was only pointing to those two examples off the top of my head where I think that the libertarian approach is best.  I generally fall to the left-center-left on most issues, but some of the things the "purist" liberals advocate for drive me absolutely crazy.  Anyone who spouts off about strengthening unions, for instance.  I manage Union employees.  While I fully support their core cause (negotiating for better pay/benefits and demanding safe working conditions), they've become just another money-making corporation that is just as susceptible to corruption, and a lot of their work involves protecting people who legit should be fired.  Like, I've seen a hi-lo driver drop a unit (I'm purposely being vague) that costs roughly 35k and ruin it.  As is the policy, the driver was sent to medical to provide a urine sample, and failed.  Two days later, the driver was back at work, on a hi-lo, and received back-pay for the days he was on suspension.  It's absolutely ridiculous. 

I digress...

The point is that nobody fits neatly into a political box (except trumpvangelicals), and one of the problems I have is with the administration of Social Security.  And due to the poor administration of Social Security, I'd be chomping at the bit for an opportunity to opt out of it.

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2 hours ago, yobnoc said:

Do you think the libertarian ethic is ever right? 

Plenty of libertarian philosophies are worthwhile - the emphasis on personal freedom, a "ground-up" instead of "top-down" structure for authority within society and mutualism all make sense.  But like any -ism, in its pure form it's pretty toxic.  Societies do best when they pick and choose the best of several different systems for their society, while rejecting the worst of each (IMO.)

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1 hour ago, yobnoc said:

Do you think the libertarian ethic is ever right?  I don't agree with the party line, but there are some issues I can get behind, like decriminalizing all drugs and marriage equality.

I think it is entirely reasonable to question why rules (laws) were enacted, and ask whether or not they solve or address a significant problem.  Some laws may have made sense at one time but are no longer relevant.  Some laws exist to force compliance with a belief system and punish behavior that is not harmful but just offends some people.  "Blue laws" (businesses have to close on Sunday, or no alcohol sales on Sunday) would be one set of examples that have largely gone away.  Laws against homosexuality are disappearing as well, though people are still fighting for a "right" to discriminate under the guise of "religious freedom" laws.  My personal perspective is that only those actions that harm (or have a reasonable probability of harming) other people should be criminalized.  Personal drug use, for example, should in my opinion not be a crime (you should have a right to make bad choices if you are the only one harmed), but DUI should be a crime because it puts innocent people at risk.  Admittedly it gets more complicated than this (for example children are affected when their parents become meth addicts) but the basic principle is you should have a right to do dangerous things to yourself.

Beyond that, assuming a law addresses a real problem (prevents or punishes one person harming another) I think it is reasonable to ask if the law does more or less harm than the behavior it is trying to prevent.  All laws restrict our freedom to act in some way, so the question is do we gain more from enforcing the law than we give up?  Most people agree that laws against theft are a good thing, in that they discourage theft and free us from the need to constantly stand guard over our property.  If there were no laws against theft, every time you left your home you would risk coming home to an empty house.  Although the law does not completely prevent this possibility, it reduces the likelihood to the point were most people feel free to go to work, or shopping, or the dropzone.   On the other hand, I think a lot of homeland security laws infringe on freedoms and in exchange offer only illusions of increased security.  However, there will always be debate about the cost/benefit of laws, and it seems to me some extreme libertarians I have discussed this with feel that there is no benefit that could outweigh the loss of freedom from any law.  There are people who think they can personally deal with anyone who tries to harm them, so there is no need for laws or police.  That's so unrealistic as to be idiotic in my opinion, but such people do exist.

Another thing about libertarian policies is, it seems to me, that they never ask what the logical outcome of their policies would be.  As an example, several years ago I had a discussion (here in speaker's corner) with someone who was very vocal that the government (the CDC and the FDA) had no business monitoring food safety or pharmaceutical drug safety, because those things were not specifically mentioned in the constitution.  It did not matter at all to them that the consequence of their line of thought was that everyone would be exposed to a significant risk of serious illness or death from every head of lettuce or jar of peanut butter.  The idea that they could be forced to pay taxes to support food safety was, to them, far worse than the idea of dying because a food processor decided to ship peanut butter they knew was contaminated (as actually happened to a bunch of people).

Another example is the libertarian idea that the government should not subsidize anything, such as roads; that should be left to private industry.  The idea is that, where there is a need for a road, investors will fund the road and then get paid back and collect a profit by charging tolls.  Imagine you build a highway, at a cost of a million dollars/mile, in a city like Atlanta where 10 thousand people/day use that highway.  Even with a modest toll/car you would soon recoup your investment and start making a profit.  Now imagine a highway between two cities in, say Idaho.  Many fewer people will use that highway each day, so the toll will have to be proportionally higher.  In Atlanta, lots of people willingly pay between 5 cents to 50 cents a mile (depending on traffic) to use the express lanes.  How many people will pay, say $5/mile, day in and day out, to get from Boise to Twin Falls (128 miles, or $640/trip).  The cost of libertarian policies (no government subsidies for anything) would quickly make it prohibitively expensive to live anywhere except in large cities.  If our libertarian lives in, say, Atlanta they may resent paying taxes to subsidize road construction in Idaho (or every other less populated area), but how much would they like it if all those people were forced to move to Atlanta?  Traffic is already horrible there.

Don

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2 hours ago, TriGirl said:

Some social security benefits are also paid out to children who have never (and may never) paid into SS.  Kids born with a variety of mental and physical ailments are eligible to receive benefits.  some of my money goes there, and I'm well more than okay with it.  This IS the right thing for a society to do. 

Yes'm.  

Where it comes to issue is when the system is built in a way that allows people to abuse it.

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1 minute ago, turtlespeed said:

Yes'm.  

Where it comes to issue is when the system is built in a way that allows people to abuse it.

Of course, the only way to ensure no-one can figure out a way to abuse the system is to make sure there is no system at all, or make it so hard to qualify for that most people who actually need help are excluded.  

It seems to me that many Americans are more outraged at the idea that someone could take advantage of them, than they are at turning their back on someone who is truly needy.

 

Don

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1 minute ago, GeorgiaDon said:

Of course, the only way to ensure no-one can figure out a way to abuse the system is to make sure there is no system at all, or make it so hard to qualify for that most people who actually need help are excluded.  

It seems to me that many Americans are more outraged at the idea that someone could take advantage of them, than they are at turning their back on someone who is truly needy.

 

Don

Yes - I believe that is true to a certain extent.  

What's the answer?

Probably better enforcement, and oversight, along with higher value/stiffer penalties.

But then we have too many bleeding hearts saying, "Awwwe - but they didn't mean it."

The penalties should be a few orders of magnitude above the abuse of the system so that it is almost ridiculous - yet tenable.

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Once the cost of enforcement exceeds the cost of fraud we’re getting into an area where maybe punishment for the sake of punishment doesn’t make sense. Here I’m including things like jail for most fraud; we pay far more for the punishment than we gain back. Terminate benefits, impose a fine, and yeah, maybe never collect it. 

Because most of the welfare/SNAP/SS frauds are still poor. Just not quite as poor as they make out.  At least that was my experience when worked at the Food Stamp office. 

There are occasional big frauds; punish them and publicize.  And, like any system, the gamers will figure out how to game it, and then it’ll have to change again  

Wendy P. 

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2 minutes ago, turtlespeed said:

Yes - I believe that is true to a certain extent.  

What's the answer?

Probably better enforcement, and oversight, along with higher value/stiffer penalties.

But then we have too many bleeding hearts saying, "Awwwe - but they didn't mean it."

The penalties should be a few orders of magnitude above the abuse of the system so that it is almost ridiculous - yet tenable.

A problem that often comes up is that it costs more to police some systems than cheaters take from the system.  Take Social Security disability for example, how many people would it take to personally investigate everyone who claims that benefit?  Let's say you hire 5,000 people at $40,000/year plus benefits (which adds another 50% at least to their salary).  That would be ~$300 million dollars/year.  Is that cost effective?  I recall reading that a lot of medicare fraud goes unpunished because to costs so much to prosecute cases that it isn't worth it, except for major offenders.  

 

Don

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(edited)
On 4/25/2019 at 11:05 AM, yobnoc said:

If I were given the choice to vote for a politician who was for an opt-in system, I’d vote for him/her. 

I've read the entire thread and both sides have merit. There was a time when one could opt out of the SS system, but they had to have a federal pension/healthcare or be a clergyman (I think clergy can still do it).

First, no one has said that a retirement account is a bad thing. In fact, the US government encourages it.

If you were born in 2000 (19 years old) Making $56K/annum and were able to save $250.00/month (assuming you have no employer contributory match) until age 65; you would have approximately $550,000; but your future financial requirements at 65 would be about $950,000. You would be roughly 40% short of your retirement goals (even with SS). As you get older; you start to have children and it becomes increasingly difficult to save that $250/month. So, you slack for awhile until the kids are gone and you're in your 40's when you're able to increase and get aggressive with your retirement fund. You can use any online retirement calculator to verify this.  

Healthcare - is a major issue no matter which end of the political spectrum you're on. At one point; we were able to offer employees full healthcare coverage. I had one employee who was head of household with three children. His healthcare premium for the company went from $4k/annum to $16K/annum in one year.  Because I too; was working for a corporation (COO) that wanted at least an 10-15% EBIT; we had to change to a contributory health care program (Employees pay) or we had to pass the cost on to our customers which would have priced us out of the competition. So, up until 20 years ago - full healthcare by a company was possible. Then it became contributory, then it got just too expensive for companies to have or they couldn't afford the HR staff to accommodate the ever-changing health care for employees. 

ACA - (a/k/a Obamacare) a/k/a the biggest insurance scam in history. The industries that profit from our current healthcare system wrote the legislation, heavily influenced the regulations and have received waivers exempting them from provisions in the law. This has all been done to protect and enhance their profits. In the meantime, the health care crisis continues. Fewer people, even those with health insurance, can afford the health care they need because of out-of-pocket costs. The ACA continues that trend by pushing skimpy health plans with low coverage and restricted networks. The ACA takes our failed market-based system to a whole new level by forcing the uninsured to purchase private health plans (read as: Poor Folk) and using the government to sell and subsidize them. And, the con continues. Well, until the demographics in a certain area show it to be unprofitable and the insurance companies can pull out. 

Social Security - When SS started - thumbs up. But, it began and still is a transfer system; not an accrual system. And, the plan sounded good - if everyone keeps having babies at the current rate - all should be golden. But, it wasn't. We baby boomers started getting older and the next two generations were not only not having less children - in many cases none. The government has developed some 20 different plans to emerge from failure in 17 years - none of which are solutions to salvage the current 2.7 trillion dollar surplus (like investing it - because; by law they can't). Everything from raising or eliminating the cap to, raise the age, to tie the COLA to a CPI-E (elderly), privatize the program, eliminate the program, etc. etc. None of them work.   

Now, people like you and I who want our government out of our private matters, decisions, subsistence, and lives etc. are faced with a problem.  They've been taking money out of our pockets for years and doling it back at a reduced amount than if we had just added it to our 401k's and increased our retirement portfolio from the aforementioned $500K and a shortfall of 40% to 2 million and twice the needed amount at retirement. 

You and I are for less government. However, during that population growth; we also grew poverty and required services (education, infrastructure, FAA, etc.) and now; I don't see a way out of our current problem of having ~45,000 Americans dying each year due to a lack of insurance and another ~85,000 dying each year from being under-insured. Healthcare and SS are so tightly interwoven that their elimination has become impossible, AND they have both become so politicized that there is no and can be no bipartisan healthcare/SS all-in-one solution committee.  So, in the meantime; while you'd like to opt-out - Your parents, grandparents, other family members or union "brothers" might suggest otherwise.       

Edited by BIGUN
transposition
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(edited)

That's a long and thorough analysis; thanks for the point of view. I'm not sure I agree with all of it and how it's stated, but it outlines some of the big issues, both pro and con. Thanks

Insurance isn't the only culprit in the healthcare costs issue; the actual cost of healthcare is going up, especially at the top end. And we all expect to have access to it. Back when a broken arm was set in the doctor's office, it was realistic. Now that it's often a $70,000 operation, not so much. 

Wendy P.

Edited by wmw999
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19 minutes ago, wmw999 said:

Back when a broken arm was set in the doctor's office, it was realistic. Now that it's often a $70,000 operation, not so much. 

Hi Wendy,

My 14 yr old grandson broke his left arm about two months ago.  Set in the doctor's office, minor cast & he was on his way.  I do not know what it cost his parents.

Jerry Baumchen

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13 hours ago, wmw999 said:

Insurance isn't the only culprit in the healthcare costs issue; the actual cost of healthcare is going up, especially at the top end. And we all expect to have access to it. Back when a broken arm was set in the doctor's office, it was realistic. Now that it's often a $70,000 operation, not so much. 

But the only reason it's a $70,000 operation is the insurance companies' insanely convoluted billing process, no? The actual cost of the operation plus a reasonable profit margin for the hospital would be nowhere near $70,000.

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(edited)
2 hours ago, jakee said:

But the only reason it's a $70,000 operation is the insurance companies' insanely convoluted billing process, no? The actual cost of the operation plus a reasonable profit margin for the hospital would be nowhere near $70,000.

When you go to the ER they will always steer you to whatever procedures are the most profitable for them. In the USA that is. In Canada they will provide you with what they deem necessary given the resources available. Which is the better system? That greatly depends on your POV.

Edited by gowlerk

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1 hour ago, gowlerk said:

When you go to the ER they will always steer you to whatever procedures are the most profitable for them. In the USA that is.

That is overly cynical and overly simplistic. From my limited experience, most workers in a hospital don't have a good grasp on what any procedure will actually cost the hospital. They probably don't know the list price, and they probably don't know the actual negotiated price for the insurance company. If there are extra procedures, it is more likely due to the "abundance of caution" that can creep into a diagnosis.

Having said that, I have heard from some people in the healthcare business that there is a LOT of waste. Device manufacturer's reps/trainers in the operating room ensuring that if there is a hint of sterile field contamination that all the one-time-use instruments are discarded and new ones opened was one I heard recently. The trainers/reps are incentivized to get as many instruments used as possible, and the surgeons and support staff don't have a strong dis-incentive to prevent that, so...viola wasted money.

 

 

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On 4/26/2019 at 3:46 PM, turtlespeed said:

Yes - I believe that is true to a certain extent.  

What's the answer?

Probably better enforcement, and oversight, along with higher value/stiffer penalties.

But then we have too many bleeding hearts saying, "Awwwe - but they didn't mean it."

The penalties should be a few orders of magnitude above the abuse of the system so that it is almost ridiculous - yet tenable.

Interesting.

Considering how many Republicans were very upset with the penalties against Manafort.

Every system gets abused, something you will never eliminate. Of course it should be monitored. But if you spend too much on enforcement, those stats will then be used to debate the ineffectiveness of government and the system itself.

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4 hours ago, jakee said:

But the only reason it's a $70,000 operation is the insurance companies' insanely convoluted billing process, no? The actual cost of the operation plus a reasonable profit margin for the hospital would be nowhere near $70,000.

Often, no.  Treatments really are better nowadays.  If you broke your femur "way back when" you'd be in traction for weeks, then spend more weeks recovering from the problems caused by being in bed for weeks.  Nowadays they open up your leg, put in an IM rod and let you leave on crutches.  That is, objectively, a much better treatment - but it's surgery.  So a lot of the reason that it's more expensive is that the treatment is both more complex and better.

But yes, there is also a lot of fat in the billing system, which (ironically) was put in place to reduce costs.

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