I came across this story and really felt the need to make sure you all are aware of this and understand it.
So some guy on TeeVee decided to go into the consumer debt market and buy some consumer debt – this is what COLLECTION AGENCIES do.
He bought $15,000,000.00 (fifteen million dollars) of medical debt out of Texas and paid… wait for it… just under $60,000 for it. And he paid the asking price. That is what the portfolio of bundled debt was OFFERED at by the previous holder, who may or may not have been the originator.
Guys, that is $0.004 cents on the dollar. FOUR TENTHS OF ONE CENT per dollar. Which means that if a debt collector settles with the debtor for $0.01 on the dollar, his gross profit margin would be a mere 250%.
When Karl Denninger and myself and other people (but KD is without question the leader on this topic – his book Leverage has a goodly part dedicated to this very thing) scream and yell about how galactically criminal the medical/insurance racket is, and how if the market were allowed to work that prices for all medical products and services would fall at least 90% if not more, we really aren’t kidding. Just look at the data above. It implies a 25000% markup to the paying private consumer. Everyone else (namely insurance companies and government… but I repeat myself) backs out of the TWENTY-FIVE THOUSAND PERCENT CUSHION.
Name me one thing that government does not screw up when they get their hands in it.
Tyranny
That is the first time someone gave a right answer to that question.