The Digest #40

Published on September 16, 2020

Medical Billing Transparency

“If you see fraud, and you don’t say fraud, you are a fraud” – nntaleb

In early August, I came down with a fever. I immediately searched for medical facilities offering COVID-19 tests and selected one. Later that day, I walked into the clinic, a technician took my temperature and then administered the test. After a 20 minute wait, a doctor entered the room and handed me a pamphlet of information, told me to self-isolate while awaiting results, and I went home. Fortunately, the test results came in negative a few days later.

This is an unremarkable story. Tens of millions of Americans have been tested for COVID over the past six months. Due to the need to encourage widespread testing, the CARES act, signed into law on March 27, was supposed to assure people that there would be no cost for testing, whether one is covered under insurance or not.

Medical billing is notoriously non-transparent. Unlike almost any other service, the price of medical care is usually unknown at the point of service. Neither the patient nor the provider typically has any idea what the bottom line cost will be for the patient because insurers have separate deals with providers and cost-sharing arrangements greatly vary. Markets cannot operate when pricing for goods and services are unknown by the economic actors involved.

But in the case of COVID, none of this was supposed to apply in order to encourage testing. The cost issue was supposed to be taken off the table. 

So it was surprising to receive a bill from the testing facility this week for a little over $100. The COVID test itself was free but a “patient visit” charge appeared on the bill. When asked about this charge, the clinic stated that the patient visit was for diagnostic purposes and paid for the doctor’s time. Of course, the doctor diagnosed nothing, was in the room for less than two minutes, and I never asked to consult with him. The clinic refused to reverse the charge. My insurer tells me that the coding was not COVID related. In simple terms, the charge was fraudulent.

My guess is that most people would simply pay such a charge but I plan to contest it as a matter of principle. There is not enough transparency in medicine in general, even when providers act in good faith. What is intolerable is when providers deliberately file misleading claims to get around legislation like the CARES Act. That is fraud and, as Taleb says, should be called out as fraud.

Wall Street Bombing of 1920

On September 16, 1920, a man driving a horse-drawn cart stopped across the street from the headquarters of the J.P. Morgan building on Wall Street. The driver disappeared and a bomb exploded killing 30 people and injuring 300.

The FBI believes that a small group of Italian anarchists were to blame for this terrorist incident but the case has never been conclusively solved. Wall Street was back in business the following day and life went on. As Jason Zweig notes in his latest newsletter, the bombing might have been timed to kill the senior leadership of the Morgan firm, but we will never know for sure if that was the intent. 23 Wall Street still bears the scars of the attack a century later.

Interesting Links

A Doctor Went to His Own Employer for a COVID-19 Antibody Test. It Cost $10,984 by Marshall Allen, September 5, 2020. My experience with COVID testing is nothing compared to this: “Physicians Premier ER charged Dr. Zachary Sussman’s insurance $10,984 for his COVID-19 antibody test even though Sussman worked for the chain and knows the testing materials only cost about $8. Even more surprising: The insurer paid in full.”(ProPublica)

Sogo Shosha by Brooklyn Investor, September 9, 2020. Brooklyn Investor comments on Berkshire Hathaway’s recently announced purchase of stock in five Japanese trading companies. This blog often has good coverage of Berkshire. In this case, the author has first-hand experience with Japanese companies and why they often trade at cheap levels. (Brooklyn Investor)

Warren Buffett is Investing in Japan. Now What?, September 10, 2020. Geoff Gannon and Andrew Kuhn discuss Berkshire’s Japan investments. Gannon notes that it is easier to find cheap stocks in Japan than in the United States which probably motivated Buffett to act. (Focused Compounding)

Rory Sutherland – Moonshots and Marketing, September 15, 2020. Patrick O’Shaughnessy interviews Rory Sutherland, author of Alchemy, one of my favorite books of the past year. I reviewed the book in February and have posted links of other interviews of Sutherland. I learn something each time I listen to him speak. (Invest Like the Best Podcast)

Creativity Starts Before Anything Is Made by Lawrence Yeo, September 9, 2020. Creativity is the culmination of experiences we have in our lives and simply cannot be forced: “We tend to believe that the act of creating is what defines creativity, but creativity starts long before anything is made. The first word you write is a distillation of the knowledge you’ve accumulated over time. The first brushstroke you paint is a reimagining of the experiences you’ve stored somewhere in the mind.” (More to That)

September Reading List

For the first seven months of the year, I read an average of 45 pages per day first thing in the morning. However, I fell out of that habit in August. This month, I have again ramped up my reading and plan to finish the following books:

The Years of Lyndon Johnson: Means of Ascent by Robert Caro. This is the second book in Caro’s five volume biography of LBJ and covers the seven years leading up to Johnson’s 1948 Senate victory. That victory was pivotal to Johnson’s Presidential aspirations. Caro believes that the 1948 Texas Senate race forever changed how political battles are fought. Halfway through this book, I can say that I haven’t felt bored by the details yet.

The Psychology of Money by Morgan Housel. This book has been much anticipated in the financial community. I often link to Housel’s blog posts because he has a way of distilling complex financial topics and often weaves in his personal experiences. As Howard Marks says on the cover of the book, “Housel’s observations often hit the daily double: they say things that haven’t been said before, and they make sense.”

The Almanack of Naval Ravikant by Eric Jorgenson. Naval is an entrepreneur, investor, and philosopher who often posts pithy sayings on Twitter. I have been intrigued by his posts which are regularly retweeted by thousands of people. Jorgenson has compiled his tweets and other quotes in a useful way and has made the material free to read, although I plan to purchase a physical copy of the book. 

Was this email forwarded to you by a friend or colleague? Sign up here to receive Rational Reflections directly every week.

Copyright, Disclosures, and Privacy Information

Nothing in this newsletter constitutes investment advice and all content is subject to the copyright and disclaimer policy of The Rational Walk LLC.  

Your privacy is taken very seriously. No email addresses or any other subscribers information is ever sold or provided to third parties. If you choose to unsubscribe at any time, you will no longer receive any further communications of any kind.

We will occasionally publish sponsored content. Such content is not endorsed by The Rational Walk LLC. No email addresses or any other personal information is ever disclosed to sponsors. You will only hear from sponsors if you choose to click on a link and provide your information directly to a sponsor. Potential sponsors may send inquiries to

The Digest #40