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LaVydunas and SubCloser

David LaChapelle is a photographer who knows art history and how to use lighting. With apologies to LaChapelle I present LaVydunas.

This is our life. Dollbabies on the floor are our life. Being knocked over and stuck inside with toys is our life, as are laundry, princesses, unicorns, and prescription medication. The purple thing is our hospital iPad (thank you Sudits!), a device we desperately need and use too much. The bottles and mug are wine and coffee, drinks we desperately need and use too much. Thea’s world was turned upside-down. Her palette of choice is rainbow. Mom and Thea are angels while Siggy is wearing the only thing she’s been willing to wear for days, a purple ballerina dress. True to form she is nonpanted. Two adults who wish to connect exist as separates.

Rebecca wrote that the consolidation phase was pretty easy and that is true in a relative-to-induction sense. We’re all a bit tougher now. For example, we didn’t consider it update-worthy in the last few posts to share that Thea had a random day of vomiting, or that she spiked a fever and we were admitted to the ER, or that the ER made a medical mistake resulting in unnecessary pain. We learned that changing to UCSF means they draw blood from her arms instead of her mediport, IE more needles. I thought these things would be more stressful for her and for us. Instead it's kind of like she's looking me in the eyes to say, "Are you going to be brave this time, Daddy?"

[Humblebrag trigger alert]

I gave Rebecca three non-material gifts for the holidays: I took family photos, “assisted her” with a four-hour online traffic school she forgot about, and sent her off to Minneapolis to meet her new twin niece and nephew. That means I was the one who took Thea to chemo on Friday and got to see how she's become such a little honey badger. Ripping off medical tape used to be her hell, but honey badger don’t care. Just like I said, I’m the one who has to remember to be brave so I don’t freak her out.

[Straight up brag trigger alert]

Let's go back to that sent-my-wife-to-Minneapolis thing. I am extremely proud of how I am currently singledadding for 5 days and there have been z̶e̶r̶o̶ very few injuries.

Apart from Thea's therapy, there's another aspect of cancer that has my brain spinning. It involves an encounter from over 12 years ago. Bear with me on this story; I promise it gets insane and relates to Thea's leukemia.

Back in 2006, we knew a couple in Chicago named Karen and Tim who got involved in a series of odd real estate deals. The market was very hot. We remember it vividly because we bought our Chicago condo that year. A few friends had made some big gains flipping short sales; Karen and Tim were among them. They were using some uncommon clauses in their offers such as an "escalator clause", where the buyer pre-agrees to match any other offer. They were doing this with a company called SubCloser that was acting as both a buyer's broker and the mortgage lender. I'm pretty sure there are laws that prohibit this for any FHA-approved lender, so something seemed off from the start.

SubCloser was guiding them to a series of properties that were offered as "private market", an oxymoron that describes a situation where a seller's agent can pocket a larger commission. The really fishy part was how SubCloser deals worked: Karen and Tim were told they would go through all the normal phases including contract, putting up earnest money, disclosures, and inspection. They would even close and take possession - the whole thing - without knowing the final price they bought it for until two months after close.

Now, the only way this could possibly be sane was because: 1) The contract legally guaranteed that the secret/unrevealed asking price would be a fair market price based on the closest comparables 2) the actual final closing price paid after rebates would be at a huge discount to the asking price. Huge like 40% of asking when a usual close was about 90% of asking.

There were only a few homes available for a sale like this. Since lenders have to approve loans for specific homes, SubCloser was sharply limiting which homes Karen and Tim could attempt to buy. The sellers and their agents were apparently nice enough people, but they couldn't talk about price because they also had no idea what the final price would be. Karen and Tim would be like, "OK... but this is a 1930s 1100SF 2BR 1.5Ba in Ukrainian Village, right? That's got to be around mid $200Ks, agreed?" and sellers would respond, "Well that sounds reasonable but I really have no idea because this is through SubCloser."

Karen remembered calling SubCloser once and asking, "Can you at least guarantee it won't close at over $400K?” (Sorry, no) “What have your last few 1BR sales closed at - shouldn’t that be public record?” (Really can’t say, we don’t give that info out). The system was full of really nice people who could tell them nothing. They finally did a deal when they (by chance) found another SubCloser client that got a really nice 1BR for $120K when the final asking price was revealed to be ~$350K. Little did they know that other SubCloser clients would later be written about in the Chicago Tribune for being legally stuck paying full asking price with NO loan, AND forced to purchase the separate deeds for the parking, common space, and roof deck after the fact! It seemed absolutely insane, but this arrangement somehow worked out alright for the few cases we knew about personally.

Our group of friends decided the most reasonable explanation was that SubCloser was somehow helping the mafia launder money.

Hopefully by now, you also think that's pretty screwed up. Well, it's completely fabricated. I made it all up. We don't know any couple with that story but this is how it would be for everyone if we purchased homes like we purchase cancer treatment. "SubCloser" is just an anagram of "BlueCross".

This is a mildly allowable analogy to experience outrage because:

  • The financial and non-financial stakes are very high

  • The final price is in the hundreds of thousands of dollars

  • Mortgages and health insurance are financial instruments that collect a long stream of payments/premiums, and over your lifetime those add up to much more than the cost of your home or healthcare

  • Brokers are used to simplify complicated transactions

  • People get screwed at an unacceptable frequency

It's absolutely insane. Wonderful, word-class oncologists do not know ±$1000 that their hour with you will be billed for $1000, negotiated to $300. New laws went into effect January 1st saying that healthcare prices have to be public. These prices are useless. From this CPMC page you can download a 28MB .json chargemaster file and learn nothing. I’ve never seen a $113 ticket to DJ FlowCyto as the master of charge has listed, but I’ve seen the typo-riddled:

And who cares when nobody really pays either amount?

We are three months in and hospitals have informed us that cancer to date costs $515,231. Insurance says, “Nah. You’ll take $158,137” and hospital be like, “Yeah that sounds good”. We pay our deductibles and copays and coinsurance and our precious time. We learn our actual price two months after we bought it. Sounds like… SubCloser.

Now, maybe you know a thing or two and think, "Don't you just count on having to pay the out-of-pocket max?" Yes. Absolutely! That's true if you can guarantee everybody is in-network and everything is medically necessary and everyone prescribes the right generics. I won’t bore you with the litany of ways it is completely impractical to manage those three things.

Our collateral damage from healthcare billing has been minimal, but the journey is all potholes. The road is broken. It’s insane that we don’t fix the roads.

FUNcle Joel



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