August 2018 - Olavi Group

The All-You-Can-Eat-Healthcare-Buffet

A couple of weeks ago I was with my family in Guanajuato, a beautiful and historic colonial city in central Mexico. Imagine a hillside version of Venice with winding alleys and colorful buildings. We arrived and settled in the rented apartment. We met Don Chava, owner of the corner store, and then ventured out to walk around town. We quickly ran into an eager salesman who talked-up a cheap city tour and recommended a buffet. We were sold. With our stomachs full, we started to see the town on foo ...

Part 2: Is The Cheesecake Factory in The Healthcare Business?

Now known in some circles for something beyond its array of cheesecakes, 2,000 calorie dishes, and cruise ship-meets-Las Vegas décor, The Cheesecake Factory (CAKE) added a second consecutive quarter of negative healthcare news, a cost that’s hidden in most companies' income statements. The impact of this quarter’s negative healthcare surprise was $4,600,000, or 44% of their total 16% earnings per share miss. That, along with wage inflation and other costs, sent shares down over 12% on August 1st ...

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Does The Net Promoter Score Matter in Healthcare?

If you rent a car, have cable or internet, or health insurance, your experiences are likely to be less stellar than if you use Netflix or shop at Nordstrom. TV providers show up late for your appointment, and, since they feel for you, they raise your bill after six months. Conversely, Netflix charges $10.99/month and spends billions on great content; I worked at Nordstrom during college, and though I never had someone try to return a tire, I can attest that their service, training, and return po ...

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A New Salary Negotiation Tool: Healthcare Benefits

Over 30 million people in the United States start a new job every year*. We rely on past salary anchoring, asking around, the walls of internal company salary ranges, and sites like Glassdoor, to now know how much others are making in salaries and bonuses. But what about benefits? Often the biggest dollars outside salaries and bonuses are spent on healthcare: ~$10,000 per employee per year and highly valued by job seekers. A great piece appeared on HBR's site about how important they are. As a n ...

The Walmart Effect on Healthcare

The 2006 book The Wal-Mart Effect describes the retailer's impact on communities and suppliers. Since it was written, a lot has changed. Amazon has outperformed Walmart in the stock market by 20x. Walmart has also dropped the hyphen from its name. Walmart still does $57,000,000 per hour in sales, or $500B per year, and has 2.3M employees worldwide. With that size comes clout: twice in the last week the markets have shuddered as Walmart heft has influenced key businesses. The first came from Syn ...