Arbitrage and Healthcare

There are different types of arbitrage. defines one form as the "the simultaneous purchase and sale of the same securities, commodities or foreign exchange in different markets to profit from unequal prices." Imagine buying gold in Italy in euros and selling it at the same time in New York in dollars. Those differences are short-lived and have transaction costs. Millions of people doing this across different … Continue reading Arbitrage and Healthcare

January’s Healthcare Index

Inspired by the monthly Harper's Index, this is 2019's first index on healthcare and finance. The average ratio of Medicaid-to-Medicare payments spending across the US across all services: .72; In CA: .52. The factor by which commercial insurance payments exceed the reimbursements from Medicare: 1.88x The net assets of HCA, the largest publicly-traded hospital in the … Continue reading January’s Healthcare Index

Stats on High Deductibles

November has past and healthcare open enrollment is behind us. It's the time when spreadsheets are pulled together, employees and spouses (even actuaries) run front and back of the envelope calculations to decide where to enroll. Stock photos of happy couples in the 30-page guides beckon workers toward a tortuous process. It's usually a choice … Continue reading Stats on High Deductibles

On Hidden Risks and Volatility

Volatility in investing can be a great thing. The attraction to Bernie Madoff's scam can be better understood by its lack of volatility. His funds showed annual returns of an eerily consistent 10-12% and at one point reported 72 consecutive months of positive returns. His strategy used a split-strike or collar options strategy (not related … Continue reading On Hidden Risks and Volatility

Costco: Lessons from Member Obsession.

Some call them clients, others guests or customers. Costco (Ticker: COST, revenue $141B) calls them members, a term that makes you feel like you're part of a special club. It's a club that will not sell you junk*. They do not exaggerate. Theirs is not fake-Enron-style-ethics-bragging, and they actually list shareholders' interests last. Focus on the … Continue reading Costco: Lessons from Member Obsession.