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The Alchemy of Health Savings Accounts

Alchemy is for more than quacks. Even Isaac Newton dabbled in it. But it means more than turning lead into goldone definition is to transform something in a mysterious way. Rory Sutherland wrote a great book of the same name on a type of alchemy--how marketing can create magic. 1+1 can equal 3. The marketing alchemist is unlike a physicist or economist; small changes can lead to big results. In health insurance there's a way to create alchemy. The health savings account (HSA) is a bit of l ...

Insurance

True Deductibles

Deductible nounNORTH AMERICAN 1. (in an insurance policy) a specified amount of money that the insured must pay before an insurance company will pay a claimlexico definition. 2. True deductibles include all first-dollars paid by the insuree until insurance kicks in, including premiums. 3. There is no consistent generosity by firms in employee premiums paid via payroll and deductibles. The R-squared value of annual employee payroll contributions and single deductible based on an analysis of 485 l ...

Transparency

What Healthcare Consumers Want

In many areas, the American consumer is flush with choice and transparency in where and how to spend dollars. Rent or buy. California or Texas. Water, Coke, or Pepsi. Ford or Tesla. Gold health plans, bronze health plans, or alternative health insurance, particularly if spending your own money on a full sticker plan. Healthcare has varying demands and problems, and consumers demand more choices.   Transparency There are greater moves towards transparency, not just in prices at point ...

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April’s Healthcare Index

Inspired by the monthly Harper's Index, and after a hiatus in this post category, here is April's index on random and useful stats and figures in healthcare and finance. 10-year annualized return for the S&P 500 Healthcare Sector Index: 13.7%; S&P 500: 11.94%. Expected Long-Term Rate of Return on US pension plan assets for Ford, GM: 6%, 5.6%. Current short-term expectations for medical cost inflation in the US for UPS's post-retirement medical benefits: 6.5%. Generic drug ...

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What Buffett Avoids

Warren Buffett has invested in an old textile mill, utilities, insurance, reinsurance, shoes, chocolate, newspapers, banks, bricks, carpet, food, and more. “The ideal business is one that earns very high returns on capital and that keeps using lots of capital at those high returns. That becomes a compounding machine.” Warren Buffett CEO Buffett loves the insurance business. There are no factories to build, no steep environmental regula ...