Sometimes the solution is to do less and to do the opposite: When Employee Healthcare Costs Move Stocks
Passive vs. Active in Investing and in Health
It has taken over 40 years for index investing to reach 20% market share. That's longer and less heft than most people would guess. But it's also a reminder of how a good idea can take generations of incremental awareness and results to move beyond shallow roots. Index investing is a form of passive investing, a low fee autopilot strategy. The reasoning behind it is that most individuals and funds can't beat the S&P 500. So why try? Just match it by relying on the collective wisdom of the a ...
How Outlier Stories Stain Healthcare
Price opacity is one of the grievances people have with healthcare in the US. Hip replacement price variation is an oft-cited procedure, yet another example where hoarding information and obfuscation is the norm. In one city, prices can vary by a factor of 3x or more. Price transparency is a laudable goal and progress is being made, but its impact is modest. And how common are hip replacements? For the commercially insured under age 65, there are 1-2 per 1,000 lives per year. That amounts to $2. ...
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 ...