I've always liked understanding the world through numbers, and markets are the beautiful impartial scorekeeper. When I was a teenager I used to compare the price of things to Wendy's cheeseburgers. "That's like 35 Jr. Bacon Cheeseburgers!" I would say in disbelief. When I was hungry I was more price sensitive of the ratio of … Continue reading Averages are Overrated
Businesses love metrics. One form or novel way (a 5 on the hack prowess scale) is to find the perfect metric that makes the future a little more predictable. The eager student tells the elderly person, "Teach me to be wealthy, only quicker" to paraphrase C.T. Munger. A year after the financial crisis of 2007-2008, … Continue reading On RVs and Write-Offs
$4,537 can buy a lot of Skittles*. Or it can buy you the average single deductible for an unsubsidized enrollee with healthcare coverage on the Affordable Care Act (ACA) exchanges. At 3.4x less, the $1,350 average deductible for the 152 million who get their insurance through an employer looks benevolent. In spite of having the word "affordable" … Continue reading The $4,500 Deductible
Today the cost of healthcare landed on the front page of The Wall Street Journal, just below a story on bond yields, and next to the dancing UK Prime Minister, Teresa May. The angle of the story is how the cost of family healthcare premiums in the United States now approaches $20,000. The genesis of … Continue reading The $20,000 Price Tag: Insights into the 2018 Kaiser Family Foundation Employer Survey.
Jeff Bezos of Amazon is famous for being customer-centric, so much so that Amazon's annual letters proudly say, "We seek to be Earth’s most customer-centric company." Shipping, easy returns, streaming, and Kindle are proof. "Free" 2-day shipping for Prime membership is a big part for me. So far this year I've ordered 54 packages, or … Continue reading In Praise of the Six Page Narrative
Sometimes the solution is to do less and to do the opposite: When Employee Healthcare Costs Move Stocks
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, … Continue reading Passive vs. Active in Investing and in Health
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 … Continue reading How Outlier Stories Stain Healthcare
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 … Continue reading The All-You-Can-Eat-Healthcare-Buffet
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 … Continue reading Part 2: Is The Cheesecake Factory in The Healthcare Business?