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September 26, 2019

Jerry, Bart, Joey and the Cops

The expansion of cable channels created an outlet for many ‘interesting’ TV shows (Mom said if you can’t say something nice, use the word ‘interesting’ instead).  You can now waste time watching everything from competitive medieval sword making to live commentary on the Asian stock markets.

But the capacity may have overshot the available content because you can also find channels that just show reruns of the same show over and over.  Seinfeld, The Simpsons, Friends, and Law and Order, some of the most available shows on the tube, seem to have their own channel.

But sometimes a good rerun is just what you need.  I hope today is one of those days. As I was catching up on my reading and research, I kept running into recent updates of old numbers we’ve discussed here often.

It is not that anything moved in dramatically new ways – some just reinforce the really big truths that you must always keep in the front of your mind; others mark the incremental changes that slowly transform our industry.   Here are some rerun numbers, these from the KFF 2019 Employer Health Benefits Survey, worth seeing again:

  • The average annual premium for employer sponsored health coverage passed the $20,000 mark in 2019 for the first time. Workers pay just over $6,000 of that amount.
  • About half of Americans are covered by an employer sponsored plan.
  • For individual coverage, the average deductible in these plans is now $1,655 (due to complexities with family deductibles, this is always reported at the single coverage level).
  • Two-thirds of those in a high-deductible plan (defined as $1,000 or more) say they could not pau their deductible without going into debt.
  • The most expensive 5% of the population accounts for 50% of all spending. This comes to over $50,000 per person in this group. The top 1% of folks cost more than $100,000 a year each.
  • That means the other 95% of the folks spend, on average, only $276 on healthcare per year. One in five people have no healthcare expenses in a given year.
  • To no surprise, annual spending by people with insurance is much higher than for people without coverage. Depending on the age cohort, the multiple ranges from 1-3 times higher.

Some obvious points for your strategy…

  • The market is not equally distributed. Growth requires targeting the segments that really us your services.
  • The patient segments are different. Some feel like traditional healthcare, others are far more like classic consumer retail services.
  • For a growing number, every day it feels more like their other insurance products. That is, most likely costs will be paid in cash and the insurance is there for the really big stuff that likely won’t happen this year.

Reruns are handy because they remind us that like fashion the incremental changes are piling up, sometimes without notice, and now the world is different.

Tim Coan
Tim Coan

CEO and founder

Tim Coan, ALN’s CEO, writes an insightful and witty blog weekly about a variety of topics relevant to independent physician practices.