You must find the courage to leave the table
Home Prices, Medical Inflation, and Mount Everest
Eight out of 10 urban areas in America registered average home price increases of more than 10% in 2021. Fifty years ago, the average home cost two years of the average American household’s income. Today it costs four.
The typical nationwide inventory of unsold homes hovers around 1.5m homes. In tight times of “good real estate markets,” that number dips to around 1m homes. Today, the nationwide inventory is under 600k homes.
This means that we need to double the existing inventory of homes for sale in order to slow the raging price increases that continue to defy gravity and conventional wisdom. Jason Hartman is predicting an additional 12% increase in residential real estate for the next 12 months. Of course, this will be even higher in some markets with supply constraints.
“Almost every significant breakthrough is the result of a courageous break with traditional ways of thinking.”
— Stephen Covey
Talking about inflation is new for most folks not around in the 1970s … unless they’re in the health insurance space. The most sophisticated of us in that industry have been talking about healthcare inflation for years. It’s really quite simple:
For our clients to keep their medical costs down, they must curb the rising costs of drugs – particularly specialty drugs.
Specialty drugs now account for 22% of total health care spend. One quarter of every dollar spent in health care spend goes to a small class of drugs! Overall drug costs themselves are increasing at roughly 7-12% per year and the costs must be managed. When they are, Rx costs can be reduced while employees still get the drug therapies they require.
Most employers do not understand that they can affect the overall spend trend of their health insurance costs if they address the drugs spend.
“The question isn’t who is going to let me. It’s who is going to stop me.”
— Ayn Rand
Mount Everest has been scaled by 6,000 climbers, and 300 have died. Of those, 85% died on the descent. I would have guessed that the ascent was more dangerous but those who know such things say that once the goal has been achieved, people become careless