In President’s Trump big beautiful bill is a cut to medicare and health services. There are practical reasons why there are cuts particularly as the baby boom generation ages, the cost of health services will dramatically increase. The next generation is smaller, which tends to mean health care costs should decline, but the way the health care system there are really no decreases.

A book about health care is called Dying for a Paycheck by Jeffery Pfeffer, published by Harper Business, NY, 2018. The issues with health care are not new, but Mr. Pfeffer, a Professor at the Graduate School of Business at Stanford University provides a healthy statistical information about the health care system and its relationship to people.

An important statistic is 75% of the more than $2 trillion annual health care spending was accounted for by people with chronic diseases. These diseases include diabetes and circulatory problems.

Mr. Pfeffer focused on people working and that means at the workplace it is very easy to find productivity loss arising from sickness, the cost to replace employees who are to sick to work, higher insurance premiums, cost of having health care and how to reduce it. From a employer’s perspective, focus on prevention should be a key, is it?

If someone does not have health insurance, what happens? The expected life expectancy falls because of a number of factors: higher stress levels because of fear of getting sick, medical bills which are difficult to pay, and non-prevention actions because some of it means going to see medical professionals on a regular basis for screening. It is easy to treat something at the beginning of the cycle then once you are infected and the list goes on.

There are many different methods for companies to deal with the health care of all types. Some companies reduce workforces (typically when a company announces a layoff, its stock will fall because investors see something is wrong, then it takes a week to figure what was wrong and how the company is addressing the problem). some companies offer prevention and everything in-between. The real issue for investors is how does the company rationalize what it is doing? does it keep workers longer? are they happier and more productive? are they grinding it out because they have a job till the next layoff? how do employees think about their company?

Linking to dividend paying stocks, for the foreseeable future health care and its issues will play a significant role in the scope of government. How a company translates those concerns to their employees is an issue which needs to be examined. Most people hope the drug companies will have the magic pill or treatment, but only if is covered by insurance companies.

There are more questions than answers, till the next time – to raising questions.