Tag Archives: Model

How Healthy is Healthcare?

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The healthcare sector just took another hit.

Context: apparently providers were connecting separate charts with diagnosis not linked to specific visits, in order to receive government payments. “Gaming the system”. (2026 Google Gemini Search).

In other words, providers being able to take old charts from separate visits, using them as a proxy for extra payments incentivized skimming without any added work or patient visits required. So free money. Now that compresses margins, and margins in health care are already tight via the high capex that is sector specific if I’m not mistaken. 

Put another way, the government is finding out about, or simply knew and is doing something about healthcare skimming profits from the top, bottom, and both sides. 

This could really hurt the industry, because it’s all they’ve known, assuming this has been a decade long process of taking advantage of uniformed patients, who just want the best care. 

Now my take:

 Ultimately, risks being fairly priced compresses margins, and removes more of the reimbursement benefits by way of lower costs. 

Seems like this could hurt insurers in terms of actuarial rates, being more accurately calculated and priced. So there should be a major adjustment to how they price risks, otherwise they keep the same models, and charge the same rates so healthcare providers will have to give in. If not prices will rise to “fight” it. It’s crazy because “fairness” in this case, means better outcomes for patients, which ultimately wipes out a lot of revenue, and profits for the healthcare sector. Now this also hits pharmaceutical companies in some ways. As well as physicians and doctors. The assumption here turns into, fairly priced risks models. This creates less invasive and unnecessary procedures. Which reduced premiums, and lower out of pocket rates. Which means less prescriptions, and tighter safety standards. Eventually the costs cuts follow payroll, and less money spent paying physicians, surgeons, and drug manufacturers. All of this because the government, or some other entity is directly or indirectly (not having to shell out billions) looking out for the American people who help fund this entire mess. So more power is taken away from providers who essentially were the inadvertent risks model adjusters in a sense. Because “you need more tests” means you have to keep paying, so I can keep my Mercedes.” “We’re not treating, we’re retrieving,….profits, by any means necessary.” 

Here’s where providers will have to differentiate themselves from the pack with truly competitive prices or actually providing quality care and services. Not just skimming left and right. Plus there was and is always the priesthood/gatekeeping mentality and business model that was always there. “We studied this for over 10yrs, you don’t know. We know what’s best for you. Even if it means unnecessary costs, and procedures are being carried out to extract money from your pocket”. You also have the same dynamics as money driven medicine described. More competition creating healthcare inflation. They will just go harder and fight more to find added costs. 

The Restructuring/GoodWill Hoax.

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When you run your eyes through an annual report, you’ll see a lot of bullshit language. This language covers up real expenses like taxes, and bad investments. They do this in the form of deferred taxes, and restructuring. Let me break it down in layman’s terms. A company discreetly gives themself away with deferred tax payments and buying other companies inefficiently.

They basically say indirectly “we acquired some PP&E, and subsidiaries that have to be accounted for at some point. It’s an asset until the irs takes its cut. We also overpaid for this great company that actually turned out to be a bad idea, so our goodwill must be impaired legally. Even though goodwill is growing as an asset in your eyes, it’s actually just a bad deal we have to pay for otherwise gaap or fasb accounting firms will have a hissy fit.” Always question the language of a 10-k report.

The footnotes of a 10-k report will tell you how much value was destroyed for that particular period of time. 

AI = Average Idiots.

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Ai is the future…for developing average idiots. Why might this be the case? 

Before the use of chat bots, and google searches, one had to use their ability to read, think and write (in that order). The main component of the three? Thinking. Thinking requires active retrieval (using your damn brain to find, question, organize, and understand information). 

Due to the invention of advanced technologies such as ChatGPT, Claude.ai, and Gemini, (not to mention google search) the purpose of thinking has lost its value, and ironically its actual purpose. 

There are many studies that suggest, heavy usage of ai, plus confidence in that ai lead to lower critical thinking skills (1). The opposite being, a person with high confidence, possessing higher critical thinking skills (1). 

Allow me to simplify this: lots of AI chat bot use might make you dumber over time. 

There is research to show this to be true. (Immediately prompts an LLM to verify such findings). What are the risks involved in heavy ai usage? Losing your ability to make decisions and solve problems. 

Allowing the creators of these bots to indoctrinate us into a world wide state of stupidity. The catch? The addictive chemical reaction to any ai generated prompt after you input a question, or personal experience, getting a rapid and instant reply. Does this mean all ai is inherently bad? Not necessarily. 

However, there should have been far more regulatory oversight in place. Especially in connection to the younger demographic of people who are and will be born into a full life cycle of ai and LLM usage.

 It will be far more interesting to observe over time, what adults will be like 20 years from now, that heavily depend upon chat bots for their most pressing issues. 

Source:

1). https://www.nsta.org/blog/think-or-not-think-impact-ai-critical-thinking-skills

Artificially Optimistic Insinuation.

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Artificial Intelligence is not as intelligent as we might assume it is. Example A: it’s programmed by flawed humans. This means these flaws become exacerbated throughout the technological operating system. Example B: The flawed design creates automated responses. This lack of self-corrective responses triggers artificially inflated optimism.

This optimism is designed to increase consumer usage. In other words if you’re unable to spot your own irrationality artificial intelligence may incessantly stroke your ego. This creating interactive perpetual dissonance. Just because you receive positive feedback doesn’t necessarily imply legitimate capacity or aptitude on the users part. 

Luxury from point A to point B.

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I still find it interesting that there are cars made to drive at higher speeds than the average vehicle on the road. For example, the Tesla Model S has top speeds of 149mph. Other than being on a regulated race track, at what other time would you need to drive that fast? I guess the idea behind fast cars like Lamborghini’s, Ferraris, and Bugatti’s is simply the idea of luxury. The idea that “if I want to I can, but I don’t have to”, (if that makes sense).

Also the idea that cars are nothing more than a status symbol. You need to get from point A to point B. Residential roads are 25-35mph. At every red light it’s your time to shine. However, you still have to respect the rules and regulations of the road regardless of horsepower.

Another thing is, we can only see the inside of the car when we’re driving, but that’s where the plush seats and interior come into play, not to mention the intricate interface. Still, I wouldn’t mind driving a luxury vehicle myself, so I guess that’s why luxury vehicles with ridiculous horsepower and speeds exist.

“Always invert”. -Charlie Munger.

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I’ve recently spent a short period of time evaluating the fundamentals of a certain industry/business model from an opposing perspective. So far I’ve been exposed to its many headwinds, in regards to the long term prospects for its future growth. It seems much more effective to look at what could go wrong in a business when assessing it’s potential, as opposed to simply accepting its current economic characteristics, and settling on a predetermined thesis, which is already baked into it’s share price. Charlie Munger calls this process “inversion”. Basically turning the idea or business upside down, and seeing how you could ruin it.

This way you can reverse engineer the business model, and improve it’s economic characteristics, or avoid it entirely if it doesn’t fit your investment thesis.

You won’t get picked until you stop focusing on getting picked

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We’re still waiting on others to get us started. We’re still betting that someone else will pick us out of the crowd and say “hey you should start in this next movie.” “Pardon me, but you look like a model, you’re hired!” This is not how it works. Today, you will be passed by more opportunity than ever before. 

The trick now? decide for yourself, and create what you want, where you want, and how you want. It’s your story. You can write it the way you need to. Nobody is going to pick up a pen. Now when you want anything in life, especially something worth having, the work must be done by you. 

If it sparks the attention of someone, you’ll automatically be picked. The issue? Working on something with the intent to try and get picked by the writer, producer, director, manager, HR department, or random superstar is the wrong way to go about things. 

Just do great work that you are extremely passionate about.