Saturday, February 17, 2018

5 Reasons You Didn't Get a Bigger Raise This Year

Wage growth has been stable at 3% across the country and in Europe and Japan since we got out of the recession in 2008. Three percent doesn't allow for a lot of differentiation in salary increases across an organization, so it's likely your raises have been pretty unimpressive. It's been ten years since the economy tanked, so why aren't employers putting more money into salary increases?
Data from Quatt Associates

  1. With every employer setting salary increase budgets at 3%, employers are under no pressure to do more than that. Matter-of-fact, you look pretty irresponsible to your board if you set a much larger budget. How would you justify it?
  2. There is evidence that companies have shifted money into bonuses rather than base pay increases. Bonuses are much more nimble than base pay. It’s easier to forgo bonuses if profits are not meeting expectations than to cut salaries or lay people off.

Saturday, February 3, 2018

Tackling Health Spending

On Thursday, the National Pharmaceutical Council (NPC) and Health Affairs launched a new initiative to address health spending called Going Below the Surface. It's is a "research-first endeavor dedicated to unearthing and examining the drivers of health care spending in the United States, and convening a multiple-stakeholder discussion to better understand what we receive for these investments."  The U.S. spends 18% of GDP on health care which is far more than any other country. And, despite all that money, we have worse outcomes.

David Cutler from Havard University shared a few shocking comparisons. The one that has stuck with me is Duke University Hospital has 900 hospital beds and 1,300 billing clerks. Do you think maybe we could save some money by streamlining how we pay for care?

Amitabh Chandra from Havard University showed this cost curve to illustrate how the first health care dollars spent extend life significantly, but you quickly reach a point where we're spending half a million dollars to extend a person's life by a matter of days. This leads to the tough questions. Who decides where the time isn't worth the expense? Is there one answer for everyone in the country or could individuals choose the coverage they want?