Blockchain in Medicaid

Last week, I attended a Women in Healthcare – DC event titled “Blockchain in Healthcare.”  While I was familiar with blockchain through Bitcoin and Dogecoin, I had never devoted much time to considering possible applications to healthcare.  The presentation and discussion were led by:

  • Jeremy Epstein, CEO of Never Stop Marketing, who works with top-funded blockchain companies, such as OpenBazaar and Storj
  • Jody Ranck, author of “Connected Health: How Mobiles, Cloud Computing and Big Data will Reinvent Healthcare” and “Disruptive Cooperation in Digital Health” and chair of the upcoming Healthcare Blockchain Summit
  • Jason Goldwater, Senior Director at the National Quality Forum

Coming out of the event, my mind was racing with the potential applications to Medicaid, particularly program integrity.  Stay tuned for my thoughts on how blockchain could:

  • Improve quality of care and application experience for Medicaid participants
  • Reduce administrative costs
  • Reduce wasteful medical / long term care costs
  • Minimize administrative burden on providers (which could potentially lead to a larger pool of Medicaid providers and greater access to services for Medicaid participants)
  • Significantly decrease the length of time it takes to pay providers

In the meantime, this article provides a good overview, including a video, of what blockchain is (and is not).

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Analyzing real estate opportunities

 “Life is like a combination lock: your job is to find the right numbers, in the right order, so you can have anything you want.” – Brian Tracy

This quote also applies to real estate.  Today, I want to touch on the second step of the real estate investment process, which is analyzing potential investment properties.  Every article and book I have read includes a similar theme: the biggest mistake a new real estate investor can make is not performing due diligence.  As Jordan and I take the leap into real estate investing, we want to make sure that we have a clear idea of what we are getting ourselves into financially.  That’s not to say we won’t make mistakes along the way, but we will at least have a realistic plan to pay for possible bumps in the road.

analyze-properties

The two ways that rental properties can make money are:

  • Cash flow: the cash left over after all expenses
  • Appreciation: the equity gained as the property value increases

Although it is difficult to estimate future appreciation, it is unlikely that property values will decrease significantly if you plan to hold the property for an extended period of time.  There is generally a lower risk of losing money based on appreciation alone.  Therefore, this post focuses on how to estimate cash flow.

What is important to understand when conceptualizing cash flow is that income may include more than just rent and expenses will include more than just mortgage.  The following calculator I set up in Tableau will walk you through a full analysis of potential cash flow. The calculator includes the most common (and most commonly missed) expenses for a rental property.  Because Jordan works in finance, he helped me with some of the terms and calculations (not sure when I’ll use amortization schedules again!).  Since some of these concepts may also be new for others, I have done my best to provide explanations within the calculator:  hover over the question marks to get more information about terms used and hover over calculated numbers to see what the calculations mean for you.

(click to view calculator)

analysis-tool

It is critical that you set realistic expectations for costs.  As needed, contact local water departments, trash providers, electric companies, contractors, other local landlords, etc. to get accurate quotes.  Keep in mind that not all of these will apply to every property—for example, you may leave it up to your tenant to pay for lawn care.  Also, investigate local rental prices to ensure you do not overestimate monthly income or inadvertently increase vacancy rates because your asking price is too high.

The most important number crunching happens at the bottom of the calculator, where you can view the final cash flow and cash-on-cash return figures, as well as other relevant metrics (e.g., net operating income, cap rate, etc.).

How do you use the calculator to determine if a property is a good buy?

Your chances of success are high if you can answer “yes” to the following three questions:

  • Are your estimates realistic?
  • Do you have positive cash flow?
  • Are you projected to make more money than if you were to invest your cash in the stock market (i.e., are you making more than 10-12% cash-on-cash returns)?

Hope you find this tool useful as you analyze potential rental properties!

Finding real estate opportunities

Another new year’s resolution for me this year was to obtain my real estate broker’s license.  My fiancé, Jordan, and I are looking to buy our first house and have also become interested in the market for rental properties.  There is a wealth of information and data already out there about real estate investing, including calculators for analyzing potential rental properties.  However, to help me better understand the process, I will be breaking apart these analyses and creating my own tools, which I will present in a series of blog posts.

There are five main steps in the real estate investment process:

real estate plan.png

This first post will focus on finding potential investments.  While the price of the property is important, it is only one of the factors an investor should consider.  Others include:

  • Cash flow opportunity
  • Likelihood of appreciation
  • Maintenance costs

These factors often vary based on the market and one method of quickly evaluating markets is the price-to-rent (PTR) ratio.  This ratio represents the relationship between the cost to purchase a home and the cost to rent.  The PTR ratio is a double-edged sword because a lower PTR ratio could signal higher cash flow opportunities, but it also means that it is cheaper for individuals in that market to buy a home than it is to rent.  Therefore, the ratio should only be used as a broad tool for narrowing down the zip code(s) an investor should target for potential properties.

(click to interact with the data)

PTR Dashboard.PNG

Within the given zip code, an investor should still consider the mix of property types available and whether these meet their investment criteria.  For example, investors who want to focus on building their net worth will often choose to buy single-family homes, whereas those who prioritize cash flow will often search for multifamily structures.  Some markets may no longer zone parcels for multi-family homes, and therefore, the only available properties will be older and require higher maintenance costs.  However, properties in poor condition may also offer opportunities for discounted prices.  Investors should have a clear plan for the characteristics they are looking for in a property beyond something like a PTR analysis.

Stay tuned for more real estate tools and updates!

Long term care costs

My work to date has focused on home and community-based services, which are a subset of long term care services.  Long term care (LTC) refers to services that help the elderly and those with disabilities meet health or personal needs.

These services can be provided in a variety of places, such as:

  • Your home
  • A nursing home
  • An assisted living facility
  • An adult day care center

Why should you care

If you do not have insurance to cover long term care, you will have to pay for it out-of-pocket (or rely heavily on unpaid family caregivers).  National spending on long term care increased by 7.7% between 2013 and 2014, and it is estimated that 70% of the 65+ population will use LTC in their lifetime.

  • Regular health insurance doesn’t cover long term care.
  • Medicare only covers short nursing home stays or limited amounts of home health care when you require skilled nursing or rehab. It does not pay for custodial care, which includes supervision and help with day-to-day tasks.
  • You can get help with long term care from Medicaid, but only after you have exhausted most of your savings. Many providers also choose to not take Medicaid payments, so your provider options will be limited.

The viz

Genworth, an LTC insurance company, produces an annual report of LTC costs based on a survey of over 15,000 LTC providers.  I used reports from 2010-2016 to build out the following data visualizations, which summarize national costs, compare costs across states and estimate how much you might spend on long term care in your state.  The data covers the following services:

  • Home health aide: Assistance with bathing, dressing, transferring and toileting, but not with catheters or injections
  • Homemaker: Assistance with shopping, finances, cooking, errands and transportation
  • Adult day health center: Structured day programs (including health, social and other support services) designed to meet the needs of adults who are functionally and/or severely cognitively impaired; services are intended to enable individuals to live more independently in the community
  • Assisted living facility: Licensed facilities generally provide housing and additional services; each state has its own licensing standards
  • Nursing home: Medicare-certified nursing facilities, which make up greater than 90 percent of all nursing homes in the U.S., and include housing, three meals a day, laundry, sundries, basic nurse supervision and generic non-prescription pharmaceuticals; the data is divided by costs for a private (single occupancy) bedroom and a semi-private (double occupancy) bedroom

(click the image to interact with the data)

ltc-costs

New beginnings

I have wanted to start a blog focused on data and healthcare for some time and finally decided to take the plunge as part of my  new year’s resolutions.  Every new year marks a new beginning.  This time last year I was starting a new job.  This year, I will be marrying the love of my life and we will be starting a new life together.  Because I’m far along in the wedding planning process (not a Bridezilla yet!), I thought it would be apt for my first blog post to be a visualization of our guest list.  I love learning new data tricks, so for this one I used the Great Circle Distance formula (using the average radius of the Earth) to calculate the distance between the wedding location (Durham, NC) and each of our wedding guests.  Click on the image to interact with the Tableau visualization.

weddingguests

I’m looking forward to sharing more data in the coming year!