A pharmacist colleague made an interesting remark today while we were working and I couldn’t help but think about it long after our discussion had ended. This pharmacist graduated in 2007 and grew up in a pharmacy household. Her father owns five independent pharmacies so she is familiar with small business. While we were discussing our health benefit plans through our current corporate employer she made the comment that her parents pay nearly $20,000 a month for health insurance for all of their employees. What she didn’t tell me was how many employees that includes, what types of benefits does that cover, and what is that number as a percent of sales for the pharmacies. Her comment was made in a complaining tone of voice, like “gosh it is expensive to pay for health insurance for employees.”
While I’m sure $20,000 per month sounds like a big expense we have to remember that everything is relative. If that figure comes from the cost to insure employees at five separate pharmacies then we can do a little guesswork to figure how big that number really is. For instance, assuming the five pharmacies are average independent pharmacies then after all expenses are paid each pharmacy will bring a net income that is 3% of sales. At an average sales of about $6 million per year per pharmacy, total sales would be about $30 million. This means a rough guess would put her parents’ net income (after all bills are paid) to around $900,000 per year. Let me say that again, her parents make nearly $1 million dollars per year after paying all of their expenses, including the measly 20,000/month for health insurance for employees. Not too shabby considering the median household income in this country is $40,000.
I guess I overanalyze things a little bit, but I can’t help it when simple statements are made to explain complicated situations.


