Why The Emphasis On Transgender?

Follow the Money

Have you thought about why there is so much news about transgender surgery?  It seems we have shifted our social focus from being gay and abortions to the radicalness of transgenderism.  Part of the reason is the legal war that gay groups fought was won, and abortion has been rendered meaningless as a federal issue due to the Dobbs decision.

Except, there is more.  As they say, follow the money.  It’s hard to quantify the costs and arrive at net profit.  It is possible to estimate top-line revenues and discount them back to the present value of those revenues to see why decisions are being made.   One of the metrics businesses use to make strategic decisions about the business is the customer acquisition cost (CAC) of getting one customer versus the long-term value (LTV) of that customer.

There are ways to look at this without making value judgments about abortion and transgenderism. Personally, I am pro-life. The clump of cells is human and I think we can change a lot of the things that cause people to make the choice to become pregnant. School choice, supporting nuclear families, and other policies would decrease the rate of abortion in the US. When people have hope, they make different decisions.

I am against transitioning anyone’s sex until after the age of 18 and I don’t think insurance should pay for it. I am also against males playing female sports, or using female locker rooms or bathrooms.

But, those are my values. They might not be someone else’s. However, when you look at the cashflows, you might understand why things are served up the way they are.

I am against government mandates to any kind of care in both these areas. Mandates cause problems and costs to rise for everyone.

Let’s look at each via the cold objective eye of business. Draw your own conclusions and leave them in the comments. I guarantee there will be controversy over this post simply because of the topics.

Customer acquisition costs are high in the abortion business. We are going to assume that only women can get pregnant.  First, you can only market to females who have the ability to get pregnant.  There are 65.54 million women between the ages of 15 and 45 in the US.  Secondly, of that market segment, there is a minority of them that actually want an abortion.  There are 3.6MM births per month in the US compared to 88K abortions, or 2%.  It costs money to get the word out and advertise.  This raises the costs of acquiring customers. When you are only targeting 2% of an entire marketplace, it’s not a good business model.

Once a customer is acquired, there is only one transaction.  One and done. An abortion is performed and the customer walks away.  According to abortion rights advocate Gruttmacher, abortions are increasing in number nationwide, not decreasing.  This data flies in the face of anyone who is breathing heavily over the Dobbs decision that overturned Roe v Wade and turned the decision over to the states. In 2023, the monthly abortion rate in the US was 87,800 per month.  Also according to Guttmacher, the incidence of repeat abortions is low.   That makes the business model even worse.

By the way, I would not spend any government money on abortion. Make it a 501(c)(3) and let donors who believe in it support it.

This is not the case with transgenderism cash flows. It is not a one-and-done business model.  There is an entire stream of payments that come with a one-time customer acquisition.  There is psychological diagnosis, then counseling.  There is a regiment of drug treatments to stop pubescent growth, or to change hormones post puberty.  Finally, there is the radical surgery necessary to turn one sex into another sex followed by more hormone therapy and quite possibly more psychological counseling. 

I also wouldn’t do any public insurance or mandated insurance for transgender. If someone wanted to pay for a rider on their policy, fine. It should be private, not public.

Let’s look at the cash flows of each business. 

I checked the abortion advocate Planned Parenthood’s website to see the costs. Morning-after pills range from $580 to $800 depending on where you access them.  If you get an in-clinic abortion during the first trimester, the cost is $600 to $800.  Once you are past the first trimester, the costs rise significantly to $1500-$2000 later in the second trimester.  Of course, some states allow abortions in the third trimester, and Virginia, Illinois, and California have “born alive” statutes on the books.  Predictably, third trimester abortions are even more expensive. 

Insurance doesn’t usually cover elective abortion procedures so that money comes out of a person’s pocket.  If we use Gruttmacher’s numbers, the business is a $61.4 million monthly business assuming most abortions happen in the first trimester.  That is a $737 million per year business.  This would be considered a small or midsize business by a consultant or private equity firm.  It’s not a Fortune 500 business. It is not a scalable startup venture-backed business model.

Here is the math behind that calculation.  I used the 87,800 abortions per month nationally times the average cost of a first-trimester abortion $700.  I assume that they all are first-trimester abortions.  The morning-after pill and the procedure are the same average price. Again, this doesn’t even factor in the second trimester and beyond abortions, and the monthly cash flow would be a bit higher if we did.

Let’s look at the cash flows for the transgender industry.  When you analyze the cash flows, it’s easy to see why advocates for transgenderism are pressuring independent health insurance companies to cover the costs.  If they do, the transgender business becomes a discounted cash flow gold mine. 

The total cost to transition is higher to go from a man to a woman than a woman to a man.

Top surgery to transition averages for $8,000.  “Bottom” surgery is significantly more expensive, $25,000.  In the following cash flow analysis, I don’t take those costs into account because they are “one and done” cash flows.  It’s $33,000 per person and at 1.6MM people results in a total one-time revenue stream of $52.8 billion. 

The real money is in the drug cocktail Transgenders take for the rest of their lives.  They will spend $40 to $400 per month on hormone drugs.  The average cost is $2,880 per year.  If a person transgenders at age 18, the age of consent, and lives to the full life expectancy of 77, that’s 59 years of consistent payments or 708 months.  

Using a discounted cash flow analysis, one can see what that customer is worth today.

I used a discounted cash flow analysis calculator that uses the normal DCV formula to analyze cash flows.  I assumed a 1% growth rate in the cost of hormones and discounted the cash flows back using a 5% discount rate.  The 5% is roughly the current US 10-year note rate.  I also used a 0% terminal value because once a person is dead, they don’t need the drugs and there is nothing to sell.

The cash flow has a discounted cash flow of roughly $70,863 over the life of the person.  If we take that $70k and divide it by the total number of months (709) a person is expected to use the drugs, it’s a monthly discounted cash flow of $100. 

According to the Williams Institute at UCLA, there are roughly 1.6 million people in the US who identify as transgender.  Out of all transgenders, 25% are 13-17 years old and need to be taken out of cash flow calculations because they are minors.  That yields a monthly discounted cash flow of $120MM per month, or $1.4 billion per year.  That’s just for the drugs.

Of course, there are plenty of other costs involved with changing your sex from one to another.

Looking at the payment stream for puberty blockers that minors will use creates a totally different and significantly higher stream of cash flows.  It also seeds the ground for the next stream of cash payments that we analyzed above, lowering those customer acquisition costs to almost 0. Using the Williams Institute numbers, we assume 600,000 people between the ages of 13-17 identify as transgender.  In the analysis, we also assume 100% of them use puberty blockers.  Those drugs cost roughly $1200 per month, or $14,400 per year, to inject puberty blockers into minors.  Using the same assumptions as above, this results in a net discounted cash flow of $64,000 per person. The net discounted yearly cash flow for minors using puberty blockers is $7.7 billion per year.

 It’s also possible to implant a device that will release puberty blockers.  Those cash flows are even more.  Depending on the implant, the cost is $4500 to $18,000.  They need a new implant each year.  The discounted net present value of implants on all minors who identify as transgender is $300 billion, or $60 billion per year.

Of course, there is a choice between monthly drugs or an implant, but you can see the incentive for drug companies to try and get the implants. The actual cash flow will be a combination of these numbers because some people will choose one or the other. They do not need both.

Now we are talking about some rambunctious positive long-term values of a customer, and you can see why there is such a push for transgenderism.  You can also see why the Transgender Industrial Complex led by legal groups such as Lambda Legal is petitioning and filing lawsuits to get insurance companies to cover the costs. They already have won the “Gay Wars” and need a reason to exist.

The above costs ignore the costs of psychological therapy which many people engage in before and after surgery.  According to Good Therapy, the cost of an hour of counseling is between $60 and $250.  It’s impossible to predict with any accuracy how many hours of counseling a person would use pre and post-operation.  But, you can estimate in your head given the other numbers that the net positive discounted cash flows are staggering. 

When one looks at the abortion business and transgenderism business, it’s clear which one pays more.  Seeing the cold hard cash flows inform everyone why there is such a push for transgenderism in the mainstream today.  That ignores the political goals that align with the left wing of American politics.

There is an entire billion-dollar opportunity available for the taking when you analyze the life cycle of cash flow for transgenderism.  It is also okay to note that the ideas put forth by transgenderism go against eons of experience and ideas about humanity that have been with mankind since its inception.   It is also worth noting that abortion is not health care, and in sum, it hurts our society.

If you can get people to reject the obvious, you can get them to do anything.