The Lottery Paradox: Why Betting Against Rare Healthcare Events Is a Risky Strategy

In philosophy, the Lottery Paradox asks: If you know one ticket will win, but each ticket is unlikely to win, is it rational to believe each ticket will lose?

It’s a cautionary tale about how we misjudge low-probability, high-impact events.

In healthcare, self-funded employers fall into the same trap every day, especially with organ transplants, gene therapies, and CAR-T treatments. The cost of this thinking? Seven-figure claims that blow past stop-loss.

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“It’s Unlikely to Happen to Us…”

Employers aren’t wrong. Each catastrophic event is rare. But here’s the paradox: Individually unlikely ≠ Collectively avoidable.

With the pace of medical innovation, the probability that something high-cost will hit your plan is not “if,” it’s “when.”

You’re not betting on a single ticket. You’re holding the entire raffle.

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For Self-Funded Employers and Their Advisors: This Is Not Theoretical

If you’re a benefits consultant or broker, you’ve likely heard “These treatments are edge cases, so we don’t need to prioritize them.”

The data says otherwise:

• 69,000+ U.S. transplants each year
• CAR-T therapy use growing rapidly, especially in younger cancer patients
• Gene therapies accelerating, with multiple $2–3M FDA-approved treatments already in play
  
  

For groups with 5,000+ members, these cases are no longer hypothetical. They’re actuarial certainties.

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When Rare Hits, It Hits Hard

High-cost medical events:

• Routinely blow through stop-loss budgets
• Trigger out-of-network costs (even at “in-network” hospitals)
• Are often managed via carve-out networks with poor transparency
• Can vary by $200K–$1M+ depending on routing and contract type
  
  

At HealthRate, we see:

• The same hospital billing wildly different rates for the same transplant based on referral source
• Gene therapies marked up by hundreds of thousands (sometimes millions)
• Specialty networks charging 20–40% more than direct contracts for identical cases
  
  

How Advisors Use HealthRate to Win on Risk Management

We help you intervene before the bill arrives by:

• Flagging internal provider rate variance across networks
• Modeling stop-loss exposure before the claim hits
• Comparing clinical outcomes and reimbursement rates
• Identify opportunities for high-quality, lower cost services

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This Is an Advisory Moment

For brokers and consultants, managing million-dollar claim risk isn’t optional—it’s where strategic value is proven.

With HealthRate, you shift the client conversation from “That’ll probably never happen” to “Here’s exactly how we’re protecting your plan from it.”

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Bottom Line: The Paradox Holds

Each event may be rare. But some event will happen.

The only irrational move? Believing otherwise.

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Ready to protect your plan from the next million-dollar surprise?

If you’re a benefits consultant or self-funded employer, contact us for a free exposure analysis, or preview our analytics tools in action.