Go to whoever you use to read SEC reports and look at the June 2009 8K.
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K United Health Care Group Revenues $ 21.66 billion Operating Margin 6.6 %
UnitedHealth Group’s consolidated second quarter revenues of $21.7 billion increased $1.4 billion or 7 percent year-over-year. Second quarter investment income of $153 million decreased $87 million year-over-year, which reduced net earnings by $0.05 per share. While cash and invested asset balances increased 8 percent year-over-year at June 30, 2009, capital market conditions meaningfully reduced yields on the Company’s cash and short duration, high quality investment portfolio. UnitedHealth Group results included net capital gains of $3 million and $50 million in the second quarters of 2009 and 2008, respectively. Second quarter earnings from operations were $1.4 billion and net earnings were $859 million. The operating margin of 6.6 percent decreased 60 basis points from the prior year operating margin of 7.2 percent, with 40 basis points of the change due to reduced investment income and the balance due to business mix changes driven by strong growth in comparatively lower margin government-sponsored business at AmeriChoice, Ovations and OptumHealth. Second quarter 2009 net earnings of $0.73 per share increased $0.06 or 9 percent from $0.67 per share in the second quarter of 2008.
Minnesota 1-10864 41-1321939 (State or other jurisdiction of incorporation) (Commission File Number) (I.R.S. Employer Identification No.) UnitedHealth Group Center, 9900 Bren Road East, Minnetonka, Minnesota 55343
Robert, I am reading the report and have yet to find the profit they are talking about. I need to read each individual company under the UNH umbrella. I am not sure if by fee based they mean supplying stop-loss for self insurance groups. They have their risk based health plans and I believe that is what we know as regular health insurance. The MCR as you know is a measure medical costs as a percentage of premium revenues received.
UnitedHealthcare Second quarter revenues of $10.3 billion decreased $223 million year-over-year. During the second quarter UnitedHealthcare experienced declines of 150,000 people served through fee-based programs and 260,000 people in risk-based health benefit plans. Membership attrition at continuing clients driven by economic pressures on their organizations was the most significant factor in the decreases, accounting for three-fourths of the total membership decline. The UnitedHealthcare medical care ratio of 84.2 percent was within the range of management expectations, increasing 40 basis points year-over-year, largely due to elevated medical costs related to the H1N1 virus.
UnitedHealthcare
•
Second quarter revenues of $10.3 billion decreased $223 million year-over-year. During the second quarter UnitedHealthcare experienced declines of 150,000 people served through fee-based programs and 260,000 people in risk-based health benefit plans. Membership attrition at continuing clients driven by economic pressures on their organizations was the most significant factor in the decreases, accounting for three-fourths of the total membership decline.
•
The UnitedHealthcare medical care ratio of 84.2 percent was within the range of management expectations, increasing 40 basis points year-over-year, largely due to elevated medical costs related to the H1N1 virus.
Ovations (I think this their Medicare Advantage Program and saw a big revenue growth)
•
Ovations revenues were $8.0 billion in the second quarter, up $928 million or 13 percent year-over-year.
•
For Medicare Advantage programs, Ovations reported second quarter growth of 45,000 people and year-to-date growth of 245,000 people or 16 percent. Strengthened product design, marketing and distribution and local market engagement drove strong, balanced growth in Medicare Advantage.
•
Steady growth in active Medicare Supplement products has continued in the second quarter, with Ovations increasing the number of seniors served in this product family by 25,000 to more than 2.6 million people.
AmeriChoice
They also have under the umbrella:
Business Description – Ingenix
Ingenix is a leader in the field of health care information, services and consulting, serving pharmaceutical companies, health insurers and other payers, physicians and other health care providers, large employers and governments. The Ingenix contract revenue backlog increased 22 percent on a year-over-year basis to $2.2 billion at June 30, 2009.
Operating margins went from 12.9% to 14%
Business Description – Prescription Solutions
Prescription Solutions offers a comprehensive array of pharmacy benefit management and specialty pharmacy management services to employer groups, union trusts, seniors and commercial health plans.
Operating margins increased from 3% to 4.7%
This is for all operations including their consulting business.
EARNINGS FROM OPERATIONS
2009
2008
Health Care Services
$
1,073
$
1,144
OptumHealth
142
169
Ingenix
59
49
Prescription Solutions
166
94
Corporate
—
(783)
Total Consolidated
$
1,440
$
673
So what they did was take last years quarterly that had a large corporate write off of (783) which lowered their quarterly earnings and compared this year quarterly earning that didn't have that write off.
Now, this is a site that has a lot of people that deal with numbers. You tell me, ya think the AP was doing good reporting as investment research would require or were they trying to make a good story?
The six month report went this way (including the (783 write down)
First column is this year second is last year.
3,108
$
2,386
People Served
People Served
June 2009
March 2009
December 2008
June 2008
December 2007
Commercial Risk-based
9,655
9,915
10,360
10,490
10,805
Commercial Fee-based
15,375
15,525
15,985
16,000
14,720
Total Commercial
25,030
25,440
26,345
26,490
25,525
I'm not sure where the big drop off is in people served.
The reports are public information docs and if you think I doctored this ...have a go at it and get the report. This is not what I want to be doing on a nice afteroon. It is long but just glancing I think the person writing the story did not read the segmented financial information.
Here is the most recent 10K and shows 2007 & 2008 net earnings for the years ending:
For the Year Ended December 31,
(in millions, except percentages and per share data)
2008 (a,b)
2007 (a,b)
2006 (a,b)
2005 (b)
2004 (b)
Consolidated Operating Results
Revenues
$
81,186
$
75,431
$
71,542
$
46,425
$
38,217
Earnings From Operations
$
5,263
$
7,849
$
6,984
$
5,080
$
3,858
Net Earnings
$
2,977
$
4,654
$
4,159
$
3,083
$
2,411
I just don't know? I'm not finding the smoking gun? Maybe I've been away from the business too long to find the smoking gun but there doesn't seem to be a health insurance segment that has had a 200% net earnings increase. They may be seeing something in the Medicare Advantage / Plan D Bush fiasco but in the general health insurance market....?
Let me know if you find it because I've lost the energy to keep looking.
And I still don't understand it. It could be I am dense but check "Myth #2":
Subprime Mortgages Promoted Homeownership. So, the author is saying this not true. Right? Then a few sentences later she says:
These subprime loans did contribute to an increased level of homeownership in the country—at the time of mortgage origination.
What am I missing? Then her conclusion is kind of a leap:
Given that there were more defaults among all (not just first-time) homebuyers with subprime loans than there were first-time homebuyers with subprime loans, it is impossible to conclude that subprime mortgages promoted homeownership.
Something is wrong with the logic. Couldn't there be a correlation between increase in first time home-buyers and and increases in sub-prime loan origination? Why then did she look at defaults and say sorry it didn't promote homeownership.
US Bureau of Labor Statics says "Top executives held about 2.1 million jobs in 2006" and highest total employed persons in 2006 as 146 million. So roughly 1.5% of the total workforce. Basically the the 1 percenters.
because of expanded oil production. In 1980, the country produced around 180,000 barrels of oil a day. By 2006, that had risen to round 1,700,000 barrels.
Brazilian ethanol production in 2006 was around 330,000 barrels daily.
It's crude oil that made Brazil energy independent, not ethanol.
Ethanol is a non-starter, it costs more in energy terms to produce than it puts out.
It sure as hell is but the WSJ even sees this is a major problem now. I mean 33% of all income in the hands of a few? That's incredible and we can't get any traction whatsoever in corporate reforms or executive compensation restructuring.
But who cares right? the DOW went about 9,000.
That's what I see happening, the massive cliff diving is over (I think all green shoots and brown weeds can agree on this one, we're no longer in a cliff diving economy?) so it's like all of these major deep structural problems in the economy are going to get ignored again because they are not right in the face of people with that "crisis/panic" feeling.
I don't know where you are getting this, just to to Yahoo Finance, plug in almost any stock for the health sector and there is quite a different story.
I ran an investment business for 20 years and was a State RIA for two years. Over the years I did a lot of research for clients that wanted safe investments, not growth stuff and would look at insurance companies.
You seem to think that health insurance has a big profit margin and historically that is not true.
I can tell you how to save a quick 2 or 4 percent off the top. Make the States stop their gross premium tax. A gross premium tax is on premiums collected, not after expenses.
Insurance agents (those people everyone loves to hate) make about 3% commission from Blue Shield / Cross. Commissions decline after first year. Private insurance companies could if they wanted, follow Medicare's model and have a skeleton fraud unit. Insurance companies are vigilant on fraud and it does cost (if I remember) maybe 5% to 8%. But it saves $millions maybe $billions.
Three years ago, soaring medical costs and shifting consumer demands put more than 80 percent of the nation's 55 Blue Cross and Blue Shield plans in the red, according to insurance watchdog Weiss Ratings. A merger between Pennsylvania Blue Shield and Blue Cross of Western Pennsylvania produced one of the biggest bleeders: Highmark, the new $6.6 billion combined entity, saw an approximately $90 million operating loss in 1998, the second largest in the country.
Like most health-care insurers, Pittsburgh-based Highmark somewhat insulated itself from industry woes by maintaining a strong investment portfolio. But CFO Bob Gray, who started his career as a general manager at Pennsylvania Blue Shield in 1987, knew that a successful turnaround depended on curing operational ills as well. "Our business is not that complicated; it's about pricing products appropriately and managing claims-processing costs," says Gray. At the time he was promoted to CFO in 1998, however, both factors were out of control. The year before, medical costs had overwhelmed underwriting revenues, creating losses of about $1 million per day, and claims-processing expenses were unnaturally high, due to aged and redundant information technology.
Gray developed a three-year plan to address these issues and restore operations to profitability by 2000. Last year, the timetable met, the now-$9 billion company recorded a 1.7 percent operating profit margin, far above the 0.6 percent industry average cited by Weiss. In addition, more than $100 million has been sliced out of annual claims-processing expenses. And CEO John Brouse believes Gray, the winner of this year's CFO Excellence Award for Turnaround Management, has set Highmark on course for "a sustainable, predictable level of financial performance" for years to come.
Out of the almost $550 billion in premium dollars spent by insurers nationwide in 2002 – the most recent year for which such statistics are available – nearly three-fourths went toward the three major drivers of health care costs:
hospital services
physician and clinical services
prescription drugs
.Experts say all of these services cost more today than they did 15 years ago, even accounting for inflation
High hospital costs
Although spending has slowed, the problem is it has not slowed enough. The cost of providing health care to people with private insurance still grew twice as fast as the overall U.S. economy last year.
This is an improvement over two years ago, but "spending is still increasing at a very fast rate," Some services continue to drive spending more than others.
The slowest-growing has been physician services, on which spending has been fairly static for years as insurers control the reimbursement for physicians.
Overall prescription drug spending is still high, as are pharmaceutical industry profits. But such spending has slowed dramatically in recent years, with the rate dropping from a peak of 18 percent in 1999 to 9 percent last year, the center's report said. Part of this slowdown comes from cost-sharing, experts believe, as plans with tiered drug benefits encourage use of cheaper generics.
"What is driving (insurance) costs right now is a big increase in hospital costs," said Claxton, the Kaiser Family Foundation vice president. "Hospitals are bargaining harder with managed-care plans, and getting bigger increases than they were before."
This, insurance experts say, led to a surge in the use of medical services, which once again drove up health care costs.
The growth was exacerbated by increased use of prescription drugs. Costly new "blockbuster" therapies, such as Prozac for depression, and lifestyle drugs, such as Viagra for sexual dysfunction, became available.
My research was from years ago but I doubt if cost has slowed or health insurance company profits have increased. I no longer pay for premium services to get 10Q/10K or other SEC reporting.
The Kaiser Family Foundation mentioned above is often an advocate for the uninsured.
Out of the 1300 insurance companies, I am sure there are some health companies that are bad actors, make higher profits, etc. But the big players, the ones we all know can't get away with the nonsense of the bad actors.
This is the 2009 10Q for Coventry Health
COVENTRY HEALTH CARE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
Total operating revenues
3,573,589
Total operating expenses
3,500,675
Earnings before income taxes
70,668
Provision for income taxes
26,500
Net earnings
$
44,168
Here is the S&G expenses
Selling, general and administrative as a percentage of revenue
16.1%
The above is far from the 30% I always hear. That S&G costs are people, secretaries, the person working in the mail room and yes...that possibly/probable overly paid CEO. S&G costs don't mean that they are useless and don't offer value.
As I have said before, when Medicare starts paying a fraud unit, when Medicare starts including wages for the people over at CMS, I will start to listen. The admin cost the government gives for Medicare is skewed. Another example: Medicare uses a cost per claim analysis. Well the elderly normally have a higher claim than younger people. Private insurance normally has more young, healthy people, therefore the normal client has lower claim amounts. Using the Medicare method for determining administration of claims, even if the same amount of time is spent on the young low claim, Medicare would assign a higher administration ratio to the young, low claim amount. The Medicare math does not give a picture of the cost to adjudicate a claim per person and is what many call misapplication of statistics.
I damn well guarantee you that if Medicare uses the generally accepted administrative cost per person analysis, the low Medicare admin. cost we hear will be gone.
Maybe I go back to my days with hair to my waist (I'm a guy), falling back to my 1960's mistrust of government. But the more I look at their stats the more I find them misleading.
Hm? This got long, maybe it should have gone over to another place. I am always open to new information. So if someone has information that Medicare uses mathematics admin figures that are based on the claim per person.
White House National Economic Council Director Lawrence Summers said it was too early to dismiss the Fed idea.
“I think it’s way premature to be talking about anything like that,” Summers said in a July 20 interview with Bloomberg News. “We’re very focused on what we think is the best way to contain these risks.”
Oh Larry, fighting for the financial oligarchy to the very end.
if you're saying you wrote a blog post elsewhere, just change the title, little of the first few sentences, etc. and cross post on EP, we have a lot of readers very involved in trade, manufacturing, so they love posts on China, if you're looking at those details, well cited research, they appreciate it.
Did you know China has engineers on their team of economic strategists?
Do you know the U.S. doesn't have an economic strategy team, based on the national interest?
(economic advisers are not long term strategic planning)
but that brings to light even more EP's mantra of when in doubt to use one's calculator....it's really only by focusing in on data, returning to facts, stats, data over and over can one get past the noise.
...today. It's a good move for China. Their portfolio is a little lopsided in USD ;-) Their moving quite firmly these days, getting themselves positioned, and I think their currency swap trade policy will be good for the stability of the global marketplace. Not only are they now GM's largest auto customer, but they're making some very farsighted moves in the energy and environment sectors:
China considers environmental tax
A new unified environmental tax is possible but legislators remain divided over how to introduce it. Although the idea of reforming the system by which polluters are taxed was first proposed two years ago, it was fast-tracked in May, along with changes to resource and property tax, by the National Development and Reform Commission in its state-council-approved plan for deepening economic reforms.
The green answer is wind and sun
In China there are reports of another goverrnment financial stimulus around the corner. Aimed exclusively at boosting the country’s renewable energy sector, it is variously said to be worth between $440 billion and $660 billion. The sheer amounts involved, say analysts, suggest that Beijing is thinking seriously about how to make the switch from being the world’s all-purpose (and rather dirty) factory, to becoming a global hub for clean technologies.
CNOOC, Sinopec to partner on Angolan oil deal
CNOOC and Sinopec plan to buy a 20% stake in an Angolan oilfield from American energy firm Marathon Oil for US$1.3 billion through a 50-50 joint venture, the Financial Times reported. The deal is the latest in a string of energy and resource investments by Chinese firms; in late June, Sinopec announced that it would buy Toronto- and London-listed Addax Petroleum.
China launches major solar subsidy
China launched a plan to offer significant subsidies to independent solar power projects, Reuters reported. The move is aimed at boosting the country's solar energy sector and could draw more than US$10 billion in private funding, putting China on track to become a leading market for solar equipment in the next couple of years.
The sun is probably setting on the US -- after all, we did contaminate the entire world market with our nasty paper and fake ratings. There's a price to pay for that. We aren't just going to get away with it. And our ugly little wars permanently damaged US good will years ago.
As for the petrodollar, does anyone still use dollars to buy oil? I heard the Saudis were no longer accepting dollars after the first of next year.
But it is way past time to truly be on the path of energy independence. Brazil is energy independent. It took Brazil several decades but they did from scratch with American automakers producing flex-fuel vehicles.
We have the advantage that much of the technology has already been developed to use alternative fuels. It is a matter of making the jump.
Either of these alone is bad, but if a CIT bankruptcy accelerates the rate of CRE foreclosures, then it could put banks that are heavy in CRE at much greater risk.
I don't know if I was the first to put these two together (I highly doubt it), but it does seem that the issues I raised are coming to a head.
So do you suppose that if this all comes together the people that dismissed this as "conspiracy" will admit that they were wrong?
Go to whoever you use to read SEC reports and look at the June 2009 8K.
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K United Health Care Group Revenues $ 21.66 billion Operating Margin 6.6 %
UnitedHealth Group’s consolidated second quarter revenues of $21.7 billion increased $1.4 billion or 7 percent year-over-year. Second quarter investment income of $153 million decreased $87 million year-over-year, which reduced net earnings by $0.05 per share. While cash and invested asset balances increased 8 percent year-over-year at June 30, 2009, capital market conditions meaningfully reduced yields on the Company’s cash and short duration, high quality investment portfolio. UnitedHealth Group results included net capital gains of $3 million and $50 million in the second quarters of 2009 and 2008, respectively. Second quarter earnings from operations were $1.4 billion and net earnings were $859 million. The operating margin of 6.6 percent decreased 60 basis points from the prior year operating margin of 7.2 percent, with 40 basis points of the change due to reduced investment income and the balance due to business mix changes driven by strong growth in comparatively lower margin government-sponsored business at AmeriChoice, Ovations and OptumHealth. Second quarter 2009 net earnings of $0.73 per share increased $0.06 or 9 percent from $0.67 per share in the second quarter of 2008.
Minnesota 1-10864 41-1321939 (State or other jurisdiction of incorporation) (Commission File Number) (I.R.S. Employer Identification No.) UnitedHealth Group Center, 9900 Bren Road East, Minnetonka, Minnesota 55343
Robert, I am reading the report and have yet to find the profit they are talking about. I need to read each individual company under the UNH umbrella. I am not sure if by fee based they mean supplying stop-loss for self insurance groups. They have their risk based health plans and I believe that is what we know as regular health insurance. The MCR as you know is a measure medical costs as a percentage of premium revenues received.
UnitedHealthcare Second quarter revenues of $10.3 billion decreased $223 million year-over-year. During the second quarter UnitedHealthcare experienced declines of 150,000 people served through fee-based programs and 260,000 people in risk-based health benefit plans. Membership attrition at continuing clients driven by economic pressures on their organizations was the most significant factor in the decreases, accounting for three-fourths of the total membership decline. The UnitedHealthcare medical care ratio of 84.2 percent was within the range of management expectations, increasing 40 basis points year-over-year, largely due to elevated medical costs related to the H1N1 virus.
UnitedHealthcare
Second quarter revenues of $10.3 billion decreased $223 million year-over-year. During the second quarter UnitedHealthcare experienced declines of 150,000 people served through fee-based programs and 260,000 people in risk-based health benefit plans. Membership attrition at continuing clients driven by economic pressures on their organizations was the most significant factor in the decreases, accounting for three-fourths of the total membership decline.
The UnitedHealthcare medical care ratio of 84.2 percent was within the range of management expectations, increasing 40 basis points year-over-year, largely due to elevated medical costs related to the H1N1 virus.
Ovations (I think this their Medicare Advantage Program and saw a big revenue growth)
Ovations revenues were $8.0 billion in the second quarter, up $928 million or 13 percent year-over-year.
For Medicare Advantage programs, Ovations reported second quarter growth of 45,000 people and year-to-date growth of 245,000 people or 16 percent. Strengthened product design, marketing and distribution and local market engagement drove strong, balanced growth in Medicare Advantage.
Steady growth in active Medicare Supplement products has continued in the second quarter, with Ovations increasing the number of seniors served in this product family by 25,000 to more than 2.6 million people.
AmeriChoice
They also have under the umbrella:
Business Description – Ingenix
Ingenix is a leader in the field of health care information, services and consulting, serving pharmaceutical companies, health insurers and other payers, physicians and other health care providers, large employers and governments. The Ingenix contract revenue backlog increased 22 percent on a year-over-year basis to $2.2 billion at June 30, 2009.
Operating margins went from 12.9% to 14%
Business Description – Prescription Solutions
Prescription Solutions offers a comprehensive array of pharmacy benefit management and specialty pharmacy management services to employer groups, union trusts, seniors and commercial health plans.
Operating margins increased from 3% to 4.7%
This is for all operations including their consulting business.
Health Care Services
OptumHealth
Ingenix
Prescription Solutions
Corporate
Total Consolidated
So what they did was take last years quarterly that had a large corporate write off of (783) which lowered their quarterly earnings and compared this year quarterly earning that didn't have that write off.
Now, this is a site that has a lot of people that deal with numbers. You tell me, ya think the AP was doing good reporting as investment research would require or were they trying to make a good story?
The six month report went this way (including the (783 write down)
First column is this year second is last year.
People Served
People Served
2009
2009
2008
2008
2007
Commercial Risk-based
Commercial Fee-based
Total Commercial
I'm not sure where the big drop off is in people served.
The reports are public information docs and if you think I doctored this ...have a go at it and get the report. This is not what I want to be doing on a nice afteroon. It is long but just glancing I think the person writing the story did not read the segmented financial information.
Here is the most recent 10K and shows 2007 & 2008 net earnings for the years ending:
(in millions, except percentages and per share data)
Consolidated Operating Results
Revenues
Earnings From Operations
Net Earnings
I just don't know? I'm not finding the smoking gun? Maybe I've been away from the business too long to find the smoking gun but there doesn't seem to be a health insurance segment that has had a 200% net earnings increase. They may be seeing something in the Medicare Advantage / Plan D Bush fiasco but in the general health insurance market....?
Let me know if you find it because I've lost the energy to keep looking.
And I still don't understand it. It could be I am dense but check "Myth #2":
Subprime Mortgages Promoted Homeownership. So, the author is saying this not true. Right? Then a few sentences later she says:
What am I missing? Then her conclusion is kind of a leap:
Something is wrong with the logic. Couldn't there be a correlation between increase in first time home-buyers and and increases in sub-prime loan origination? Why then did she look at defaults and say sorry it didn't promote homeownership.
It is the most recent calculation performed by the Census Bureau in 2007.
not incorporating this new data. I'll bet we just blew past Mexico at least in income inequality.
the U.S. Gini Index is 46.4. That is about the same as Mexico, Malaysia, China and Uruguay
Oh, BTW the "socialist" country of Sweden has one of the lowest Gini Index at 25.
The lower the Gini Index the more equal income distribution.
That is absolutely astounding. So, about 1.5% of the entire workforce is getting 33% of the income.
If this doesn't prove a feudal corporate class, or financial oligarchy, I just don't know what does.
Perhaps anonymous drive by would consider creating an account and joining in to help us dig deeply into the stats!
Thanks again.
US Bureau of Labor Statics says "Top executives held about 2.1 million jobs in 2006" and highest total employed persons in 2006 as 146 million. So roughly 1.5% of the total workforce. Basically the the 1 percenters.
http://www.bls.gov/oco/ocos012.htm
because of expanded oil production. In 1980, the country produced around 180,000 barrels of oil a day. By 2006, that had risen to round 1,700,000 barrels.
Brazilian ethanol production in 2006 was around 330,000 barrels daily.
It's crude oil that made Brazil energy independent, not ethanol.
Ethanol is a non-starter, it costs more in energy terms to produce than it puts out.
It sure as hell is but the WSJ even sees this is a major problem now. I mean 33% of all income in the hands of a few? That's incredible and we can't get any traction whatsoever in corporate reforms or executive compensation restructuring.
But who cares right? the DOW went about 9,000.
That's what I see happening, the massive cliff diving is over (I think all green shoots and brown weeds can agree on this one, we're no longer in a cliff diving economy?) so it's like all of these major deep structural problems in the economy are going to get ignored again because they are not right in the face of people with that "crisis/panic" feeling.
As noted yesterday in the hearing on Capital Hill, the Fed is officially against the CFPA.
Talk about facts be damned! (anyone here think there isn't a slight problem with protecting consumers on bogus financial products or generally?)
Simon Johnson has written a piece on why the CFPA is so important, Why Banks Should Support a Consumer Financial Protection Agency
is income disparity. It's also not healthy for democracy.
But as long as people are not class conscious then they can continue to get away with this.
I don't know where you are getting this, just to to Yahoo Finance, plug in almost any stock for the health sector and there is quite a different story.
This one yesterday, UnitedHealth profit doubles.
I ran an investment business for 20 years and was a State RIA for two years. Over the years I did a lot of research for clients that wanted safe investments, not growth stuff and would look at insurance companies.
You seem to think that health insurance has a big profit margin and historically that is not true.
I can tell you how to save a quick 2 or 4 percent off the top. Make the States stop their gross premium tax. A gross premium tax is on premiums collected, not after expenses.
Insurance agents (those people everyone loves to hate) make about 3% commission from Blue Shield / Cross. Commissions decline after first year. Private insurance companies could if they wanted, follow Medicare's model and have a skeleton fraud unit. Insurance companies are vigilant on fraud and it does cost (if I remember) maybe 5% to 8%. But it saves $millions maybe $billions.
.Experts say all of these services cost more today than they did 15 years ago, even accounting for inflation
Although spending has slowed, the problem is it has not slowed enough. The cost of providing health care to people with private insurance still grew twice as fast as the overall U.S. economy last year.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
Total operating revenues
3,573,589
Total operating expenses
3,500,675
Earnings before income taxes
70,668
Provision for income taxes
26,500
Net earnings
$
44,168
Here is the S&G expenses
Selling, general and administrative as a percentage of revenue
16.1%
The above is far from the 30% I always hear. That S&G costs are people, secretaries, the person working in the mail room and yes...that possibly/probable overly paid CEO. S&G costs don't mean that they are useless and don't offer value.
As I have said before, when Medicare starts paying a fraud unit, when Medicare starts including wages for the people over at CMS, I will start to listen. The admin cost the government gives for Medicare is skewed. Another example: Medicare uses a cost per claim analysis. Well the elderly normally have a higher claim than younger people. Private insurance normally has more young, healthy people, therefore the normal client has lower claim amounts. Using the Medicare method for determining administration of claims, even if the same amount of time is spent on the young low claim, Medicare would assign a higher administration ratio to the young, low claim amount. The Medicare math does not give a picture of the cost to adjudicate a claim per person and is what many call misapplication of statistics.
I damn well guarantee you that if Medicare uses the generally accepted administrative cost per person analysis, the low Medicare admin. cost we hear will be gone.
Maybe I go back to my days with hair to my waist (I'm a guy), falling back to my 1960's mistrust of government. But the more I look at their stats the more I find them misleading.
Hm? This got long, maybe it should have gone over to another place. I am always open to new information. So if someone has information that Medicare uses mathematics admin figures that are based on the claim per person.
Here are some arguments over the entire thing.
http://www.stat.columbia.edu/~cook/movabletype/archives/2009/07/does_med...
That is why the Obama Administration proposed the Fed as super cop. But the Administration is not giving up on the Fed Super-Cop idea [from the same article]:
Oh Larry, fighting for the financial oligarchy to the very end.
if you're saying you wrote a blog post elsewhere, just change the title, little of the first few sentences, etc. and cross post on EP, we have a lot of readers very involved in trade, manufacturing, so they love posts on China, if you're looking at those details, well cited research, they appreciate it.
Did you know China has engineers on their team of economic strategists?
Do you know the U.S. doesn't have an economic strategy team, based on the national interest?
(economic advisers are not long term strategic planning)
but that brings to light even more EP's mantra of when in doubt to use one's calculator....it's really only by focusing in on data, returning to facts, stats, data over and over can one get past the noise.
...today. It's a good move for China. Their portfolio is a little lopsided in USD ;-) Their moving quite firmly these days, getting themselves positioned, and I think their currency swap trade policy will be good for the stability of the global marketplace. Not only are they now GM's largest auto customer, but they're making some very farsighted moves in the energy and environment sectors:
The sun is probably setting on the US -- after all, we did contaminate the entire world market with our nasty paper and fake ratings. There's a price to pay for that. We aren't just going to get away with it. And our ugly little wars permanently damaged US good will years ago.
As for the petrodollar, does anyone still use dollars to buy oil? I heard the Saudis were no longer accepting dollars after the first of next year.
But it is way past time to truly be on the path of energy independence. Brazil is energy independent. It took Brazil several decades but they did from scratch with American automakers producing flex-fuel vehicles.
We have the advantage that much of the technology has already been developed to use alternative fuels. It is a matter of making the jump.
first, they said that the companies would be kept alive, but in the end it was forced through bankruptcy.
Look what else was on Calculated Risk today. Bernanke: CRE May Pose Risk.
Either of these alone is bad, but if a CIT bankruptcy accelerates the rate of CRE foreclosures, then it could put banks that are heavy in CRE at much greater risk.
I don't know if I was the first to put these two together (I highly doubt it), but it does seem that the issues I raised are coming to a head.
So do you suppose that if this all comes together the people that dismissed this as "conspiracy" will admit that they were wrong?
What you say is only applicable once that oil goes on the world market, or any monies put towards futures, etc.
When it is gobbled up wholesale, or moved as part of the oil/energy black market, the petrodollar rule does not apply.
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