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All News Analyses by this Author
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
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HMO shares rise after Obama health reform speech
September 10, 2009
HMO Shares Rise - Threat or Opportunity | www.reuters.com
New pushes into the individual market by Aetna and Cigna, along with United, Humana, Blue Cross, etc prove real opportunity to capture 45,000,000 - 85,000,000 uninsured lives. The big unknown is how Not For Profit enterprise will access capital for Surplus reserves less expensively than Federal plans. For any commercial carrier to compete in a sustainable way will require equal access to capital or the state will win everytime. -
June 25, 2009
We don't win in State Farm vs. Charlie Crist | www.orlandosentinel.com
State Farm is renewing most windstorm risk west of US1 in Miami State Farm is renewing "all other perils" and dumping Wind east of US1. State Farm has many loyal but frightened (20-40 year old) agency owners whose existence is threatened if State Farm abandons Homeowners, so it is unlikely. Gov. Christ is setting Citizens (JUA) wind storm rates politically and not financially. Washington already turned down Gov. Christ to bail out JUA if we get a disaster. According to National Underwriter, Citizens sells $3 Billion in premium and has $29 billion in liabilities. -
June 25, 2009
We don't win in State Farm vs. Charlie Crist | www.orlandosentinel.com
State Farm is renewing most windstorm risk west of US1 in Miami State Farm is renewing "all other perils" and dumping Wind east of US1. State Farm has many loyal but frightened (20-40 year old) agency owners whose existence is threatened if State Farm abandons Homeowners, so it is unlikely. Gov. Christ is setting Citizens (JUA) wind storm rates politically and not financially. Washington already turned down Gov. Christ to bail out JUA if we get a disaster. According to National Underwriter, Citizens sells $3 Billion in premium and has $29 billion in liabilities. -
June 4, 2009
How Bad Will it Get (for Aetna, Amerigroup, Coventry, Health Net, Health Spring, Humana, Kaiser, United and Wellpoint) | www.nxtbook.com
The perfect storm for reform is intensifying. We have been here before, but multiple factors will likely force real reforms that will challenge managed care corporate profits and even survival. The PE 2008 ratios are out and the rate of decline is more concerning than falling numbers for Aetna, Amerigroup, Coventry, Health Net, Health Spring, Humana, Kaiser, United and Wellpoint. This “perfect storm” of federal debt, unemployment, record setting growth in Medicare eligibility, falling enrollments, adverse legal decisions like Ingenix, dramatically declining managed care company PE ratios, premium increases 500%+ CPI, and bipartisan political support poses real change to the status quo. The hidden tornado of concern lay in the acceleration of negative change. -
Will Feds Destroy Commercial Insurance?
May 21, 2009
Health Plans Would Add to Controls on Insurers | www.nytimes.com
The feds are no stranger to healthcare reform. It failed under Kennedy, Nixon, and Clinton. Common sense tells us that 20% (2009) indivudual, small group AND (10%-20%) large group premium increases, and cost-shift to commercial carriers is unsustainable. Looking at federal reform now is a shot in the dark to what finally gets approved in the DC sausage maker. One thing is dangerously certain. If the healthiest commercial lives get to switch to a better rate or federal plan, it will leave the sickest people with each employer, and massively drive up experience rated premium in 1-3 years. If the the opposite happens where only the sickest people are purged from the employer plan, then the federal program will require massive new tax subsodie. There is no free lunch. -
May 11, 2009
Allianz operating profits fall 41% | www.ft.com
Alliance had a giant drop in earnings. -
Missing Earnings in Turbulent Times Hospital and Medical Insurers
July 3, 2008
AMA meeting: Delegates decry CMS no-pay list as unrealistic and call for revision | www.ama-assn.org
CMS (and several large insurers) refusing to pay for "Never Events" will further challenge cash strapped hospitals, and poses increased pressure to increase prices as hospitals attempt to cost-shift to the commercial carriers. Not paying for alleged hospital mistakes will garner stronger administrative action against staff and doctors who get more adverse high cost patients. The world of doctors will get more autocratic. Hospitals cannot change Medicare and Medicaid fee schedules, but they can and do change commercial fee schedules. Insurers need to stay on top of unexpected cost increases predicated upon unexpected and desperate hospital trying to keep the status quo on the backs of the commercially insured members. Staying tuned to what the government subsidizes is the name of the game for successful insurers and providers of care. -
May 8, 2008
Physician report card validity | physiciansnews.com
Ranking doctors and hospitals will certainly move the most profitable patients able to afford commercial health insurance AND travel. Medical Providers who help set their (local) standards to affect real outcomes reporting regular consumers can understand will increase their market share. Those who don't get involved will get what is left - the uninsured and perhaps lower paying federal or state insured groups. The future for hospitals and some physician specialities will be most turbulent. -
Losses Loom in Pensulvania if Poltics Guides Health Insurance Absent
April 9, 2008
House OKs Limits on Health Insurance | www.post-gazette.com
Pennsylvania is a bell weather for hospital reporting in the US. The "hospital costing containment council" (I forget the name) is famous for highlighting percentage of patients acquiring hospital infections after arrival. Accountability for these very high costs lay with people managing hospitals and doctors supervising care of ancillary medical personnel, not insurance companies. Arbitrarily assigning 15% of all premium to create plan, sell plans, pay premium tax on plans, administer claims, reinsure plans, contract with providers, do customer service, and assume first dollar risk is ill advised and threatens the both profits and commercial availability of medical insurance in PA. -
Organized Hopitals and Physicians Win More Medicare & Medicaid Contracts
April 1, 2008
Health insurers take a dive on WellPoint's warning | www.marketwatch.com
Regrettably, many physicians feel that dealing with dollars is less then fulfilling, especially in light of off-loading potential costs of defensive medicine. The very turbulent times ahead will give employed groups of physicians a strategic advantage over individually fragmented doctors attempting to win managed care contracts. Certainly, CMS will look to contract blocks of medicare (and medicaid) live with better organized hospital and physician entities capable of making a group decision to accept or reject a contract. The game remains about lowering fixed costs. The industrialization of medicine is here to stay.Paradoxically, it remains their best chance at maintaining professional and financial autonomy. The capitated contract is tried and true, and does keep healthcare inflation down better then anything else we have tried over the last 20 years. -
Major Insurers Cant Keep Raising Prices with Employers Baulking
March 25, 2008
Health insurers take a dive on WellPoint's warning | www.marketwatch.com
Ongoing healthcare inflation at 200-400%/yr of CPI has surpassed the point where employers can easily compete with international products and services. We are already seeing growth in Scheduled Medical Benefits, which are a poor substitute - but do substitute for traditional major medical insurance where employers want to offer a gift of insurance. Providers are actively suing insurers for their billed charges, and insurers are actively moving to the Medicare fees schedule to lower their costs - some successfully and others not. The Medicare Advantage (PPO, HOM, POS and PFFT) plans with and without Part D pharmacy have many carriers attempting to develop new markets. The 10-15% fall in the stack market will cause increased pricing of insurance because of poor insurance company investment returns. The biggest wild card is forecasting what commercial class of insureds our government will subsidize in the new Presidency. -
March 7, 2008
MMC Sees 4Q Net Income Drop 62% | www.propertyandcasualtyinsurancenews.com
The reason Marsh is struggling is because of poor leadership ending up with $850,000,000+ in fines from NY, IL and CT for bid rigging and prohibited contingency fees. Future profitability & growth for these brokerages is anything but certain and likely to grow very slowly because they are no longer able to take undisclosed profit sharing - ie. contingency fees that used to comprise significant profits. Therefore smaller brokerage houses that niche the very profitable Property and Casualty commercial lines will win more quotes against them now that commission means total commission and not partial commission disclosed to the customer. -
Rewarding Doctors Good Medicine to Beat Earning Forcasts
March 4, 2008
Managed-care company sees benefits of pay-for-performance | www.tennessean.com
The plans that figure out how to get doctors to self manage best of breed chronic care will certainly spend less money treating their insured lives. For example, preventing a colon cancer, cervical cancer, heart bypass, transplants, premature infant, stroke or MI saves big bucks. It saves lives and is a better way to practice medicine. The key is getting doctors to assume both financial and medical management of the patient by enforcing agreed upon standards of care. The goal is better outcomes in terms of patient satisfaction and lower cost. General Motors spent $3 billion in 2004 into its retirement health trust fund or three times earnings. They buy insurance for 450,000 workers. Clearly, this is not sustainable and employers and government are acting to stop the bleeding. -
CMS Leaves American Healthways & Rocks Disease Management
February 5, 2008
Medicare Proghram End Hurts Healthways | www.forbes.com
The apparent abandonment of American Healthways DM by CMS is a big deal. DM is one of the very few promising techniques available to curve costs, and yes, even improve wellness by preventing onset of disease attack. The premise of limiting "admissions" is what population based management began on. It has blossomed into real real prevention. Quantifying the admissions that did not happen is "subjective-soup". Inherently, the management of senior diabetes to prevent coma, renal failure,stroke and MI saves big bucks. Inherently, managing child asthma, prenatal, neonatal, bariatrics medicine, hypertension are very good ideas. Prepaid population based medicine v. competing fee for service medicine at least has something to incent (pay) doctors to manage health and not just provide procedures AFTER disease onset. We tried to get AH to buy reinsurance for their "fees at risk" program several times without success. For their sake, we hope they bought it from someone. -
Beauty like Quality in the Eye of the (Patient) Beholder
January 22, 2008
WellPoint patients to review doctors online | www.healthcarefinancenews.com
Somebody really smart once said, "Sleep, riches and health to be truly enjoyed must be interrupted." However flawed P4P, EBM, TQM, critical pathways, centers of excellence, and outcomes measurement are, they at least attempt to define QUALITY. The argument rages and usually ignores the most obvious critic - the patient. We discussed this at length 20 years ago, and the best definition of quality was defined by whether the patient was returned to their state of health prior to onset of health attack. If the patient was surveyed about quality after being returned to their previous state of health then quality = good. If the patient was not returned to their previous state of health = quality bad - however egregious to the inspired or offending physician using the latest and greatest technology. Weighting patient sentiment is essential to accurately evaluating outcomes. The rub is it requires treating the whole patient and not just delving a procedure. -
Individual Market is Sexy But Wears Glasses
January 14, 2008
The New Insurance Frontier | www.healthleadersmedia.com
MiniMed aka Limited Medical aka Scheduled Medical Benefits are not new. They derive from the disease specific plans of old. The article suggests that the uninsured have been ignored which is incorrect. Many major players have rushed this market niche to find out the premiums are low and the turn over is high - making the marketing costs a poor value and an expensive mistake in money, and especially fragmented focus. However, there are some winning plans that appeal to both the 47,000,000 uninsured (some estimate at over 80,000,000), AND to insured people with high deductible health plans aka CDHP's, HSA & HDHP's. The well-heeled individual market is a wholly different game, and is aggressively being sought by most carriers looking to underwrite Major Medical risk. But that is Major Medical expensive insurance and not Scheduled Medical Benefit plans. The most likely governmental action is to subsodize this niche, so getting in front of the ball presents opportunity. -
Wombs for Rent - Organs for Buyers.
January 4, 2008
Outsourced Wombs | warner.blogs.nytimes.com
Wombs for rent and organs for purchase is not new news, but it certainly is a growing business. Aside from the obvious effect on a reinsurer profits for allowing very expensive transplanted vessels to be eligible for reimbursement, there is the larger issue of if it is right to allow. Barren couples clamoring for a blessing of offspring would certainly argue their right as would dying people. The harvesters of organs and surrogate woman would argue for their right to meet market demand. Advocates for the unrepresented poor see need for rules to protect those unable to protect themselves from unethical treatment of for-profit enterprize. -
World Health insurance at 30,000 feet is quite different from emerging market eutrepeneuring
January 4, 2008
To your health: diagnosing the state of healthcare and the global private medical insurance industry | www.swissre.com
The authors comments are accurate for a multibillion dollar multinational reinsurer looking down from 30,000 feet. The US spends about $1.6 of the estimated $5 billion. Identifying emerging trends in foreign lands will take a wary eye. It is highly unlikely that the type of risk giant reinsurers are interested in taking - ie catastrophic risk excess of $50,000 US, and in blocks excess of several million of premium is very different from products that are very affordable and do not offer access to things like cardiology, cancer, and services requiring intensive care nursing. American Re now called Munich Re, AIG, ING, Lloyds and Swiss are established reinsurers of medical risk among others. -
Practice valuations going at a premium and buyers abound
November 26, 2007
Guaranty Insurance Services Announces Acquisition | www.insurancenewsnet.com
Good article, and method. Growing an agency is quite challenging today. Its always a good idea to tie the buying price to longevity of the book and create an incentive to keep current clients renewing during the transition. The smaller agencies may actually have a better chance today than last year to win new business away from the larger brokerage houses because the larger houses are now prohibited from accepting undisclosed contingency fees that were (and in some cases cases still are) hidden from the client. Additional concerns about what the federal government will do with health insurance creates deeper issues about if the health insurance business has future legs to stand on. That said, many agency brokers are looking hard to find $1M-$5M books to buy, but the buying prices are all over the board, and the market is strong for buying them. -
Entitlement v. Commercial Insurance: Place Your Bet.
November 19, 2007
Should Doctors Own Hospitals? | www.businessweek.com
Many risk assuming entities are available to doctors and hospitals courageous enough to believe they have the talent to manage their local healthcare market. Some 10-12 years ago we saw the market go nuts for Physician Practice Medical Groups (PPMGs), Group Practices without walls (GPWW’s), Independent Practice Associations (IPA), Physician Practice Organizations (PHO), Provider Sponsored “Medicare” Plans (PSO’s) under Medicare Part C, and leaving the best for last – Provider Sponsored Health Plan joint ventures between physicians and hospitals aka Private Label plans. Columbia/HCA raised 5 billion in 2 years and started applying competition to many hospitals used to not worrying about competition. The market knew that the most efficient model has physicians actively directing care and being financially rewarded or penalized accordingly.
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