> Yes, UNH does better than the other managed care organizations because their healthcare business has higher margins than their insurance business. But it’s certainly not arbitrary, and it’s apparently not enough to make their shares worth buying.
> The silly claim is stating managed care organizations are booking outsize profits,
Is this claim in the room with us now?
My claim is that the pay-vider structure enables these businesses to produce way, way, way more money than their regulatory "profit cap" leads people to believe. They can remove what would be profit from their insurance arm (where profit is capped anyway, so it keeps them under the cap) and dump it into their healthcare arm (proven by above-market self-reimbursement rates) to fund network expansion, which then further strengthens the insurance arm's market position (alleviating their need to "compete against other insurers" [ lol ])
Your claim is actually concordant with mine, which is that this profit doesn't show up as margin and doesn't show up as excellent stock performance. Correct! That's what it means to hide profit in order to stay below profit cap!
Anyway it's clear that I'm talking to a "stocks guy" who lacks the curiosity to actually understand how a business works beyond the 10-K (where all this stuff is discussed, by the way, you can find it euphemistically referred to as "network optimization").
Like I said, you'd have to do some reading well beyond the 10-Ks and the price chart lmao.
>Your claim is actually concordant with mine, which is that this profit doesn't show up as margin and doesn't show up as excellent stock performance. Correct! That's what it means to hide profit in order to stay below profit cap!
This definition of “hide profit” seems to be no different than “invest in the business”.
> which then further strengthens the insurance arm's market position (alleviating their need to "compete against other insurers" [ lol ])
Why is this “lol”? It is true that vertical integration results in efficiencies, and that can lead to lower premiums (not that it will absent sufficient competition). Kaiser has been doing it to much acclaim for almost 100 years.
UNH outperformed the S&P by a huge margin up until their Medicare Advantage fraud case pummeled the stock price a few months ago. https://www.alphaspread.com/comparison/nyse/unh/vs/indx/gspc
> The silly claim is stating managed care organizations are booking outsize profits,
Is this claim in the room with us now?
My claim is that the pay-vider structure enables these businesses to produce way, way, way more money than their regulatory "profit cap" leads people to believe. They can remove what would be profit from their insurance arm (where profit is capped anyway, so it keeps them under the cap) and dump it into their healthcare arm (proven by above-market self-reimbursement rates) to fund network expansion, which then further strengthens the insurance arm's market position (alleviating their need to "compete against other insurers" [ lol ])
Your claim is actually concordant with mine, which is that this profit doesn't show up as margin and doesn't show up as excellent stock performance. Correct! That's what it means to hide profit in order to stay below profit cap!
Anyway it's clear that I'm talking to a "stocks guy" who lacks the curiosity to actually understand how a business works beyond the 10-K (where all this stuff is discussed, by the way, you can find it euphemistically referred to as "network optimization").
Like I said, you'd have to do some reading well beyond the 10-Ks and the price chart lmao.