United Health: Awaiting the Earnings Call for Clarity

United Health (UNH) is down, but has it been dragged down by WLP, HUM, & CVH specific problems - or industry and company related issues?

Let's look at their Medical Care (Loss) Ratio and Operating Margin respectively, for six quarters:

3Q 2006= .811 and 10.3%;

4Q 2006= .799 and 11.0%;

1Q 2007= .827 and 9.2%;

2Q 2007= .805 and 10.7%;

3Q 2007= .795 and 11.5%;

4Q 2007= .799 and 10.9%;

1Q 2008 before market opens April 22 - Tuesday.

I fail to detect an obvious trend or direction from these two important numbers. On 03/13/08 UNH delt concisely with the NY Attorney General charge against Ingenix. It is really a question of why out of health plan area doctors are over-charging for their services. UNH says it is "in the midst of on-going discussions with the Attorney General's office."

On 03/12/08 it stated: "The Company also noted that the net unrealized capital gain position in its investment portfolio has continued to strengthen in 2008." And, for 2007 plus the first two months of 2008 their commercial medical cost estimates "has performed consistent with the Company's expectations."

I suggest waiting for the 4/22 earnings call; unless you want to get in through options.

Disclosure: Author is long UNH

Comments

[Random Walk:]

Good luck! those are juicy margins relative to historical averages, right?

2008 Mar 20 02:10 PM

[Sympathetic:]

Unfortunate with industry, the conversation is always about money and bottom line. That is seemingly all the investors are concerned with (as is their nature). Because of this, insurers like UNH are losing their vision... of how to impact health care favorably by increasing better medical outcomes for their patients. You would think that this is what all health insurers and providers wanted to work toward, but I see both (yes, particularly medical professionals) trying to squeeze as much of the the almighty dollar out of every American it can. I think this will backfire as many of my ilk (political conservatives) start to see viability of a single payer system if costs/premiums continue to spiral out of control. If the focus doesn't make it back to the consumer from the investor, and if the industry can't co-opt the providers to keep costs reasonable, this industry as a private sector concern is doomed, doomed, doomed.

2008 Mar 21 01:58 PM

[chuckles:]

I'm not sure what the answer will be, but I can almost bet it won't be single payer system. American won't put up with a Canadian or British system. We are pampered here and they are sentenced to death and pain in a single payer system. When you may have a brain tumor and they tell you to get your MRI 4 months from now, you aren't alive in 4 months. Tort reform is the most imeadiate help, but after that it will be a matter of filtering out unneeded tests and such. Maybe price limits on certain items and procedures are due. My daughter just had a procedure and a bag of Saline was $500 and the needle insertion was $200. I would be arrested if I charged like that in any other industry, even car repair. All UNH does is make a deal with the payer and reciever and cash the difference. If they charged $50 for the saline and $25 to put it in, that would be a big advancement. How much do they get in Canada?

2008 Mar 23 03:12 AM

[NotVerySmart2:]

Lemme ask a silly question. If by chance we did convert to a more socialized (or single payer) approach (like Mr. Obama sez). Where would the US Goverment find immediate expertise in managing such needs? You think they would build thier own new offices and create a new "branch" an' all.... or would they deploy a modified version of our current Medicare system? Who handles Medicare stuff now?

But seriously folks..... Let's just hope UNH makes the numbers this month or there won't be any company for patients to be mad at. We investors are not very smart, but we know how to spell "SELL".

2008 Apr 01 12:02 AM

[InsuranceSm...:]

UHN was one of the most predictable short sell picks eventhough some Analyst were saying it was a long position, "heading towards $65 per share. Why? When UNH attempts to spin there (UNH) stealing and dishonesty from providers payments by alleging Providers are over-charging, you know they are dilusional and lost their mind. Unfortuantly, this is not what UHN started out as. They used to be one of the best insurance carriers.

It is questionable how long UNH can survive if they continue to knowlingly deceive and misrepresent facts to the Public, contracted and non-contracted providers , as well as their own insureds/subscribers whom are in come cases picked by there Empoyer's.

It should be no surprise that UNH is failing to hold onto its' commercial business, and their Medicare business is a sham where they skim off the already low medicare fee schedule from their contracted providers, while sticking it to our seniors with high hidden co-pays and getting the to sign on by telling them it's free.

Insurance is and has always been based on a belief that if something happens to you, you will be taken care of. UNH violates that trust relationship and deserves its' just demished presence or demise.

2008 Apr 02 09:52 PM