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23 марта, 01:14

4 Reasons Why UnitedHealth (UNH) Stock Looks Attractive Now

UnitedHealth Group Inc. (UNH) remains the leader in the health insurance industry by virtue of its vast scale and tremendously diversified operations.

23 марта, 01:11

Molina Hit by Public Exchanges, Failed Aetna-Humana Merger

Molina Healthcare Inc. (MOH) continues to suffer from ongoing issues related to the Affordable Care Act's insurance Marketplace.

22 марта, 00:15

Insurance Executive Blasts GOP Health Care Proposal: 'This Bill Is Terrible'

function onPlayerReadyVidible(e){'undefined'!=typeof HPTrack&&HPTrack.Vid.Vidible_track(e)}!function(e,i){if(e.vdb_Player){if('object'==typeof commercial_video){var a='',o='m.fwsitesection='+commercial_video.site_and_category;if(a+=o,commercial_video['package']){var c='&m.fwkeyvalues=sponsorship%3D'+commercial_video['package'];a+=c}e.setAttribute('vdb_params',a)}i(e.vdb_Player)}else{var t=arguments.callee;setTimeout(function(){t(e,i)},0)}}(document.getElementById('vidible_1'),onPlayerReadyVidible); Most insurance industry executives have been circumspect about the repeal of the Affordable Care Act and its proposed replacement, the American Health Care Act. Mario Molina is an exception. “I think this bill is terrible,” Molina, the CEO of Molina Healthcare, told The Huffington Post in a lengthy interview Friday. The company covers more than 4 million people scattered across 13 states ― including California, where it’s headquartered, as well as Florida, Michigan, New York and Texas. That makes it the 10th-largest health insurance company in the U.S., according to a 2015 government survey. Molina’s main argument against the bill is the same one critics have been making for months ― that the measure would expose millions of lower-income Americans to crippling medical bills, by taking away their Medicaid coverage or the federal tax credits that make it possible for them to buy private insurance. These warnings are consistent with the findings of multiple independent analysts, including the Congressional Budget Office, which last week predicted that the Republican proposal would drive up the number of uninsured Americans by 14 million within a year and 24 million within a decade. Among those taking the hardest hits, the CBO said, would be poor Americans who now rely on Medicaid and older consumers whose premiums would skyrocket because the bill would allow insurers to charge them much more than they can today. Even those who held onto coverage could expect that it would be less generous than it is today, the CBO noted, as the combination of looser regulations and redirected financial assistance shifted the market toward policies with higher out-of-pocket expenses.  You can’t say this is not my problem. ... This is your problem. You just don’t know it yet. Mario Molina, CEO of Molina Healthcare Molina, a physician, has an up-close perspective on what this would mean, making his commentary more valuable, less reliable or both ― depending on your perspective.   Molina’s father, also a physician, established the company in 1980 to serve low-income people in Southern California. And it has never strayed far from its roots. Its business consists mostly of insuring people on Medicaid (states contract with Molina to provide coverage) or selling plans to people who buy on the Obamacare exchanges and, because of their low incomes, qualify for extensive subsidies. The Republican bill would likely deal a significant blow to Molina Healthcare’s revenue and the skeptical take on its CEO’s perspective is that he’s simply trying to protect his company’s bottom line. But precisely because Molina Healthcare has a long history of working with lower-income consumers, it may understand the Obamacare private insurance markets better than many of the larger, nationwide carriers that make headlines in the national media. Molina is accustomed to managing care aggressively, by nudging newly insured patients into the primary care system quickly ― something of particular importance when it comes to insuring people who have gone months or years without coverage, and without ongoing care for chronic conditions. Molina also has a history of tough negotiation with doctors and hospitals, and limiting networks to only those who will agree to lower reimbursement ― thereby allowing the company to keep premiums low. As a general rule, the big companies with the names that everybody recognizes focus on other lines of insurance, such as administering employer plans or offering private Medicare Advantage plans, in which the market dynamics are very different. The people who buy those plans care a lot more about having big networks and aren’t as sensitive on prices. Those companies have tended to struggle more trying to sell individual coverage ― in particular, they have struggled to attract enough young and healthy people, whose premiums insurers require to offset the cost of paying bills for people with serious medical problems. Critics of the law say the skewed risk pool represents a structural problem with the law, because the coverage insurers are selling just isn’t very attractive to consumers unless it comes with huge subsidies that discount it deeply for the near-poor. This year the CEO of one of those big national companies, Aetna’s Mark Bertolini, declared that the program was actually in a “death spiral” ― the line that President Donald Trump, House Speaker Paul Ryan (R-Wis.) and other GOP leaders have cited over and over again as a rationale for repealing the law as quickly as possible. But analysts at the CBO and the Brookings Institution, among others, have disputed that verdict, arguing that insurers simply under-priced premiums for the first two years and are finally catching up. And just like Molina Healthcare has its own self-interest, Aetna does too. Specifically, it has been fighting to win federal approval for a controversial merger with Humana. Documents that surfaced in recent litigation over that merger led a federal judge to conclude the company has been trying to “leverage its participation in the exchanges for favorable treatment” from federal regulators. Aetna has denied this. Molina is not convinced. “There’s a lot of politics going on between Aetna and the administration, so you have to take that with a grain of salt,” Molina said. As for the state of the Affordable Care Act overall, Molina acknowledges some problems with the private insurance markets. But he thinks they are largely isolated to states such as Arizona and Tennessee ― and amenable to minor fixes rather than an overhaul. “You can think of it almost like a patchwork quilt,” Molina said, noting that states like California and Michigan have stable marketplaces. “In some states it’s working well and in other states it’s not.” Molina Healthcare itself posted a small loss in the last quarter of 2016, after posting small profits during the law’s first two years. But the CEO said that was only because it was required to pay into a “risk adjustment” scheme, designed to protect insurers from losses, under a flawed formula. The company had been complaining about this for years and the regulation has since been fixed, Molina said. “We added about half a million members this year,” Molina said. “Some plans grew a lot, and some plans probably got smaller, and they probably got smaller deliberately because they raised their premiums intentionally. So I don’t think it’s imploding right now.” Molina was careful to say that the current political environment has introduced a new element of uncertainty ― in part because, quite apart from the question of repeal, there’s the question of whether the federal government will continue to pay for special subsidies that low-income consumers get to defray out-of-pocket costs. Those subsidies are in limbo, thanks to a court ruling last year, and neither the administration nor Congress have indicated clearly whether they will act to make sure the money continues to flow. The lack of clarity, Molina said, means that even his company, which has been among the Affordable Care Act’s most enthusiastic proponents, is not sure what it will do in 2018 ― or beyond. Molina warned that if the GOP bill or something like it passes, and many millions of Americans end up losing coverage, the effects will eventually spread. He said the loss of payments would eventually hit the hospital sector, forcing closures particularly in rural areas, while eroding the quality of coverage available to everybody. “You can’t say this is not my problem ― I have insurance, this is not my problem,” Molina said. “This is your problem. You just don’t know it yet.” -- This feed and its contents are the property of The Huffington Post, and use is subject to our terms. It may be used for personal consumption, but may not be distributed on a website.

21 марта, 17:48

Humana Poised to Grow on Government Business, Strong Capital

Humana, Inc. (HUM) stock has long been an investor favorite owing to its strong fundamentals.

21 марта, 16:35

Should Value Investors Consider Aetna (AET) Stock?

Is Aetna a great pick from the value investor's perspective right now? Read on to know more.

15 марта, 20:25

The GOP’s Wellness Bill Would Give Employers Too Much Power

Last week the House Committee on Education and Workforce of the U.S. House of Representatives approved a bill that would expand the reach of wellness programs to include genetic screening of employees and their dependents and increase the financial penalties for those who choose not to participate. It would also resolve current conflicts between various laws such as the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA). It is not clear that employers would want to utilize the greater leverage over employees that the bill would offer. But it raises many concerns that employers should consider. The bill, the Preserving Workplace Wellness Programs Act (H.R. 1313), was introduced by Representative Virginia Foxx, the North Carolina Republican who chairs the House Committee on Education and the Workforce. Having passed the GOP-d0minated committee by a 22-17 party-line vote, the bill now goes to the House Committee on Ways and Means. The Senate’s Committee on Health, Education, Labor, and Pensions should soon consider similar legislation. It will probably be folded into a comprehensive bill for repealing and replacing the Affordable Care Act (ACA) before it reaches the floor. In such a comprehensive bill, this provision is not likely to spur much debate, so understanding it now is important. The key provisions of the bill are as follows: Employers would be allowed to run genetic tests on their employees and their families as part of participatory wellness programs and to fine those who refuse to participate. Employers currently are not allowed to genetically screen spouses and children as part of wellness programs. (This can be done “voluntarily,” as Aetna does, but there is some confusion about what that means.) Self-insured employers (those who establish their own funds to cover the medical expenses of employees and their families and only use insurance carriers for administration and, if they have stop-gap insurance, to cover expenses if their fund runs out) still would not see individual results, due to the Health Insurance Portability and Accountability Act (HIPAA). However, independent wellness vendors are not regulated by HIPAA. Therefore, they could share this individual genetic testing information with employers. Either way, employers will know who did not agree to the testing and would be allowed to fine noncompliant employees, up to 30% for nonsmokers and 50% for smokers, but now those percentages could be multiplied by the cost of the full family policy, rather than the individual employee’s. For example, if an employee costs $5,000 to insure and a family costs $10,000, the 30% cap on penalties increases from $1,500 to $3,000. ADA and GINA, which prohibit use of genetic and family history information for hiring, firing, or underwriting insurance coverage, would no longer apply to wellness programs. Consequently, genetic and family history information could be used in assessing employee risk of future disease for purposes of a wellness program. Insurance carriers and employers will be able to use aggregated data to prioritize wellness initiatives and predict health insurance costs. This should allow more-accurate cost predictions. For example, a self-insured company that learns its employees have certain genetic characteristics might want to become fully insured or vice versa. The current combination of a fast-moving news cycle, often dominated by discussion of an ACA replacement, and the speed with which the bill could become law means employers have many unanswered questions, including the ones that follow. Does this mean we are mandated to offer genetic testing as a covered benefit? No. Genetic testing as a covered benefit is not the subject of the bill. Coverage is not affected. The genetic testing in question would be financed as an administrative cost, rather than as a regular medical claim, and would be for the benefit of the employer, not to inform the confidential doctor-patient relationship. Does this mean GINA no longer applies in the workplace? No. Employers still may not discriminate on the basis of genetic information in hiring or insurance underwriting, meaning you can’t charge someone more because they have a certain genetic predisposition. This law applies only to testing in the context of wellness programs. Even then, it applies only to participation in the testing rather than the outcome of the test (see the next question). Does this affect outcomes-based wellness programs, participatory wellness programs, or both? Outcomes-based programs, known formally as health-contingent wellness programs, attach financial rewards to the achievement of certain goals, such as weight loss, reduced cholesterol, or number of steps walked. Participatory programs do not require a specific outcome, just participation. So an outcomes-based program could require weight loss, while a participatory program could require only participation in a weight-loss program. This bill would affect only participatory programs, which still constitute the large majority of programs. What is the cost of genetic screening to the employer? One of the few vendors providing the service, Newtopia, recently quoted $500 per employee. This figure is likely to decline as genetic testing technology improves and more vendors get into the market. What type of genetic tests are involved? Testing for predispositions for obesity, diabetes, heart disease, and some kinds of cancer are contemplated. Would employees and spouses see their genetic test results? That is not required. For example, finding out one has a gene for obesity might make one less likely to try to lose weight. In such a scenario, sharing the results with employees could confuse them, since so little is known about the link between genetics and weight. But it is certainly plausible that employees will want to see their results. As a practical matter, it is unlikely that an employer would not authorize the testing company to share the results with employees. Newtopia does share the results with employees in the hope that if they learn they have certain genes, they will change their behaviors. What is the purpose of the legislation? The narrow purpose is to end the conflict between ADA, GINA, and ACA, in favor of the employer. The broader purpose is, as stated in the bill’s preamble, to give employers more discretion in how they administer wellness programs and, in the case of extending the penalty provision to dependents, more leverage over employees. There are health and savings arguments. Some people believe that genetic testing provides a more accurate picture of employee risk than current biometric screens. If employers can manage employee risk, the conventional wisdom goes, they can save money. For instance, the commercially insured population suffered 158,895 heart attacks and had 126,710 diabetes-specific admissions in 2014,  the last year for which statistics are available. Roughly 55% of the country (about 175 million people) were privately insured, yielding a total event rate of 1.6 per 1,000. The Health Enhancement Research Organization pegs the cost of these events at $22,500. Hence a typical employer’s health spending includes $36 per employee per year (PEPY) for heart attacks and diabetes events that might be predicted through genetic screening. (More-complicated diabetes events would take place in employees who were already diagnosed, and hence would not need to be genetically screened.) The chair of the Health Project, an industry-financed group that evaluates wellness programs and annually bestows the C. Everett Koop award on the year’s best, is Ron Goetzel of IBM Watson Health and the Johns Hopkins Bloomberg School of Public Health.  He says that current programs reduce risk by up to 2% in two to three years. Assuming he is correct, heart attack and diabetes event costs might fall by a similar percentage, saving employers $0.72 PEPY in a traditional wellness program. If genetic testing were effective enough to double that risk decline, employers could save $1.44 in two to three years. Is there any evidence that genetic testing is effective in doubling the effectiveness of wellness programs (i.e., in improving health or reducing costs)? There is ample evidence of ineffectiveness. An Aetna study showed no meaningful change in risk factors after one year between at-risk groups that were or were not offered genetic testing, using the standard randomized control trial. Experts in the field have not endorsed the notion that genetic testing for chronic disease predisposition is effective, though that could change as the technology improves. There is also some unreliability in test results. Interpretations varied 22% of the time, according to a study reported in Genetics in Medicine. Why would an employer want to spend $500 now to save $1.44 later, especially given the lack of evidence that these programs are effective? They may not, but notwithstanding the actual economics above, employers tend to focus cost management efforts on diabetes and heart disease, due to a misperception that a very large percentage of employer health expense is consumed by these two wellness-related hospitalization events, which are theoretically avoidable. Government data indicates instead that the typical employer spends much more hospital money on birth events and musculoskeletal events than on diabetes or heart attacks, which are far down the list. (After retirement, though, the cost of both skyrockets.) This spending pattern provides support for a viewpoint that the way to save money through genetic testing is by relying on employees who resent the testing’s intrusiveness to refuse to comply. One vendor advertised noncompliance as a source of savings even without genetic testing. Here’s how that would work. In some instances, such as this 2013 Penn State case, where employees protested against a wellness program that included an opt-out financial penalty, a simple fine is all that’s involved. In the Penn State case, the employee’s annual deductible stayed the same, but employees who refused to comply were fined $1,200 over the course of the year. Suppose a similar fine were in existence now. It is likely that many employees would not submit to genetic testing. For each who refused, the employer would save $1,200, while paying $500 for each who complied. It would be more common for employers to switch to offering a high-deductible plan that increases the annual deductible by, say, $1,000, but prevent it from looking like a pay cut by offering employees the chance to earn the $1,000 back by participating in the wellness program. On paper, that is an “incentive.” If an employee were to forgo genetic testing, they would not collect the incentive but would still have the higher deductible. To put this in perspective, the average fine/incentive in 2015 was $693. Typically, larger employers made employees put larger amounts at risk. Would employees be likely to oppose this? Based on the “fierce opposition” of consumer, health, and privacy advocacy groups, as reported by the New York Times, it is fair to say that employee reaction would be very negative, though it may be hard to distinguish their sentiments on wellness programs in general from their particular feelings about genetic testing. A quick perusal of the comments on the STAT article on the bill (one of the first to report on the measure) or on other news outlets gives you a sense of those feelings. Given the cost, lack of effectiveness, and likely employee reaction, why would an employer want to do this? In my opinion, they wouldn’t.

10 марта, 00:42

4 Big Winners of Trump's Healthcare Plan

The new healthcare legislation has its own sets of winners and losers.

08 марта, 18:49

Health Insurers Hit 52-Week Highs: What's Behind the Rise?

The rally in the stock is believed to be have occurred from the repeal and replace plan unveiled by the Trump administration.

Выбор редакции
08 марта, 18:21

This Is What Good Conservative Health Care Reform Looks Like

WASHINGTON—At a press conference with Republican leaders today, House Speaker Paul Ryan (R-WI) outlined how the American Health Care Act keeps our promise to repeal and replace Obamacare. Key Quote: “It repeals Obamacare’s taxes, it repeals Obamacare’s spending, it repeals Obamacare’s mandates. It creates a vibrant market where insurance companies compete for your business. Where you have lower costs, more choices, and greater control over your health care. And it returns power—this is most important—this returns power from Washington back to doctors and patients, back to states. This is what good, conservative health care reform looks like. It is bold and it is long overdue. And it is us fulfilling our promises.” Opening Statement: “This is a good day. The American people—the people we serve—they need relief from Obamacare now more than ever. You know why? Because this law is rapidly collapsing. Let’s not forget that. “Premiums went up double digits this year in 31 states. Insurers are telling us it will be even worse next year if we stay on this path. Choices have dwindled to the point that one out of every three counties in America is left with just one insurer to choose from. The CEO of Aetna has stated that the law is in a ‘death spiral.’ So we know—without a shred of doubt—that this law is collapsing. “That means this is the choice we face: Are we going to stay with Obamacare and ride out the status quo? Are we going to just let this law collapse and whatever happens, happens? Or are we going to do what we said we would do? “Are we going to repeal and replace Obamacare with something better? This is the covenant that we made with the American people when we ran on a repeal and replace plan in 2016. “This is what our bill does. Go online and read it for yourself. Go to readthebill.gop. It repeals Obamacare’s taxes, it repeals Obamacare’s spending, it repeals Obamacare’s mandates. It creates a vibrant market where insurance companies compete for your business. Where you have lower costs, more choices, and greater control over your health care. And it returns power—this is most important—this returns power from Washington back to doctors and patients, back to states. “This is what good, conservative health care reform looks like. It is bold and it is long overdue. And it is us fulfilling our promises. So I encourage everyone to go online and read our bill at readthebill.gop.”

08 марта, 01:51

The GOP’s Plan Is Basically a $600 Billion Tax Cut for Rich Americans

The bill wipes away Obamacare’s taxes, which fell most heavily on those earning $250,000 and up.

08 марта, 01:50

Will Health Insurers Win Under Obamacare Replacement Plan?

While retaining the pre-existing conditions clause might hinder health insurers' business, their ability to charge a penalty on those who fail to maintain coverage is being seen as a positive.

07 марта, 21:01

Trump Promises Interstate Coverage Sales, Will It Help Insurance Stocks?

Just a day after Republicans unveiled their highly-anticipated plan to repeal and replace Obamacare, President Donald Trump has taken to Twitter to promise that one key provision--eliminating state lines for insurance sales--will come at a later phase in the healthcare rollout.

05 марта, 15:17

Tennessee becomes Exhibit A in GOP's Obamacare repeal push

But even in a deep red state, there's mounting resistance to repealing the law.

02 марта, 17:20

Teladoc (TDOC) Q4 Loss Lower Than Expected, Guides for '17

Teladoc Inc.'s (TDOC) fourth-quarter operating loss of 31 cents per share came in narrower than the Zacks Consensus Estimate of a loss of 35 cents per share.

28 февраля, 17:30

The Zacks Analyst Blog Highlights: BioTelemetry, WellCare Health Plans, Joint, HCA Holdings and Chemed

The Zacks Analyst Blog Highlights: BioTelemetry, WellCare Health Plans, Joint, HCA Holdings and Chemed

28 февраля, 17:23

Select Medical (SEM) Q4 Earnings Miss, Keeps 2017 Guidance

Select Medical Holdings Corp. (SEM) reported fourth-quarter 2016 earnings of 12 cents per share, which missed the Zacks Consensus Estimate by a couple of cents.

28 февраля, 16:39

Tenet Healthcare (THC) Q4 Earnings & Revenues Miss Estimates

Tenet Healthcare Corp. (THC) reported fourth-quarter 2016 operating earnings of 6 cents per share that missed the Zacks Consensus Estimate of 20 cents by 70%.

28 февраля, 01:07

5 Stocks to Buy for the Post-Obamacare Era

Insurers, hospitals and healthcare service providers with strong fundamentals would make welcome additions to your portfolio.

27 февраля, 20:20

Remarks by President Trump in Listening Session with Health Insurance Company CEOs

Roosevelt Room 11:03 A.M. EST THE PRESIDENT:  You are the big ones.  You are the biggest of the big, right?  (Laughter.)  That’s very impressive.  Thank you for being here.  We just had a great meeting with the governors on the horrible effects that Obamacare is having.  We’re going to change it and straighten it out, and make -- we have a plan that’s going to be, I think, fantastic.  It will be released fairly soon.  We’ll be talking about it tomorrow night during the speech.  But I think it’s going to be something special, and we’ll talk it about right here.  I think we’ll get you on, and I think you’re going to like what you hear. Again, thank you for being here.  I want to thank also Secretary Tom Price who’s with us, and who’s doing a phenomenal job on a very complex subject, the subject of healthcare.  He’s an advocate for the patients.  Tom is all about the patients.  That’s what he wants.  He wants to have a great healthcare system. Obamacare has been a disaster, and it’s only getting worse.  Last year alone, Obamacare premiums increased by double digits.  Since it has gone into effect, premiums are up by almost 100 percent in many areas.  And I think that this year it’s going to be really the year that I’ve always predicted -- ’17 is going to be a catastrophic year for Obamacare, for payments.  And you just take a look at what’s happening in various states like Arizona -- I believe it was up 116 percent; it’s going to be worse this year. Obamacare forced providers to limit the plan options they offered to patients and caused them to drive prices way up.  Now, a third of United States counties are down to one insurer, and the insurers are fleeing.  You people know that better than anybody. Since Obamacare went into effect, nearly half of the insurers are stopped and have stopped from participating in the Obamacare exchanges.  It has gotten so bad that nearly 20 million Americans have chosen to pay the penalty, or received an exemption rather than buy insurance.  That’s something that nobody has ever heard of or thought could happen, and they’re actually doing that rather than being forced to buy insurance.   We must work together to save Americans from Obamacare -- you people know that, and everyone knows that at this point -- to create more competition and to bring down the prices substantially.  The chaos that Obamacare has created, and for which congressional Democrats -- and you see that -- are alone and responsible for requires swift action.  I actually told the Republicans that if we did nothing, just do nothing for a two-year period, let Obamacare totally implode -- which it’s doing right now anyway -- that would be, from a political standpoint, the best thing we could do is to let it implode, and then people will come begging -- the Democrats will come begging to do something to help them out of the jam. Once we start doing it, we sort of inherit the problem, we take over the problem, it becomes ours.  But it’s the right thing to do for the American people.  I think allowing this to go on -- this disaster to go on -- is a mistake.  So I’m asking Secretary Price to work with you to stabilize the insurance markets and to ensure a smooth transition to the new plan.  And the new plan will be a great plan for the patients, for the people, and hopefully for the companies.  It's going to be a very competitive plan.  And costs will come down, and I think the healthcare will go up very, very substantially.  I think people are going to like it a lot. We’ve taken the best of everything we can take.  It’s our hope that Democrats will stop the obstruction and resistance.  And that’s what they have -- in fact, they have a sign, "resist, resist."  They want to resist everything, including Cabinet members.  I have many Cabinet members that haven’t been approved yet, people that are extraordinary -- all of whom are going to be approved, but they just take forever.  It’s called obstruct and resist.  Hope I didn’t give them a new phrase, because their real phrase is “resist.”  I think I just gave them another word.  I shouldn’t have done that.  I’m good at branding.  (Laughter.)  You’re going to see them now come out, “obstruct and resist.”  All right, well, at least I can take credit for it.   And they worked with us, and we are going to hopefully work with the Democrats, because ultimately we’re all people that love this country and we want to do the right thing, including reforms like expanded healthcare savings accounts, state flexibility, and the ability to purchase across state lines.  The state lines are so important for competition.  Everybody has wanted to do it for years.  What’s not to do?  So that’s going to be very important. I want to thank you all for being here.  I want to know and I want you to know that it’s an honor to do business with you.  It’s a great honor to have you in the White House.  And we look forward to providing healthcare that is that is extraordinary -- better than any other country anywhere in the world.  And we can do that.  We have the talent, we have the capacity, and we have the people.  So we’ll work on that together.  And maybe before the press leaves, you can just introduce yourself and your company, and the public will get to see what you're about.  And then if things aren’t working out, I’m blaming you anyway.  (Laughter.)  So we’ll start with Brad. MR. WILSON:  Thank you, Mr. President.  I appreciate the opportunity to be here.  I’m Brad Wilson, president and CEO of Blue Cross and Blue Shield of North Carolina, and pleased to represent our 3.9 million customers here today. THE PRESIDENT:  That's great, Brad.  Great job. MR. BERTOLINI:  Mark Bertolini, chairman and CEO of Aetna.   THE PRESIDENT:  Aetna -- good one.   PARTICIPANT:  And I also represent America’s health insurance plans.  We represent all health insurance plans in Washington, D.C., including the plan to cover Medicaid managed care. THE PRESIDENT:  Great. MR. BROUSSARD:  Bruce Broussard, CEO of Humana. MR. GARRITY:  Pat Garrity, I’m the CEO of Florida Blue, the Blue Cross Blue Shield plan in the state of Florida.  THE PRESIDENT:  Great. MR. HEMSLEY:  I’m Steve Hemsley from UnitedHealth Group.  We're a diversified health care company of about 230,000 employees.  We serve about 120 million Americans.  And we are contributing in terms of the jobs we've -- 35,000 in the last five years and 10,000 in the coming year.  We're a mission-driven enterprise, help people live healthier lives, and make the system work for everyone. THE PRESIDENT:  Good, thank you very much. MR. CORDANI:  Mr. President, David Cordani from Cigna Corporation.  We're a global health service company. MR. SEROTA:  Scott Serota, Blue Cross Blue Shield Association.  We represent 108 million subscribers.   THE PRESIDENT:  108 million, that's a pretty big deal, right?  MR. SEROTA:  Yes, it is. THE PRESIDENT:  Pretty big. MR. SWEDISH:  Good morning, Mr. President.  I’m Joe Swedish with Anthem.  We're in 14 states, representing 40 percent of the American public.  We have 40 million members, and we've been involved in the individual (inaudible) for probably seven decades, and deeply embedded in the Affordable Care Act situation that has evolved over the last three years.  I don't want to miss the opportunity to thank you for the swift and decisive action that occurred most recently regarding some adjustments that have occurred in and around -- THE PRESIDENT:  We had to step in.   MR. SWEDISH:  Thank you very much. THE PRESIDENT:  It was going to be an implosion.  We had to step in.  Thank you for saying that. MR. SWEDISH:  Thank you, sir.  Thank you. MR. TYSON:  I’m Bernard Tyson, chairman and CEO of Kaiser Foundation Health Plan, better known as Kaiser Permanente.  We cover 11.7 million Americans.  We also are an integrated delivery system, so we both provide the coverage and the care.  We have Permanente medical groups that contract exclusively with Kaiser Foundation Health Plan.  And we're proud to care for 11.7 million people.  THE PRESIDENT:  Thank you, Bernard. MR. HILFERTY:  Mr. President, I’m Dan Hilferty.  I’m based in Philadelphia with Independence Blue Cross, Independence Health Group.  We're in 32 states and the District of Columbia and a large Medicaid managed care population.   We're the only player on the exchange in the five-county Philadelphia area.  And again, I’d like to echo Joe’s point.  We were thrilled with the initial steps to stabilize the market.  We look forward to working with you, Vice President Pence, Secretary Price in making sure that we have a sustainable program for years to come.  So thank you. THE PRESIDENT:  Well, thank you very much.  And the market, as you know, and we talk about stabilizing the market -- the market is disastrous.  It’s going to absolutely implode.  That's why we're meeting today.  And I think we're going to come up with something where not only will the market be great, but the people are going to be taken care of.  So we will work that out I think quite easily, actually. Thank you very much.  Thank you, everybody.  END  11:12 A.M. EST

24 февраля, 13:05

4 Ways CEOs Can Conquer Short-Termism

In a recent survey, 70% of respondents said that CEOs focus too much on short-term financial results, and nearly 60% said that they don’t focus enough on positive long-term impact. These findings mirror the growing chorus of voices in business and academia that point to short-termism as being a major threat to business. It’s easy to fault CEOs for being too fixated on the short term. However, we believe that most CEOs don’t lack good intent. Rather, they’re missing a practical road map to beat back short-termism and build enduring firms — ones that deliver superior economic returns, make positive contributions to society, and inspire public trust. We offer such a roadmap here, the outcome of a research project, at the Center for Higher Ambition Leadership, with 25 CEOs and their practices for mastering short-term pressures and creating long-term social and economic value, even in the toughest conditions. Here are four practices that stand out: Tell a Story That Is Bigger Than Quarterly Earnings The CEOs in our study were adept at telling their company’s story. Great stories are credible, simple, consistent, and use both financial and nonfinancial metrics to link a long-term vision and firm values with a distinctive business strategy and focused operational priorities. Essential to the story is the company’s purpose. Fred Lynch, CEO of Masonite, a 92-year-old company that manufactures interior doors and entry door systems, created a long-term value creation thesis that he called the Masonite “blueprint.” The blueprint included the company’s purpose, vision, values, and strategic goals, and fits on a single page. Purpose is the why, says Lynch: “Why do people get up and come to work in the morning?” For people at Masonite, it’s not just about building doors; it’s about breaking down barriers. The company’s stated purpose is to “help people walk through walls.” Masonite fulfills that purpose not only with its door products but also by breaking down barriers to development for employees, through the company’s intensive training and leadership development programs, and in the larger community, by helping local high school students and newly immigrated workers find well-paying work and connect to resources that can help them thrive. CEOs in our study repeated their companies’ stories often and consistently to all their stakeholders — employees, boards, customers, business partners, communities, and the general public. As Doug Conant, former CEO of Campbell’s Soup, put it, “I declared what we needed to do, and I was incredibly, obnoxiously consistent.” Keeping it simple, with five core strategies in his long-term plan, helped people remember his message. A purpose-driven story of value creation that is clearly and powerfully told is a CEO’s first line of defense against short-term pressures. Once in place, it both generates commitment of employees and customers and puts the short term and the quarter in context as the immediate building blocks to longer-term goals. The story can then be referenced to justify business decisions that build, rather than erode, the fundamental assets that underlie long-term value creation: trust-based relationships and distinctive firm capabilities. Muster the Courage to Set Realistic Targets The quickest way to spring the short-term trap is to set overly ambitious targets — the kind that make the CEO a hero with investors in the short term, but threaten the long-term plan by, for instance, skimping on scheduled maintenance, cutting R&D investment, and shrinking travel and training budgets. Mark Bertolini, CEO of Aetna, began his tenure, in 2010, by lowering targets by over one-third, in a single bold move. Bertolini observed that many of his peers had been promising 15% earnings per share (EPS), even during the financial crisis of 2009. Bertolini knew that such unrealistic targets would create problems. “If you promise those kinds of returns, you’re going to do stupid things to your company and to your fundamentals to make that 15% work.” Bertolini and his team studied the industry and concluded that a reasonable target was no more than 6% EPS. By telling Wall Street not to expect unrealistic growth, he could focus on investing in future growth and better supporting customers and employees. In 2015, for instance, he raised the base employee wage by 33%, to $16 an hour, and introduced an enhanced benefit program for employees with household incomes under 300% of the federal poverty level, potentially saving them thousands per year in health care costs. Aetna’s growth and employee investment strategy has paid off: Its stock rose threefold in the last five years, and it posted record revenue and earnings in 2016. CEOs have a great deal of control over the financial targets they set. However, once the targets are decided on, the company must live up to them in order to build and retain credibility with investors. Setting them high — too high to sustain for long — is a tempting way to drive performance. But the pursuit of those performance goals may drive bad decisions and harm the company’s long-term prospects. Setting realistic targets is only possible after thoughtful analysis, and requires the board’s agreement along with a good measure of courage from the CEO. Adopt a Both/And Performance Mindset The CEOs in our study saw no contradiction between short-term performance and long-term value. They operated with a both/and mindset, seeking to deliver on immediate goals in a way that also built a sustainable future. Dick Gochnauer, the former CEO of United Stationers (Essendant), put it succinctly: “Most leaders come to realize that you can’t overfocus on one or the other.” The challenge faced by all our study CEOs was how to instill that both/and mindset throughout the entire organization. Doug Conant got his senior team aligned around a both/and outlook using positive peer pressure. He developed a three-year plan for his turnaround vision, which was translated into annual and quarterly operating plans, and biquarterly responsibilities for his executive team. “And then,” Conant described, “my team had to send me postings every Friday on how they were doing against quarterly expectations, followed by a group meeting every Monday morning. The power of that process was that I got their attention. And the beauty was that it became a self-governing system. After a little while, the guy in International was saying to the person running North America, ‘Last month didn’t you say that the project was going to be done by now? Has something changed?’ And all of a sudden my whole team had an appreciation for our long-term plan and how we were going to get there.” Many CEOs in our interviews emphasized the importance of choosing the right metrics to support both/and decision making. Brad Hewitt, CEO of Thrivent, has developed leading indicators for his long-term strategic intent that are organized in layers, from short term (one to three years) to medium term (three to five years). Shorter-term metrics are designed to be leading indicators for long-term strategic intent, and are integrated into the company’s incentive plans. The key to getting this system to work is ongoing reflection and adjustment to ensure that the short-term and medium-term metrics are truly the right leading indicators for a long-term strategic intent, and aren’t motivating unintended short-term behaviors. Stay True to Your Values The CEOs in our study made clear that the demands to deliver short-term results can be brutal and unrelenting, and that standing up to them requires a tough skin and a strong moral center. Consider, once again, the case of Fred Lynch. Before Lynch’s arrival, the private equity firm KKR bought Masonite for more than $2.7 billion. Masonite began to struggle shortly after the deal was completed, in 2005, and then declared bankruptcy in 2009. Lynch, who came on board as CEO in 2007, steered the company through that bankruptcy, cutting costs dramatically and laying off nearly half the company’s workforce. No matter how difficult, with every move he made, Lynch aimed to act with integrity. In keeping with Masonite’s values of transparency and fairness, the entire senior team froze their own pay and took furloughs. They were completely candid with workers about the company’s situation and the need for layoffs. All employees were given at least two months’ notice prior to a layoff, and a severance package. This value-based leadership paid off. Rather than destroying morale, Masonite built stronger trust with workers through the downsizing — trust that laid the foundation for a return to profitability. As Lynch put it, “We might have had to burn some furniture to survive, but we couldn’t pull the studs out of the walls.” Preserving the company’s culture and the trust of its workers was what kept the walls up in the short term, steadying them to support Lynch’s longer-term plan. As Masonite regained financial health, the company’s hedge fund investors pushed for a short-term approach, urging the board to load the company up with debt and approve a dividend recapitalization. With his long-term vision in mind, Lynch found the courage to push back, putting his job on the line in the process. “As the leader of the company, I said there was no way were we going to put ourselves in that position again. If the board was going to do that, then they should find another CEO, because that’s not what I wanted to do. Thankfully, our board members were all on the same page.” These four practices operate together as a system. Purpose motivates and inspires people to work toward building long-term relationships based on trust and mutual commitment. Realistic targets make it possible to deliver both short-term performance results and long-term value creation. Internal practices, led by the CEO, reinforce the both/and mindset. But these three elements can only work if people inside and outside a firm believe that its leaders will protect company values and uphold their trust in good times and in bad. Short-termism can be conquered, one quarter at a time.