Commentary - 03/07/2008

Exposing HealthCare Cost Inflators

Here's the latest headlines of those trying to control healthcare inflation:
Cuomo expands probe of some of nation's biggest health insurers - Newsday.com
Cuomo presses health insurers for payment info - Business Insurance

Cuomo Expands Probe of Health Insurers - AP

ALBANY, N.Y. (AP) New York Attorney General Andrew Cuomo said Thursday he issued new subpoenas to Aetna Inc., Cigna Corp., UnitedHealth Group Inc. and WellPoint Inc., and other health insurers in a broadening investigation of possible fraud costing consumers hundreds of millions of dollars.
The above links goes to the tables below. The point I'd like to make is that all four of these are corporate plantations. By that, I mean that not a single insider has even a 1% interest in the corportation. All four are completely governed by board of directors that report to the Major Holders. The CEO reports to the board, and since he has less than 1% interest in the company, could rightfully be called the plantation manager, especially considering the salary and perks.

Another important point is that less than 2% of the Major Holders control more than 40% of each corporation, with some over 50%. That's an enormous amount of control of major corporations placed into a few hands. No wonder it doesn't take much to get them working together.

These same Major Holders also show up as Major Holders in investment banks and money center banks. So you can be sure they're strictly interested in big profits, rather than you and your family's health. In certain hospital chains, such as Hospital Corporation of America [HCA], this profit concentration has resulted in nurses unionizing. Senator Bill Frist won big from HCA's existence. [Financial Status]

Since these same Major Holders are also found in hospital chains, big pharma companies and even air ambulance companies such as Air Methods, it is any wonder that healthcare can charge any amount that they can get away with. With the enormous lobbying sums spent every year, not even Congress will touch them. But they insist we pay and pay till we go bankrupt.

Yes, I'm angry. Especially when a 20 minute air ambulance which wasn't required cost $8,500! And it didn't get to its destination any faster than a regular ambulance, which would have cost around $900 at most. The patient had driven himself alone to the hospital in the first place!

Another air ambulance trip that I know of billed almost $13,000 for a 45 minute flight. That flight was not required either. The patient actually tried to decline it. The doctor on duty said that he must accept it, probably due to the fact it may had already been called before telling the patient. Adding insult to injury, the patient was kept only under observation for 3 hours at the destination while waiting for a CAT scan. No further work was done on him, and he was discharged 24 hours later. This is certainly reckless use of expensive emergency equipment.

Helicopter overhead is about $1000 per hour, so these sums are outrageous. Yet they use the court system as a hammer to make patients pay up, plus interest! These two patients did not have medical insurance either, so they're being hit full force. Those who do have insurance pay both the premiums and whatever the insurance doesn't cover. It seems such a scam in these non-emergency situations. I fully understand when it's actually needed.

Another example is $113 for 1000ml of IV fluid. That's half a liter of distilled water with a little bit of salt. Your Pepsi bottle that costs $2 max is 2000ml, or 2 liters. And you can bet it has more processing and more substances in it than the IV fluid. Now imagine this 1000's of times each day across America. But it's not stopped because the same Major Holders have their say in every corner of healthcare and insurance.

That's enough. I'm too angry to keep going. It just goes to show you that:

Sometimes The Dragon Wins

Symbol Name Of Corporation
AET

Major
Holders
Aetna Inc. (As of 31-Dec-2007)
Top 10 Institutional HoldersShares2007Value2006
Capital Research And Management Company40,606,5658.11%$2,203,718,282-.--%
Legg Mason Capital Management, Inc.36,215,4787.24%$2,090,719,544-.--%
State Street Corporation28,817,1795.76%$1,663,615,743-.--%
Capital Research Global Investors20,951,5654.19%$1,209,533,847-.--%
Capital World Investors20,155,0004.03%$1,163,548,150-.--%
AXA (Paris, France)17,738,0933.54%$1,024,020,108-.--%
Barclays Global Investors UK Holdings Ltd16,112,1543.22%$930,154,650-.--%
Price (T.Rowe) Associates Inc15,942,1053.19%$920,337,721-.--%
Vanguard Group, Inc. (The)14,990,3823.00%$865,394,752-.--%
Blackrock Investment Management LLC10,189,9772.04%$588,267,372-.--%
% of Shares Held by All Insider and 5% Owners:0%-.--%
Top 10 [1.6%] of 635 Institutional Holders Control44.32%-.--%
Percentage of Barclays and "Associates" Control21.45%-.--%
NOTE: Capital Group manages four funds that control 9.31%.
Legg-Mason manages a fund that controls 2.97%.
T.Rowe Price manages a fund that controls 1.25%.
Therefore, the TOP 10 major holders actually control 57.85%, and
Barclays/Associates control 25.67% of Aetna.

Symbol Name Of Corporation
CI

Major
Holders
CIGNA Corp. (As of 31-Dec-2007)
Top 10 Institutional HoldersShares2007Value2006
State Street Corporation11,854,3474.25%$636,934,064-.--%
Capital Research And Management Company11,730,0004.20%$625,091,700-.--%
Barclays Global Investors UK Holdings Ltd9,803,0593.51%$526,718,360-.--%
Janus Capital Management, LLC8,956,5913.21%$481,237,634-.--%
Vanguard Group, Inc. (The)8,948,4483.21%$480,800,111-.--%
Capital World Investors8,730,0003.13%$469,062,900-.--%
Bank of New York Mellon Corporation7,881,0342.82%$423,447,956-.--%
Price (T.Rowe) Associates Inc7,216,3922.59%$387,736,742-.--%
Bank Of America Corporation6,576,5782.36%$353,359,535-.--%
Wellington Management Company, LLP6,052,2802.17%$325,189,004-.--%
% of Shares Held by All Insider and 5% Owners:0%-.--%
Top 10 [1.9%] of 529 Institutional Holders Control31.45%-.--%
Percentage of Barclays and "Associates" Control18.74%-.--%
NOTE: Capital Group manages five funds that control 5.07%.
Vanguard manages four funds that control 4.23%.
Therefore, the TOP 10 major holders control 40.75% of Cigna.

Symbol Name Of Corporation
UNH

Major
Holders
Unitedhealth Group, Inc. (As of 31-Dec-2007)
Top 10 Institutional HoldersShares2007Value2006
Capital Research And Management Company72,015,0005.57%$3,487,686,450-.--%
Marsico Capital Management, LLC65,835,7835.10%$3,831,642,570-.--%
Barclays Global Investors UK Holdings Ltd57,430,4374.44%$3,342,451,433-.--%
FMR LLC (Fidelity)47,307,1173.66%$2,753,274,209-.--%
Clearbridge Advisors, LLC47,048,1173.64%$2,738,200,409-.--%
State Street Corporation43,806,8723.39%$2,549,559,950-.--%
Legg Mason Capital Management, Inc.41,706,8743.23%$2,427,340,066-.--%
Capital Research Global Investors41,607,5003.22%$2,421,556,500-.--%
Capital World Investors39,665,5003.07%$2,308,532,100-.--%
Vanguard Group, Inc. (The)38,343,8512.97%$2,231,612,128-.--%
% of Shares Held by All Insider and 5% Owners:0%-.--%
Top 10 [1.0%] of 939 Institutional Holders Control38.29%-.--%
Percentage of Barclays and "Associates" Control11.06%-.--%
NOTE: Capital Group manages four funds that control 7.32%.
Legg-Mason manages two funds that control 2.45%.
Vanguard manages a fund that controls 0.97%.
Therefore, the TOP 10 major holders control 49.03%, and
Barclays/Associates control 13.51% of UnitedHealth.

Symbol Name Of Corporation
WLP

Major
Holders
WellPoint Inc. (As of 31-Dec-2007)
Top 10 Institutional HoldersShares2007Value2006
AXA (Paris, France)32,619,8085.71%$2,861,735,755-.--%
Dodge & Cox Inc31,463,8055.51%$2,760,319,612-.--%
Capital Research And Management Company20,571,3533.60%$1,623,491,178-.--%
State Street Corporation20,275,2833.55%$1,778,750,577-.--%
Barrow, Hanley Mewhinney & Strauss, Inc. (Old Mutual)18,338,6903.21%$1,608,853,273-.--%
Barclays Global Investors UK Holdings Ltd17,539,3593.07%$1,538,727,965-.--%
Vanguard Group, Inc. (The)17,241,9393.02%$1,512,635,308-.--%
Wellington Management Company, Llp14,802,7002.59%$1,298,640,871-.--%
Price (T.Rowe) Associates Inc14,615,5662.56%$1,282,223,605-.--%
Capital Research Global Investors13,700,0002.40%$1,201,901,000-.--%
% of Shares Held by All Insider and 5% Owners:0%-.--%
Top 10 [1.3%] of 793 Institutional Holders Control35.22%-.--%
Percentage of Barclays and "Associates" Control9.18%-.--%
NOTE: Capital Group manages four funds that control 5.47%.
Dodge & Cox manages two funds that control 4.05%.
Vanguard manages three funds that control 3.28%.
T.Rowe Price manages a fund that controls 1.00%.
Therefore, the TOP 10 major holders control 49.02%, and
Barclays/Associates control 10.18% of Wellpoint, Inc.

2008 by Edward Ulysses Cate
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