Among other news outlets, the Indianapolis Star reported that giant health care insurance company/ for-profit managed care organization WellPoint has had trouble with its investment portfolio:
WellPoint is like many other investors these days: Its portfolio took a sizable hit from the financial crisis.
The Indianapolis-based health insurance giant saw its quarterly profit fall 5.4 percent, dragged down by investment losses.
The company Wednesday reported a profit of $820.7 million for the third quarter ending Sept. 30. That is down from a profit of $868 million a year earlier. WellPoint’s quarterly revenue of about $15 billion also was down slightly from a year ago.
WellPoint stated that those results included pre-tax investment losses of $562.6 million, or 71 cents a share. Of those losses, $229.5 million came from investments in mortgage lenders Fannie Mae and Freddie Mac and $88.5 million from bankrupt Lehman Brothers.
A long time ago, the argument was made that managed care organizations would be superior able to manage care than would health care professionals. This seemed to come out of thinking prevalent towards the end of the 2oth century that professional managers and executives somehow could manage any kind of endeavor superior than people who were trained in the context in which the endeavor operated. The 21st century seems to be on its way to correcting that notion.
The current example advocates that the businesspeople now in charge of health care insurance and managed care (and most other kinds of health care organizations) are not even good at managing how they invest their financial researces. Investment management is clearly much closer to what ought to be the core expertise of businesspeople than health care. If they can’t manage their investments well, is it any surprise that they’ve not managed health care well? (And we’ve had occasion, most recently here, to write about WellPoint’s less than stellar management in areas that more directly impact patient care.)
[Source : Health Care Renewal]
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