As a group, the companies (Centene, Cigna, CVS/Aetna, Elevance/Anthem, Humana, Molina and UnitedHealth Group) saw their total revenues increase from $618.2 billion in the first half of 2022 to $683.8 billion during the same period this year.
In spite of profits up from $37 billion to $40.2 in a year, investors thought they’d better shift their money elsewhere to get an even better return on investments. That resulted in the stock prices of these companies going down this past year: while Dow, S&P, and Nasdaq shares went up, Cigna’s went down 23.2% and CVS/Aetna went down 27.7%.
“It’s not that the companies aren’t growing. It’s just that at least some of that growth has not been as profitable as Wall Street demands.” Apparently, these companies were paying more in claims than Wall Street was finding “acceptable.”
BOY, ARE WE IN TROUBLE.
Because, as Potter says, “most of the companies’ growth continues to come from the taxpayer-financed Medicare and Medicaid programs.”
And because 3 of them – our Cigna and CVS/Aetna buddies plus UnitedHealth – control 80% of the Pharmacy Benefit Manager (PBM) market and now operate their own practices and clinics, they can shift monies around to keep their medical loss ratio low (which means less spent on our health care and more on overhead and profits.)
Here’s Potter’s scary conclusion:
But you can read the whole thing yourself if you want to know more specifically why you’re about to throw up.