Jeffrey, re: OXHP
<<I am telling the folks on this thread that if you lose control of the
data you have a real problem. >>
Yes, but we already know they had a real problem to the tune of
>$90M hit to the balance sheet. Rather than a rate increase,
Oxford charged it off the balance sheet. Check with Oxford -
their rates are still among the most reasonable in the area,
and they have no plans to increase rates to make up the AR
charge or the AP charge. They've just swallowed it, however
painful.
This contrasts directlly with, say Aetna's attempts to force
contracts of adhesion on its doctors. When many doctors have
a real problem with a plan, the AMA knows about it, and hence
I should know about it. The Oxford mess was not a big issue at the
AMA as far as I know.
Just from the physician feedback I've received, Oxford seems
to have had a better reputation than most of being attuned
to doctor's needs than most. In the last year this has been
tainted by the claims delays, but in general physicians have
found Oxford to be understanding and innovative in their plans.
And they did advance up to $270 million as an open checkbook to
try to keep physicians happy, which most others would not have
done. This drastically reduced the anger providers would otherwise
have felt. Most importantly, the patients have been extremely
happy with Oxford.
Management, with its Freedom Plan which allows choice, its
Alternative Health rider which allows coverage of acupuncture
and the like and helped it win contracts with big "alternative
health"-employee-rich employers like Donna Karan, and its
specialty management services which is the first plan to directly
distribute some power to specialist groups; all of these
have established that management is innovative and competent.
Oxford is also moving ahead with its Florida expansion. Many
had thought that they would delay this, but their position is
that they have their IS problems under control and they are
now financially strong, so there is no reason to not expand
as planned. This will introduce their excellent management and
innovative plans into another market which does not any
claims bias.
Once again, I'll disagree and say that in the low-mid20's
OXHP has most of its problems discounted, with possible over-
allotment of reserves for claims, conservative AR numbers,
a strong balance sheet, and the likelihood of
mediocre but very positive earnings >$1 share next year,
going up from there.
I see $6 billion in revenues next year on sale for less than
one third that now. The risks are further disclosures by management,
which would be truly criminal, and Clinton, who recently
recommended further federal oversight of HMO's.
Good Investing,
Mike |
