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Politics : Idea Of The Day

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To: j g cordes who wrote (15720)	12/18/1997 4:57:00 PM
From: Logain Ablar	Read Replies (2) of 50167

Jim (& Judy) Look @ AET today. IMO this is the prelude of the new chairman setting up for a charge in 4th quarter. He can still blame the charge on his predessor (a favorite Aetna ploy). This may not happen but I've seen it before. AET is a better buy than OXHP but I'd still stay away from both. If AET takes a charge and there is a sell of then as well it will be the time to buy Yesterday I was cut from finishing my OXHP comments. Jim I fully expect OXHP to either go bankrupt of be acquired (at a lower price than today) by a competitor. Factor this into your "gamble". I've been wrong on many investments lately so factor that into the equation as well. Why I'm negative on OXHP and the sector as a whole. 1) OXHP has under priced their business for next year. 2) The IBNR reserve adjustment was for business on the books today (todays earned premium not next years). 3) OXHP has been painting a pretty picture for brokers (I listened to one conference call) and the news from last week is at odds from what OXHP has been selling. The brokers will now start to place more business with competitors. 4) Providers are very upset with OXHP. Before they used to be the HMO of choice. Not any longer. Would you want to see patients knowing you may not be paid or that it may take 6 to 9 months to collect. Of course not you'd want your patients to be covered by another provider. [this is just an assumption on my part] 5) Who will be the other provider. The lesser of many evils from the providers standpoint. AET used to be top on the list but the US Healthcare side is more agressive and has alienated many doctors. CI - they have unpublished problems with thier claim system (I don't know how bad, I would think its on the scale of AET's vs OXHP's). PRU - I heard they are in terrible shape. UHC - I don't know on this. I would hope they've integrated Metra by now. The Blues don't talk to each other so employers with multi-state locations don't do business (at least in the tri state area, OXHP's bread and butter). I expect AET and CI to get their act together by 2nd qtr of 98. It will take OXHP that long as well. 6) OXHP management has misrepresented financial information to the insurance departments (I would hate to be the actuary and auditor that signed off on its regulatory filings and gaap statments) and committed fraud. Lawsuits have started and resources (time and money) will be needed to settle. 7) Who can buy OXHP. Pru is on the block and CI, AET and United have a large presence in the tristate region which would make FTC approval difficult. Also the whole sector is having difficulty obtaining enough concessions from providers and higer rates from employers. The AET flap with the doctors only hurts on this. Jim this is just my read. Maybe this is already factored into the $16 and its not as bad as I think. I just think there are better opportunites out there. Of course it appears tax selling is in full bloom right now which may provide an opportunity for right after the year. Best regards, Tim An acquisition would be difficult

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