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Biotech / Medical : Oxford Health Plan (OXHP)

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To: Michael Burry who wrote (702)	1/2/1998 6:47:00 AM
From: robt justine	Read Replies (1) of 2068

Michael, although I'm not on familiar ground in responding when someone wants to grow his trivial error into a significant one, I'll give it a shot. You wrote: <<You took the first two sentences. Maybe you didn't read the rest? From what you're suggesting I was saying that costs and premiums would move up equally, which would of course decrease the medical loss ratio - yet I point out it is on the rise!>> <<Your point is valid Premier, if the numbers are good. But if costs also increase 5-10%, it's a zero sum.>> It is not necessary for me to suggest anything. It is there in black and white. You said that assuming that costs and premiums rose by the same percentage "then it is a zero sum". This is incorrect. I now wonder whether you understand this. But I think we've wasted enough time on it. If you don't understand the concept, then you don't understand the concept. After taking the false premise that equal percentage moves in costs and revenues are "zero sum", you then DO happen to mention that you think costs are increasing faster than any increase in premium that OXHP may get to bolster your negative argument about the company. I am just saying that you should go back and correct your premise, that's all. <<Otherwise why would I point to an increasing Medical Loss Ratio!!!>> Mike, I think that this statement appears somewhat comical in nature seeing as how bullish you were on this company not much more than a month ago. I see that you wrote a "report" on OXHP on November 21 and you make no mention of increasing costs in the industry other than on the Medicare side. And this company has already stated that it wants to restructure its Medicare business. Have industry costs changed that dramatically in one month or have you just come to realize the cost side of the business as a danger which should prompt your negativity?

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