Are The BUCA’s Invested In Higher Medical Costs?

Here’s a simple calculation of the stock price growth of major health plans – United, Aetna, CIGNA, Humana and Anthem – over a period of just less than 9 years since the passage of the Affordable Care Act. Stock price has grown a breathtaking 5.3x-9.6x, about 3x the growth of the Dow Jones Index and 2.5x the growth of the S&P over this period.

This spectacular growth is a blessing and a curse for the major health plans, which will be hard pressed to maintain the momentum they’ve experienced for nearly a decade. It is also reasonable to argue that continued earnings growth will be necessary to maintain stock price; programs that reduce total spending will likely also reduce earnings, which would be at cross purposes with financial goals.


Major Health Plan Stock Price Growth – 3/15/09 – 1/31/18
United Aetna CIGNA Humana Anthem Dow-Jones S&P 500
May 15, 2009 27.51 25.76 21.66 31.58 46.88 8268.64 756.55
January 31, 2018 236.65 187.89 208.35 281.83 247.85 26,149.39 2,823.81
Growth 8.60 7.29 9.62 8.92 5.29 3.16 3.73
Growth re: DJI 3.40 2.88 3.80 3.53 2.09
Growth re: S&P 2.72 2.31 3.04 2.82 1.67


Brian Klepper, PhD

Principal, Worksite Health Advisors
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Editor’s Note: This is an email sent through a listserv of industry insiders whose common goals are fixing the current broken health care delivery system. The response to this on the listserv is many. Below is one of them:

Well said and thanks for updating those slides you shared a year ago.  I hope I don’t offend anyone by getting all biblical on everyone, but take a lesson from Matthew 6:24 – 24 “No one can serve two masters. Either you will hate the one and love the other, or you will be devoted to the one and despise the other. You cannot serve both God and money – Carl Schuessler

What is the #1 fiduciary responsibility for a publicly traded company?  Shareholder……If you are an insurance company….what is the primary way you increase revenue – raise premiums, higher claims, so BUCAH’s have fiduciary responsibility to let claims go up to raise premiums and increase revenues which is in direct conflict of a self-funded employer’s fiduciary responsibility.  Carriers have a fiduciary responsibility to their investors – not employers – can’t serve 2 masters