Hospitals, Large Providers, Integrated
- UNH M 235
- HUM | 36
- Speciality, Community, Senior Care
UNH M 235
the world's biggest health insurance company by far. Its UnitedHealthcare business covers around 50 million individuals.
The company's health insurance segment generates more than 80% of UnitedHealth Group's total revenue.
c266 +18%ytd phe posted great q3’18 PF=21x fcft=22x vs indut 18x PEG=1.6x
x UNH - time to sell, highly valued
- Q3’18 Cramer fav > n$3.41/sh yoy+28% beat exp $3.3. $+12%yoy - raised net earns to $12.10 from prior $11.9
- FY’18 e$12.8 y27% on $225b y12%
- FY’19 e14.6 y14% on $244b y8.2%
SEG: Insure Employer and individual
SEG: Medicare and retirement
Increased demand for UnitedHealthcare's Medicare Advantage plans has helped the Medicare and retirement business become the fastest-growing
SEG: Community and state
These businesses are typically more profitable than the company's health insurance segment.
OptumHealth provides health management and health financial services.
OptumInsight provides healthcare technology services.
OptumRx is a leading pharmacy benefits manager (PBM).
HUM | 36
Overview R5 to be hurt most on Medicare4All
Humana is one of the nation’s largest Medicare Advantage providers, with individual Medicare Advantage membership expected to grow 14% to 440,000 members in 2019.
Humana posted first-quarter earnings and revenue that beat Wall Street’s expectations. Shares of the insurer were 2% lower in midmorning trading. The stock is down more than 10% percent this year.
Humana was thought to be a potential buyout target for Walgreens Boots Alliance or Walmart. Humana and Aetna tried to merge in 2017 but the deal was blocked by a federal court. In June 2019, Humana squelched rumors that the company might acquire Centene.
In 2018 Q3 it acquired a 40% stake in Kindred At Home, which includes the former home health business of Kindred Healthcare and the hospice business of Curo Health Services. And while rumors that Walgreens might buy Humana haven't panned out, the two companies are working closely together on one front: Humana is operating senior-focused primary care clinics within Walgreens stores in Kansas City.
65% SEG: Retail Insurance - Medicare plans
The retail segment primarily focuses on marketing Medicare plans. Centene continues to focus largely on the Medicaid managed care market. The company makes more than two-thirds of its total revenue from Medicaid. This is significantly higher than in the past primarily because of Centene's 2018 acquisition of Fidelis Care.
SEG: Employer Insurance - Group and Specialty
Humana's group and specialty segment targets the employer group market with health insurance plus dental, vision, and other insurance products.
SEG: Healthcare services
The company's healthcare services segment includes its PBM and Kindred at Home home health and hospice interest.
The company makes more than three-quarters of its total revenue from Medicare Advantage plans, including individual and group plans. Humana's second-largest source of revenue is its employer group business, which contributes nearly 10% of total revenue.
Speciality, Community, Senior Care
WellCare Health Plans, Inc. provides government-sponsored managed care services.
SEG Medicaid Health Plans
SEG Medicare Health Plans
SEG Medicare Prescription Drug Plans (PDPs)
That would have provided a major shock to the industry. Now that those fears have subsided a bit, the stocks in this industry have been on the move to the upside.
- Earnings estimates on upside - by analysts - curYear $14 to $15.42, fYr EPS $16.5 to $17
HCA +54%ytd Great sheets
CYH Short R4
Short Community Health Systems (CYH): levered rollup of rural hospitals o Company will file for bankruptcy and equity will be worthless o CYH grew from 8,000 to 30,000 beds through acquisitions since 2000’s. Paid 600k per bed o Net debt grew to $16 billion from less than $2 billion since 2005 o Management compensated on revenue and EBITDA. Ignores debt o Admissions have been declining. Patients are choosing to go to urban hospitals. Trend towards outpatients o Rising unit costs o Declining profitability per bed o Slashed capex by 50% per bed over 10 years. Under-investing in new technologies which fuels patient declines o CYH charging more and gauging out of network patients and uninsured. Top in the industry in gauging. Desperate for cash o Over 4 years has sold 1/3 of hospitals. Paid top dollar buying them at 600k. On sale has received 250k per bed and might be getting worse o Debt per bed has increased to over 700k per bed o Company doesn’t generate any cash. Including items the company categorizes as one-time costs they are burning a few hundred million a year. - SRC Ryan Heslop's Sohn@2019 New York Presentation