UnitedHealth says: blame it on bad PR…
Many years ago, I picked up the business section of the Sarasota Herald Tribune, a newspaper that I used to compete against, and saw this headline: “Negative Press Prompts Bank President to Resign”. Apparently, my articles in the Bradenton Herald questioning the accounting techniques at the now-defunct Key Florida Bank were too much for the CEO to bear and he decided to leave as a result. I still have that headline, which sounds as phony now as it did then. I was reminded of it when I caught this line in UnitedHealth’s (UNH) recent 10-K, which seemed to pin some of the problems facing healthcare these days on negative publicity. Here’s a snippet:
The health care industry is subject to negative publicity. Negative publicity may result in increased regulation and legislative review of industry practices, which may further increase our costs of doing business and adversely affect our profitability by: adversely affecting our ability to market our products and services; requiring us to change our products and services; or increasing the regulatory burdens under which we operate.
The warning was new in this year’s filing, which means it’s clearly on the minds of the attorneys involved in drafting the filing. To be sure, United Health has experienced some negative publicity, much of it related to the well-timed stock options given to former Chairman and CEO Bill McGuire. Still, late last year, McGuire settled with the SEC, so there’s unlikely to be much negative publicity on that front going forward.
Perhaps the company is worried about whatever healthcare plan emerges from the current political debate. With the two leading Democratic contenders arguing over who is covered and who is left out, not to mention how to pay for it, it’s clear that there’s growing momentum to make some significant changes. Indeed, the company warns investors about the ways of Congress and their equally pesky counterparts in numerous state legislatures:
State legislatures and Congress continue to focus on health care issues. Legislative and regulatory proposals at state and federal levels may affect certain aspects of our business…Additionally, there have been legislative attempts to limit ERISA’s preemptive effect of the on state laws. If adopted, such limitations could increase our liability exposure and could permit greater state regulation of our operations.”
Finally, there was an interesting change in the way that UnitedHealtcare described its business: “Our focus is on enhancing the performance of the health system and improving the overall health and well-being of the people we serve and their communities…to expand access to high quality health care. We help people get the care they need at an affordable cost, support the physician/patient relationship, and empower people.”
See? Doesn’t that make you feel better about the healthcare mess in this country? Or at least about United?