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PHCS to be sold to MultiPlan

Today, Assurant Health, along with Guardian and Trustmark, the majority owners of Private Health Care Systems (PHCS), announced that we have reached an agreement to sell our interests in PHCS to MultiPlan, Inc.

Assurant Health simultaneously entered into a long-term agreement to enable our customers to continue to have access to PHCS PPO Network providers. That means business will continue normally with no interruption or change for our insureds or agents...

PHCS will be owned and managed by MultiPlan, a leading independent network of heathcare providers. We believe the combined strength of MultiPlan and PHCS will lead to stronger and more diverse networks, which will enhance customer access to providers - and that the agreement is in the best interests of all our stakeholders.

It seems to indicate that folks whose health care plans (and "discount" cards) utilize the PHCS network will have access to more providers. It's also possible [NOTE: rampant, baseless speculation follows] that MP will increase their network access fees (to recoup acquisition costs), which could lead to rate increases.

Frankly, though, I'm not really sure what it means.

Stay tuned.

BMO's ex-CEO Barrett to Retire from Barclays

Reuters, Steve Slater and Jane Merriman, 31 August 2006Barclays Plc, Britain's third-biggest bank, has named veteran investment banker Marcus Agius as its new chairman, replacing Matthew Barrett who retires at the end of December after seven years at the helm.Agius, currently chairman of investment bank Lazard's London business, had been tipped to take over from Barrett, 62 next month, who became

The Night the Lights Went Out in Georgia

After a rocky three-month start-up, Georgia's Medicaid and PeachCare overhaul goes statewide Friday, with hundreds of thousands of patients joining HMOs.

Many physicians have cited payment and patient-care problems experienced when the managed care program started in metro Atlanta and central Georgia in June, and they fear they will surface as the program expands this week. Several doctors said many families still have not received their ID cards for the new program, confusing patients.

In an attempt to shore up a money losing operation, the state opted to allow tighter managed care for their Medicaid program. Based on what has occurred so far it does not appear to be working.

On Wednesday, the state said the total number of people joining HMOs statewide could be one-fourth fewer than expected, in part because the state began checking citizenship and income of beneficiaries on Jan. 1. The total number of people joining HMOs statewide will be 847,000, not 1.2 million as was originally projected, officials said

Note the operative phrase here . . .� began checking citizenship and income of beneficiaries�

Does this mean there were almost 400,000 people receiving free health care that were not eligible?

Kind of put�s a dent in the argument that the private health care system is wasteful. Having 400,000 more people than are truly QUALIFIED is almost a 50% overcharge.

Keep in mind this is TAXPAYER money, not the government.

The government doesn�t have any money.

MCG Health, an Augusta hospital system and leading Medicaid provider, told state officials Tuesday that it would not accept nonemergency Medicaid patients because it had not reached a contract with two HMOs serving that area. Staff members have started canceling patient appointments scheduled for Friday

Fewer Medicaid recipients AND fewer providers willing to see them.

I see a train wreck waiting to happen.

The HMO transition follows years of a traditional system of care in which Medicaid patients were allowed to go to whichever doctor would serve them. But after years of double-digit percentage increases in Medicaid costs, Perdue's administration opted to switch to HMOs, which have a reputation for tighter financial controls.

�Double-digit percentage increases�.

Even Medicaid, with it�s tight fisted tactics could not make a dent in controlling medical care inflation.

Since the start-up, though, physicians have complained that the state's three HMOs have delayed paying them millions of dollars for medical care. This month, a group of Georgia physicians filed suit against the private companies running the Medicaid HMOs, claiming these firms owe millions in outstanding claims to medical providers. The suit alleges the plaintiffs have had to lay off employees and cut back on providing services to low-income residents.

Some patients have also had trouble getting their regular medications and have experienced delays in receiving needed care, medical providers say.

When providers are scheduled to be reimbursed for care at a lower rate, and they are not paid at all, this is a disaster waiting to happen.

The state is counting on a projected $80 million in first-year savings from the initiative. In addition, experts say some doctors and other providers may end up dropping out of Medicaid because of problems, making access to care more difficult for poor patients, possibly pushing them into already overcrowded hospital emergency rooms for routine care.

Wonder how much of that $80M is due to kicking folks off the Medicaid role that never belonged there?

Dr. Adrienne Butler, a Waycross pediatrician, said she retired earlier this month. The upcoming Medicaid transition was "the last straw" for her.

Butler, 59, said she was already losing income, with Medicaid patients being about 80 percent of her practice. "There are families who don't know what [HMO] they're in," Butler said. "The frustration is really high."

This may not be another Tenncare but it could be a close second.

BMO Plans Shanghai Corporate Bank Branch

Bloomberg, Sean B. Pasternak, 31 August 2006Bank of Montreal plans to open its first corporate-banking branch in Shanghai to take advantage of China's surging economy, said Yvan Bourdeau, chief executive officer of BMO Capital Markets.The investment banking unit of Canada's fourth-biggest bank opened a ``representative'' office in Shanghai in 2002, which can refer corporate clients to its

Sun Life's MFS Unit

Boston Globe, Steven Syre, 31 August 2006What does the stock price of Canadian insurance giant Sun Life Financial Inc. say about the future of big Boston mutual fund manager MFS Investment Management?Sun Life shares hit their lowest price of the year four weeks ago, dragged down by the reaction to the company's quarterly financial report and news its president was quitting. Then Sun Life stock

No Sperm For You

[UPDATE: Greetings, Jenn's Journal readers! Please feel free to take a look around]

The British Fertility Society is recommending women with a body mass index of 36 and over should not be allowed access to fertility treatment.

Underweight women and those classed just as obese (BMI over 29) should be forced to address their weight before starting treatment, the society said.

Scooped again!

Joe Kristan, blogging at Roth & Co, has news that one large insurer is making it easier (and cheaper) for employers to set up HSA's.

Helpful info.

Dividend Tax Credit for 2006 & On

GlobeinvestorGOLD, Gordon Pape, 30 August 2006It appears that many people aren�t taking advantage of the great investment opportunities created by the overhaul of the dividend tax credit earlier this year. If you�re in that group, it�s time to update your approach and start thinking seriously about switching some of your non-registered money to dividend-paying securities. You�ll be amazed at how

GoldenCare...

Back in April, Bob alerted us to California's bill SB 840, which would establish a single-payor, "universal" style health care system in the state. Then, earlier this month, he had an update on the bill, and emphasized that "(t)he bill provides nothing. The taxpayers provide the coverage."

Well, the bill has now been passed by the California assembly (it was previously approved by the state senate), and awaits only a few modifications before it heads to The Governator for signature. Or not.

As it stands, the bill would eliminate "regular" insurance plans (group and individual), replacing them with a state-run plan (i.e. expensive, inefficient, tax-gobbling bureaucracy). This will not, of course, affect ERISA plans (which are federally regulated), or (as Bob points out in the comments) public entities. In fact, it may be a boon to the self-funded industry, as employers look for ways to avoid this train wreck.

On the other hand, I'm actually glad to see this effort unfolding in this way. As a 10th amendment supporter, this seems to me the appropriate venue. That is, there is nothing in the Constitution giving the Federal Government the power to commandeer 1/7th of our economy. But "the 10th" reserves such endeavors to the individual states. If it's true that folks vote with their feet (and, of course, their wallets), this new program will be a terrific test of whether or not we're ready for government run health care for all.

How's that ancient Chinese curse go? "May you live in interesting times."

Indeed.

Scotiabank Q3 2006 Earnings

Kevin Frayer, CP File PhotoBMO Capital Markets, 30 August 2006Details & AnalysisScotiabank reported third quarter cash earnings of $934 million, or $0.93 per share, compared to $893 million, or $0.89 per share, last quarter, and $780 million, or $0.77 per share, in the same quarter of last year. This quarter included a $51 million VAT tax recovery that added $0.05 to EPS. As a result, the better

Et Tu, Ken?

"Republican gubernatorial candidate J. Kenneth Blackwell on Thursday unveiled a five-point plan for overhauling Ohio's health care system that would require all Ohioans to have health insurance."

Gee, where have we seen this before?

In fairness, it doesn't look as draconian as the Mass plan (for example, those currently covered under an employer-sponsored group plan would keep that coverage). Because state law requires ER's to treat even the uninsured, that's their first (and often last) stop. Emergency care, though, is the most expensive care in the current system, which further drives up the cost of health care delivery.

As one of our astute commenters has noted, however, "the symptom is not the problem. The problem is the high total cost of health care." He concludes "that tinkering with insurance mechanisms does nothing to address the underlying cost of health care." It's not clear that this initiative will do much (if anything) to address that issue.

Of course, funding for this new program is still "nebulous" (from the Latin nebu, meaning "ripped from" and elous meaning "taxpayers wallets"). We'll keep an eye on this, and let our readers know whether or not it gains any traction here in the Buckeye State.

Latest Cavalcade...

Cavalcade of Risk, that is. Fellow Daytonian Kristin McAllister, hostess of Making Cents, hosts this week's edition of the C of R. She's done an outstanding job, not just organizing all the posts into categories, but by including extensive summaries and even snippets of each one. Kudos, Kristin!

If you're using your cell phone on the road (and who isn't), you'll want to read this post from previous C of R host Julie Ferguson. Writing at Workers Comp Insider, she identifies the problem of work-related cell phone use and employer liability. Kinda scary.

New Criteria

A 79-year-old Norwegian woman says she was denied a driver's license when she couldn't identify the Swedish prime minister or beat her doctor at arm wrestling.

The woman, who later called the doctor "a very unusual man," got her license renewed after appealing to the Norwegian Public Roads Administration and seeing another doctor, the newspaper Oppland Arbeiderblad reported.

The second doctor put her through a more conventional check-up of eyesight, blood pressure and some routine questions.

"First he asked me who the prime minister of Denmark was," the woman told Oppland Arbeiderblad about the first doctor. "Then I said that I wasn't interested in politics and I didn't know, so he asked me if I knew who the prime minister of Sweden was, and I gave him the same answer."

The woman said she worries that most of the people who hear her story find it funny because she has heard similar complaints about the doctor.


Come to think of it, I have no idea who the PM of Denmark is either . . . or Sweden.

The Dirty Side of Universal Health Care

A national health-care system may be the Holy Grail of American liberalism. If only the government managed medicine, the argument goes, costs could be restrained, quality assured and access extended from the poshest beach house to the humblest shotgun shack

But is there a downside?

It would be bad enough if national health care merely offered patients low-quality treatment. Even worse, Ridenour finds, it kills them.
� Breast cancer is fatal to 25 percent of its American victims. In Great Britain and New Zealand, both socialized-medicine havens, breast cancer kills 46 percent of women it strikes.
� Prostate cancer proves fatal to 19 percent of its American sufferers. In single-payer Canada, the National Center for Policy Analysis reports, this ailment kills 25 percent of such men and eradicates 57 percent of their British counterparts.
� After major surgery, a 2003 British study found, 2.5 percent of American patients died in the hospital versus nearly 10 percent of similar Britons. Seriously ill U.S. hospital patients die at one-seventh the pace of those in the U.K.
� "In usual circumstances, people over age 75 should not be accepted" for treatment of end-state renal failure, according to New Zealand's official guidelines. Unfortunately, for older Kiwis, government controls kidney dialysis.
� According to a Populus survey, 98 percent of Britons want to reduce the time between diagnosis and treatment.

Why don�t we ever hear about these stats?

OK, now you have . . .

Gloomy Growth Forecast May Spark Flight to Quality

The Globe and Mail, Carolyn Leitch, 29 August 2006The flock of investors putting money into high-quality assets could turn into a flood as people grow increasingly pessimistic about the global growth picture, predicted Scotia Capital strategist Vincent Delisle.In Canada, the strategist has "overweight" ratings on the financials, telecoms, industrials and consumer staples groups on the S&P/TSX

Fetch

Fetch, Inc. today announced the launch of Petplan Insurance in the United States. Petplan, operated under license by Fetch, Inc. and underwritten by American National Property And Casualty Company, rated A+ (Superior) by AM Best, is the world's leading pet health insurance brand, recommended by more veterinarians, pet owners and pedigree pet breeders than any other.

Medi-Pet anyone?

Or how about Pet-icare?

Deutsche Bank Incurs Growth Pains Chasing Goldman

Bloomberg, Adrian Cox, 28 August 2006Deutsche Bank AG is finding out just how hard it is to be more like Goldman Sachs Group Inc.A decade after Germany's largest bank set out to reinvent itself as a Wall Street-styled securities firm, only New York- based Goldman earns more money from trading stocks, bonds, currencies and derivatives. And, there's little prospect that the gap between them will

Financial Sector ETFs

GlobeinvestorGOLD, Rob Carrick, 28 August 2006Bank stocks are looking good these days, and it�s not just because Bank of Montreal has auspiciously begun the latest round of quarterly financial reporting for the sector.With the U.S. Federal Reserve on hold after a two-year streak of interest rate increases, the stock markets have entered a phase where financial stocks traditionally do well.

RBC Q3 2006 Earnings

Toronto StarBMO Capital Markets, 28 August 2006Details & AnalysisRoyal Bank reported third quarter cash earnings of $1.18 billion, or $0.91 per share, compared to $1.13 billion, or $0.86 per share, in the last quarter, and $988 million, or $0.76 per share in the same quarter of last year. The previous quarters include one-time items and all three quarters include the negative impact of

A Rainy Money Monday...

The bad news is, it's gray, wet and ugly here in southwestern Ohio this morning. The good news is that Frugal at My 1st Million (at 33!) is hosting this week's edition of the Carnival of Personal Finance. He's collected, collated, and organized almost 50 submissions. Great job!

Mapgirl has a helpful post on how to maximize your doctor's visit. Some is just common sense, of course, but since when is that a bad thing? Seriously, a useful post, check it out.

And clocking in with just shy of 40 posts, the Carnival of the Capitalists is now up, over at Business & Technology Reinvention blog. I like how cleanly and simply it's laid out, with brief summaries of each submission. Well done!

Blogger Vihar Sheth has a thought-provoking post at his Green Rising blog. He discusses a survey of cultures, from all over the worls, and how each one looks at individualism, isolation, long term orientation, and other cultural attributes. Interesting.

A Tale of Two Choices

eHealthinsurance is out with its annual report of what premiums are in different cities and they�re still comparing the price of rotten month old apples with sweet juicy, juicy mangoes. And amazingly enough they�re different.

Lies, damn lies & statistics.

Choose your poison.

Of course in practical terms this report is useless. I�m a great example in that I applied for two identical policies from different carriers on eHealthinsurance�both quotes about $100 a month for a $2500 deductible plan. But when the underwriting was done, one was still $100 a month and the other wouldn�t take me at all and suggested I went in the guaranteed issue pool at $400 a month for a $4000 deductible. So quoting price without knowing what the individuals concerned need to go through to get the insurance and therefore knowing the actual price is useless.

This has been said before but it definitely bears repeating.

Rates mean nothing unless you know what the final offer will be.

Insurance Dispatch

This week's column is up at The Medical Blog Network. We revisit the issue of network discounts (or lack thereof) for non-covered services.

All or Nothing...

Justin, host of HealthFlux, has a terrific post up about how folks' perception of how health insurance should work is changing (or should be changing). He takes to task those who ask if "they can't have the best without having to pay for the best why settle for anything less?"

Read the whole thing.

Heavy Debt

Most Kansas farm families have health insurance but carry heavy loads of medical debt anyway.

Farming is no longer a small business. With the amount of capital tied up in land & machinery, a wise farmer will purchase insurance to protect those assets.

The study found about 95 percent of Kansas farmers buy medical insurance -- but most of those get only minimal or catastrophic health coverage. That leaves them bearing the costs of most illnesses or accidents themselves

95% is much higher than the general population. They are to be commended. And cat cover is what everyone should buy. We don't have copay's for oil changes, tires or gasoline for our automobile. Why do we think we need copays for routine items like doctor visits?

Ninety percent reported owing money to their doctors, with nearly that percentage owing money to hospitals. About two-thirds had outstanding prescription costs, while slightly over half had bills with dentists.

Most people think hospital bills will wreck you financially. Fact is, about 40% of claim dollars paid by carriers is for hospital bills. That leaves another 60% for outpatient care such as doctors & Rx costs.

Total debts varied widely, with the median about $2,500.

When did $2500 become classified as a "heavy debt"??

Life Insurance Companies vs. Banks

Financial Post, John Turley-Ewart, 26 August 2006Canada's insurance industry is in moral decline.Financially it is sound. Policies are being honoured as usual, dividends are being paid, and insurance stocks are having a good run. But the business ethics on offer from some of the industry's guiding lights give pause. The battle by insurance companies to keep other financial institutions from

Cavalcade #7 - Submissions Due

Submissions for next week's C of R (which will be at Making Cents blog) are due by this coming Monday, Aug 28. You can enter your submissions:

� via email

� at Blog Carnival

or

� at Ferdy's

Thanks!

TD Bank Q3 2006 Earnings

Tanis Toohey / Toronto StarBMO Capital Markets, 25 August 2006Details & AnalysisTD Bank reported cash EPS of $1.17, compared to $1.12 in the previous quarter and $0.70 in the same quarter of last year. These earnings included two one-time items - the hedging impact of AcG-13 and a tax charge to account for the reduction in net future tax assets from the lower income tax rate. Together, these

For the Children...

Now this is interesting: according to a new study conducted by the Robert Wood Johnson Foundation, a number of state-sponsored initiatives seem to be working. These plans, which offer basic (and sometimes better) health plans to uninsured kids, have had limited success, because (frankly) so few folks take advantage of them.

Apprently, though, that's changing: "State programs that provide health coverage for poor children are working, with the number of uninsured youngsters declining by more than 20 percent between 1997 and 2004," numbers based on the aforementioned RWJF study. The study also determined that there are about 8 million children still without insurance (although I have some problems with this number, I'll stipulate it for the purposes of this post. Of these, some 5.5 million are eligible for one of these state-backed plans.

I'm a bit bothered about one item in particular: the study claims that while there's a 31% increase in the number of 'kinder' enrolled in public programs, there's also a 5% decline in children being insured through private coverage. So parents, who should be paying for this, are foisting off their progeny onto us taxpayers. I'm not all that pleased with this particular development. As it stands, more kids are being covered (which is a good thing), but more of them are being covered on your nickel (which may not be).

Large Popcorn Please, Hold the Butter

A factory worker who claimed his lungs were ruined as a result of mixing flavoring oils used in microwave popcorn was awarded $20 million by a jury Monday.

Eric Peoples was the first of 30 former workers at the Gilster-Mary Lee Corp. plant in Jasper to have his suit heard against the two makers of the butter flavoring. Following a morning of closing arguments, the jury deliberated for a little more than three hours before returning the verdict.

People cried and hugged his wife, Cassandra, as the jury ruled against International Flavors and Fragrances Inc. and its subsidiary Bush Boake Allen Inc., the manufacturers of the flavoring. They were ordered to pay $18 million to Eric Peoples and $2 million to his wife for compensatory personal injury damages.

Outlook High for RBC as Peers Storm Out of Gate

The Globe and Mail, Allan Robinson, 25 August 2006Third-quarter bank earnings have been stronger than expected so far, and it will take stunning results for Royal Bank of Canada just to keep pace.Even more problematic for shareholders in RBC, which holds top spot among Canada's biggest corporations and accounts for nearly 5 per cent of the total market capitalization for the S&P/TSX, is that the

Scammers Strike On-Line Brokers

The Globe and Mail, Sinclair Stewart, 25 August 2006A number of Canadian investors cleaned out their on-line brokerage accounts this week and then dumped the proceeds into a group of obscure penny stocks, including one based in Vancouver. There was only one problem: They had no clue they were actually trading.Regulators and police are now scrambling to untangle a complex financial scam that has

'True Yield' Stands Out at 8 Firms: UBS

Wayne Cheveldayoff, 24 August 2006A buying opportunity may have emerged for dividend-paying stocks, says UBS Securities Canada Inc. strategist George Vasic.Rising bond yields have recently restrained their performance but even with this dampening effect, stocks with rising dividends have easily outperformed the market over the past 10 years and have a much better reward-to-risk ratio than the

A Wonky Review

This week's Health Wonk Review is up, hosted by The Lucidicus Project. Boasting an even dozen entries, our host has each one with a summary and context. Bravo!

A few weeks ago, our own Bob Vineyard offered an obit on California's PacAdvantage Program. In this week's HWR, Jason Shafrin (writing at the Health Care Economist) picks up the torch.

Effects Vary in Dividend Tax Change

The Toronto Star, James Daw, 24 August 2004Say you had about $30,600 to invest in dividend-paying company shares.The right selection of stocks would now pay about $1,000 the first year, but could pay $1,900 within five years.Such a growth in income is not guaranteed. But it would occur if dividends continued to rise at the pace of a couple of dozen companies that Thomas Connolly of Kingston has

Stay Tuned

Pennsylvania's first hearing on whether to require everyone to have health insurance hinted at the potential for a fight ahead.

The debate will involve financially powerful players such as insurers, health care providers and businesses, whose interests often are at odds. The issue surfaced after Massachusetts passed a law earlier this year requiring residents to have insurance.

The National Federation of Independent Businesses also offered an unenthusiastic view of the Massachusetts plan.

Such a plan could add $150 million to the cost of doing business for Pennsylvania companies and worsen an already bad business climate, said Mark Richards, assistant state director for the federation.

Smart HSA

Patients covered by UnitedHealth Group will soon receive patient identification cards that they can use as debit cards for medical expenses and that doctors can use to access patients' personal health information electronically

The new cards, which will carry the MasterCard logo, can be swiped like a credit card at a doctors' office or other certified health provider. But in addition to providing payment, the cards can be used to confirm eligibility for services and provide access to personal health information at the point of care. The cards should be broadly available early in 2007.

UnitedHealth is working on a feature that uses the cards to interface with its electronic systems and determine precisely how much the patient owes at the time of the doctor visit. Besides collecting copayments and other patient-billable expenses easily, doctors' offices can use the cards to submit and process insurance claims more quickly, says UnitedHealth.

Analysts Shrug at BMO Results

Financial Post, Duncan Mavin, 24 August 2006Canada's big bank analysts are not an easy bunch to impress, as Bank of Montreal found out this week.BMO delivered record-busting third-quarter net income on Tuesday, up 30% from a year ago to $710-million. The bank beat the street with cash earnings per share of $1.30, more than 9% above consensus estimates of $1.20 per share.Yet the analysts hardly

Banks & Currency Conversion in Retirement Accounts

The Globe and Mail, Rob Carrick, 24 August 2006It looks as if the financial industry has gone too far with some of the costs and fees charged to customers for converting money in and out of foreign currencies.Customers are mad as hell, and they're not going to take it any more.A $100-million class-action lawsuit recently filed in Ontario targets Bank of Montreal, BMO Nesbitt Burns Inc. and BMO

Here's the Beef...

According to a new survey, more than half of the employers who responded have enhanced employee benefits in the past 6 months. Of those, almost 9 out of 10 added some kind (or kinds) of health-related benefits. About 40% increased paid vacation days, and about a third added some kind of flex-hour or job-sharing deal.

Some two-thirds of those surveyed indicated that they had added some kind of financial incentive, such as increased pension matches, as well.

Called "pragmatic benefits," the emphasis is on offering things that are more lifestyle related, not just "show me the money."

Interesting.

BMO Q3 2006 Earnings

Toronto StarScotia Capital, 23 August 2006Strong Third Quarter Earnings� Bank of Montreal (BMO) reported Q3/06 cash operating earnings of $1.30 per share, better than expected due to a strong 7 basis point improvement in the Canadian Retail net interest margin, continued strong trading revenue and a decline in loan loss provisions to an extremely low level of 11 basis points.� Operating ROE

Paying More, Getting Less

Years ago, when cigarettes were advertised on TV there was a commercial for a certain brand that asked the question.

�Are you smoking more and enjoying it less?�

That phrase can be re-worked and applied to health insurance as well.

Are you paying MORE for health insurance and getting less?

If you are like most people, the answer is yes.

Family of 4, mid 30�s in greater Atlanta. They want a plan with all the bells & whistles with low copays & low deductible.

OK, so how about $25 copays and a $500 deductible?

Outstanding! Just what they want.

Premium is $751 per month.

So what are they getting for their $751?

Unlimited doc visits at $25 each. Generic drugs covered with a $15 copay. Rx deductible of $100 for brand name only, then $30 or $60 copay. Other charges subject to a $500 deductible then 80% of the next $10,000. Out of pocket on a major claim is $2500 + copays.

All this for only $751 per month.

What happens when you eliminate the copays and discount the professional services? You raise the deductible to $2500 but pay 100% after the deductible. Your out of pocket on a major claim is now $2500. That�s it. Not $2500 PLUS copays, just $2500.

And the new premium is . . . $290 per month.

That is a savings of $461 per month. Over $5500 per year.

In most households that will pay for a lot of doctor visits & meds.

Nothing wrong with the copay plan as long as you understand you are paying more but getting less for your dollar.

RBC CM on the Financial Sector

RBC Capital Markets, 22 August 2006BanksOur positive call on the bank sector reflects our view that sector valuation became attractive as a result of the sector price weakness through to June combined with strength in the bond market, particularly in the last week. Our target P/E of 13.1x 2007E cash EPS assumes a 4.25% Canadian 10-year bond yield (the 10-year closed at 4.18% Monday). According to

Grand Rounds...

The 100th edition of Grand Rounds may be found at Dr Charles' blog. This is an especially rich version, with some 55 entries, all categorized and summarized.

Check it out.

Loose Ends...

As in, tying 'em up:

� First, in What a Tangled Web, we learned that United HealthCare had been a little too vigorous in its compensation to Columbus (OH) insurance agent Kevin Grady. At the time, UHC got a stiff slap on the wrist, and we wondered what might become of Mr G.

Well, now we know. Thanks to alert IB reader Pete D, we learn that:

"Ohio Department of Insurance Director Ann Womer Benjamin has suspended the insurance licenses of Columbus insurance broker Kevin P. Grady for a minimum of three years pending the payment of a $25,000 civil penalty and $137,000 restitution to Columbus Public Schools. Grady's agency, Grady Enterprises, Inc., has also been assessed a civil penalty of $25,000 and ordered to repay the schools jointly with Grady."

� Following up on Part 2 of our Tangled Web series, which again involved those frisky folks at UHC, this time with a fellow named Fritz Neuhart, who allegedly double-dipped his carrier and his clients:

"The department notified Fritz Neuhart and his company, Joseph James & Associates, this week that they could lose their insurance licenses."

The extra twist here is that the case has widened to include another carrier, Medical Mutual of Ohio. Of course, we're all innocent until proven guilty. We'll continue to monitor both these cases.

� Finally, in case you've forgotten about our own ground-breaking series on HSA's and network discounts, I received an answer (of sorts) from another carrier yesterday. To their credit, Anthem did get back to me, confirming that it follows industry practice: their network contracts allow providers to determine whether or not to discount non-covered services.

Good day!

Bank of Communications Profit Rises 22%

Bloomberg, Luo Jun and Michele Batchelor, 22 August 2006Bank of Communications Ltd., China's fifth-largest lender, said profit rose 22 percent in the second- quarter as the economy's growth spurred demand for consumer loans and asset managementservices.Net income increased to 3.13 billion yuan ($393 million), or 0.07 yuan per share, in the three months to June 30, from 2.57 billion yuan, or 0.06

Foolish Pride

Recently I posted about a rather large claim involving a family friend. An auto accident had injured a young girl and her bills at that time were $680,000 and counting.

Today I talked to a man who was looking for coverage to replace his current plan. He now has a $10,000 deductible with another $5,000 out of pocket on a major claim. His premium is increasing, unjustly in his mind, and he feels he can do better.

He also feels he does not need an agent to advise him.

He told me he found a plan that was about $40 per month less expensive than his current plan, and had a $2500 deductible.

For some reason, this did not seem odd.

He wanted to know if I could offer anything better.

Of course I can.

I can offer a policy that will cover more than is covered now, and considerably more than the plan he thinks he wants, for somewhere in between his current premium and the one he has found.

On a $680,000 claim his current plan will pay all but $15,000.

The plan he has found will stop after paying $100,000.

And he thinks he doesn't need an agent . . .

BS 840

If passed, and signed by the governor, SB840 will provide comprehensive, high quality health insurance for all Californians.

The bill provides nothing. The taxpayers provide the coverage. BS 840 will actually LOWER the standard of care for residents.

Incredibly, nearly 7 million Californians lack health insurance during all or part of the year. Roughly 70 percent of these people are employed but do not receive employer-based insurance.

Apparently there is no expectation of personal responsibilty in California. If your employer, or the taxpayer, does not provide it then you will have to do without.

In California, with the sixth-largest economy in the world, it is past time to offer our citizens what so many other nations offer, universal single payer coverage for all Californians.

If/when BS 840 passes, expect fewer providers to accept the universal insurance. Fewer providers means more rationing and higher prices for those who choose not to use the taxpayer funded plans.

It's Money Time!

With over 50 posts, the folks at Carnival of Personal Finance. Done in the style of Dr Suess, it's well-organized AND fun!

I've never understood the value of AD&D (Accidental Death and Dismemberment) plans. So I was pleased to see that I'm not alone: Five Cent Nickel expresses the same doubts.

TD Newcrest Preview of BMO Q3 2006 Earnings

TD Newcrest, 21 August 2006Bank of Montreal will be reporting its Q3/06 results on Tuesday, August 22, 2006. We are expecting EPS of $1.20, just below consensus of $1.21, and below $1.24 earned last quarter.ImpactNeutral. �Stuck in the Mud� is how we described BMO�s Q2/06 results. We remain uncertain of BMO�s strategic direction and expect 2007 earnings growth to be modest relative to its

Banks to Deliver Solid Q3 Profits Despite Capital Markets Slowdown

The Globe and Mail, Sinclair Stewart, 21 August 2006Canada's major banks are expected to flirt with record profitability when they begin reporting their third-quarter results this week, signalling a potential rally for a sector that has endured a bruising slide.On average, the country's bank stocks lost 5 per cent of their value between May and July, and as a group, they remain about 10 per cent

Insurance Dispatch

This week's column is up. We discuss how so-called medical discount cards can be a boon, or a big bad bust.

Unfortunately, unscrupulous salesfolk and anxious consumers make for a bad combination.

Taxes . . .

Nearly 850,000 Hoosiers are uninsured, and Indiana administrators are trying to find a solution.

One visited Terre Haute today looking for a remedy to the state`s health insurance crisis.

Jeanne Labrecque, a representative from the Indiana Family and Social Services Administration, came to Ivy Tech for a town hall meeting.

The administration is looking to find a solution to the complicated and growing problem of health insurance.

One way they might do that is by raising cigarette taxes.

Tax smokers to pay for health insurance for those who are without. Does one have to PROVE they are unable to buy health insurance before they will qualify (assuming this passes)? Will just anyone be able to drop coverage and pick up the free coverage courtesy of the smokers in the state?

Novel idea.

So where does it go from here?

Taxing expensive foreign cars so poor people can have a nicer car too.

How about 4 star restaurants so the fast food crowd can have a nice meal too?

Tax the birth control products so old guys can have free Viagra.

Can't wait.

Better Late...

I'm baaaack!

And so's the Cavalcade of Risk, graciously hosted by Tim of My Money Forest. Please stop by and check it out.

RBC CM Preview of TD Bank Q3 2006 Earnings

RBC Capital Markets, 18 August 2006TD is scheduled to report third quarter earnings on August 24. Our cash EPS estimate of $1.17 is 1� above the Thomson First Call mean estimate, indicating a 13% lift year over year, and up 7% sequentially. TD�s core businesses remain healthy but the bank should also benefit from a full quarter of revenue inclusion from its recent Hudons United acquisition and

RBC CM Preview of RBC Q3 2006 Earnings

RBC Capital Markets, 18 August 2006Cash EPS Estimated Up 16% YoY. Royal Bank reports Q3/06 earnings on August 25. Our cash EPS estimate of $0.86 is 2� above the Thomson First Call mean estimate of $0.84. Our estimate reflects growth rates of 16% year over year and -1% sequentially.Retail Bank to Shine this Quarter. Last quarter, RY posted $0.86 cash ($0.85 normalized) for ~21% growth YoY, beating

Moody's Boosts Rating on RBC Centura

Triangle Business Journal, Lee Weisbecker, 18 August 2006Saying it expects further gains in profitability, New York-Based Moody's Investors Service has raised its rating on RBC Centura Bank to stable from negative.The rating covers both the bank's $623 million in subordinated debt and $12 billion in deposits.In a July 27 note, Gregory W. Bauer, Moody's managing director for financial institutions

Banks Set to Report Earnings

Globe and Mail, Allan Robinson, 18 August 2006Canadian banks are the bedrock of the S&P/TSX composite index in terms of earnings, and if analysts' third-quarter profit forecasts are correct, investors are in for some good news.Over the next two weeks, the domestic banks take centre stage, with four of the largest expected to report an average year-over-year profit increase of about 11.25 per cent

RBC CM Preview of CIBC Q3 2006 Earnings

RBC Capital Markets, 18 August 2006Q3/06 Preview � Consensus Looks High - Costs Under Control, But Watching Revenue and CreditOur Cash EPS Estimate 5% Below Consensus. CIBC reports Q3/06 earnings on August 31. Our normalized cash EPS estimate of $1.51 is 8� or 5% below the Thomson First Call mean estimate of $1.59 and results in a year-over-year decline of 10% (down 2% sequentially). CIBC is

RBC CM Preview of National Bank Q3 2006 Earnings

RBC Capital Markets, 18 August 2006EventNational Bank reports Q3/06 earnings on August 31.Investment Opinion� Looking for Above-Consensus Q3/06. Our cash EPS estimate of $1.25 is 1� above the Thomson First Call mean estimate of $1.24, and indicated up 6% YoY (2% QoQ).� Strong Earnings Outlook and Quality. Last quarter, we upgraded our outlook for National based on (i) evidence of an extended

Bank Profits Seen Up; Domestic Margins Key

Reuters, Lynne Olver, 18 August 2006Thanks to a still-sunny economic picture, the big six Canadian banks are seen reporting per-share earnings growth of 10 percent to 12 percent when their parade of third-quarter results starts next week.Growth in loans and near-perfect credit quality should result in solid reports for the latest May-July period, analysts said, although cooling real estate

Moody's Changes Outlook on TD Bank to Positive from Stable

Investment Executive, 16 August 2006 Moody�s Investors Service has changed the rating outlook on Toronto-Dominion Bank, and its subsidiaries, to positive from stable.At the same time, it affirmed the bank�s ratings. TD is rated �Aa3� for deposits and �B� for bank financial strength.In a related action, Moody�s changed the outlook to positive from stable on TD Banknorth, Inc.�s deposit and debt

Cost of Delay

There is a cost to everything. Sometimes prices are stable. Other times prices rise. Once in a while prices drop.

The premium charged for health insurance, particularly individual health insurance, is not the only factor affecting affordability.

More often than not, the one factor that most fail to account for is their health.

Your health can change from one day to the next.

Here are a few examples.

Don was considering leaving his job and striking out on his own. He started looking at plans but figured he had time and could afford to wait.

Don left his job last month. He is still trying to decide. Last week he visited the doctor for a routine physical. Turns out his cholestorol reading was 350.

He was immediately put on cholesterol lowering meds.

Now when Don applies for health insurance his premium will be 20 - 45% higher or he may find that the carrier will refuse to cover any treatment for high cholesterol and any related illness.

The cost of waiting as it turns out is quite high.

Karen started looking in January. She was on COBRA which was due to run out in August. No rush. She could have made a change in January and saved about $100 per month over her COBRA coverage. She could even have a carrier that will cover her cholesterol treatment.

Karen chose to wait.

In April she had surgery to remove a kidney stone. All is fine now.

Except her search for coverage has changed dramatically.

The carrier who would accept her before without restriction on cholesterol treatment now refuses to offer a policy.

Every other carrier she will consider will not cover kidney stones for a minimum of 2 years.

She does have a conversion option. The premium for conversion is $900 per month.

The plan she wanted in January was $250 per month.

Her kidney stone operation was $15,000. Now when she takes a policy she will have to hope she doesn't have additional problems with kidney stones.

Karen's decision to wait could cost her plenty.

RBC CM Preview of BMO Q3 2006 Earnings

RBC Capital Markets, 15 August 2006Q3/06 Preview � New Management, New Directions?Bank of Montreal reports earnings on August 22. Our cash EPS estimate of $1.19 is 2� below the Thomson First Call mean estimate of $1.21. Last quarter the bank reported $1.25 cash EPS to beat our $1.17 estimate and $1.21 consensus estimate, but revenue quality was skewed to cyclical items. Relative to our estimate,

RBC CM Preview of Scotiabank Q3 2006 Earnings

RBC Capital Markets, 15 August 2006Q3/06 Preview - Expected In-Line, But with Improved QualityBank of Nova Scotia reports third quarter earnings on August 29. We are looking for cash EPS of $0.87, which is 1� above the Thomson First Call mean estimate of $0.86. This implies a growth rate of 13% year over year and 1% quarter over quarter.We are factoring revenue growth at 8% year over year,

SB 840, Health Care for All

Sounds great doesn't it? Unrestricted health care for all.

There is a movement going on in several state, most notably the states that lean to the left, to provider some form of universal health care. One of the plans at the forefront is California's SB 840.

Here are some excerpts . . .

Not just junk insurance, but full care for all.

Health Security with full benefits for LIFE

Now who wouldn't want that? FULL care (no out of pocket), for ALL residents (including illegals), for life (from cradle to grave).

Free choice of any primary care doctor

Wow! Any doc. No networks. Docs are allowed to charge whatever they want and 840 will pay for it.

Who says there is no free lunch?

All care needed including hospital, emergency, prescription drugs, dental, vision & more.

A Socialist's dream. Free everything.

No copays or deductibles for at least 2 years.

Then what happens after 2 years?

Efficient administration cuts costs 25%

No one says HOW they will cut admin costs by that much, but even if they do, what happens once the admin savings have been overtaken by medical inflation? About 2 years out any admin savings is a wash and you are back to the same issues you have now.

I thought the Massachusetts plan was silly. This puts them to shame.

Late addition . . .

It seems the Gentle Cricket has also been keeping an eye on this legislation. I invite you to read his take on SB 840 here.

Scotiabank Plans to Expand Latin America Transfer Business

Bloomberg, 15 August 2006Bank of Nova Scotia, Canada's third-largest bank, may expand its wire transfer business in Latin America to compete with lenders such as Wells Fargo & Co., a bank executive said.The Toronto-based bank, known as Scotiabank, is targeting countries including Mexico, Peru and the Dominican Republic, said Peter Cardinal, executive vice president for Latin America.``We will

Hancock Seeks Clearance to Bid for Carter Holt Assets

Bloomberg, 14 August 2006Hancock Timber Resource Group, the world's biggest forest investment fund, sought regulatory approval to bid for assets of Carter Holt Harvey Ltd., New Zealand's largest forestry company.The Boston-based fund owns $5.2 billion of forests, including trees it bought in New Zealand from the former Fletcher Challenge estates in 2004. It asked New Zealand's Commerce Commission

EMTALA and You

Don�t have health insurance? EMTALA is a law you need to know.

The Emergency Medical Treatment and Active Labor Act is a statute which governs when and how a patient may be (1) refused treatment or (2) transferred from one hospital to another when he is in an unstable medical condition.

EMTALA applies only to "participating hospitals" -- i.e., to hospitals which have entered into "provider agreements" under which they will accept payment from the Department of Health and Human Services, Centers for Medicare and Medicaid Services (CMS) under the Medicare program for services provided to beneficiaries of that program. In practical terms, this means that it applies to virtually all hospitals in the U.S., with the exception of the Shriners' Hospital for Crippled Children and many military hospitals. Its provisions apply to all patients, and not just to Medicare patients.

The avowed purpose of the statute is to prevent hospitals from rejecting patients, refusing to treat them, or transferring them to "charity hospitals" or "county hospitals" because they are unable to pay or are covered under the Medicare or Medicaid programs.

EMTALA is primarily but not exclusively a non-discrimination statute. One would cover most of its purpose and effect by characterizing it as providing that no patient who presents with an emergency medical condition and who is unable to pay may be treated differently than patients who are covered by health insurance.

Any patient who "comes to the emergency department" requesting "examination or treatment for a medical condition" must be provided with "an appropriate medical screening examination" to determine if he is suffering from an "emergency medical condition". If he is, then the hospital is obligated to either provide him with treatment until he is stable or to transfer him to another hospital in conformance with the statute's directives.

Note the use of the words �emergency medical condition� and �treatment until he is stable�. If a true emergency situation does not exist, the provider is not obligated to provide treatment. Once the patient is stabilized there is no further obligation to treat the patient.

So when is the patient stabilized?

� (for emergency medical conditions) that no material deterioration of the patient's condition is likely to result from the transfer or is likely to occur during the transfer;
� (for patients in active labor) the infant and the placenta have been delivered.

And what if the patient lacks the ability to pay? Can the hospital (or doctor) ask if the patient has the ability to pay?

Yes, but timing is everything. The statute does not prohibit an inquiry into availability of medical insurance; it does provide that neither examination nor treatment may be delayed to make the inquiry.

Some knowledgeable commentators have suggested that no discussion of any payment issues should take place before the medical screening examination and any needed stabilizing treatment are provided. Others have found no reason for an outright prohibition on asking about insurance coverage while the patient is waiting for the examination so long as it is made clear that financial considerations will not affect decisions regarding examination and treatment. This is obviously an area with some dangers, and one benefit of absolute rules is that no one has to wonder where the line may be drawn. CMS has even recommended that hospital personnel not answer any questions initiated by the patient, apparently on the theory that some patients may be dissuaded from staying if they learn that they will be financially responsible for the treatment, even if they are assured that they will be seen without consideration of payment issues.


I find this disturbing. �Some patients may be dissuaded from staying if the learn they will be financially responsible for treatment�.

What kind of people feel that medical treatment is, or should be, free?

So what happens if a patient feels they have been discharged early, or have not been treated fairly?

A hospital which negligently violates the statute may be subject to a civil money penalty (i.e., a fine, but without criminal implications) of up to $50,000 per violation. If the hospital has fewer than 100 beds, the maximum penalty is $25,000 per violation.

A physician who is responsible for providing an examination or treatment, including but not limited to an on-call physician, may be liable for a civil money penalty for signing the medical certificate if he knew or should have known that the benefits of transfer did not in fact outweigh the risks of transfer, or if he misrepresents the patient's condition or the hospital's obligations under the statute.

A physician who is on call and who fails or refuses to appear after being called by an E.R. physician (or other physician) may be subject to a penalty under the statute, or may subject his hospital to a penalty. The wording of this section [1395dd(d)(1)(C)] is so garbled as to be virtually indecipherable

In other words, they can be sued.

So to summarize . . .

If you have a medical emergency, you have a right to treatment regardless of your ability to pay. Once your condition has been stabilized you can be discharged or transferred to another facility for care. If you feel the hospital or staff has acted inappropriately in discharging you, they may be sued.

What a country.

Your Money Monday

Franky, blogging at the eponymously-named Frank the Financially Savvy Atheist, hosts this week's Carnival of Personal Finance. There are over 20 posts, a half dozen of which he highlighted as stand-outs.

My favorite was this thoughtful item at Tore O's Money Matador. Ever wondered if beggars *can* be choosers?

Barry Moltz hosts this week's Carnival of the Capitalists. With over 30 posts to organize, he's done a great job.

One of my favorite bumper stickers is "The Paperless Office is as likely as the Paperless Bathroom," so I really liked this post from Pocket Change.

PacAdvantage Closing

Pacific Health Advantage, or PacAdvantage, said Friday that it will stop its pooled health insurance coverage to 6,200 small businesses in California at the end of the year because of the withdrawal of health plan providers from the program.

The problem was not the withdrawal of PROVIDERS, but rather CARRIERS from the program. Blue Cross of California did not find the program to be economically feasible and withdrew.

Created as the Health Insurance Plan of California by the state in 1992 and taken over in 1998 by Pacific Business Group on Health, PacAdvantage is an independent, non-profit purchasing pool for small businesses with between 2 and 50 employees. It was intended to make health insurance more available and affordable and to ensure a choice of health plans for employees of small businesses.

In other words, this was an association plan that has been hailed as a solution to rising health care costs. Association plans are also known as MEWA�s.

At its peak, in 2002, its membership stood at 9,000 employers and 147,000 employees. But participation from insurers was voluntary, and under the weight of increasing health care costs and other unfavorable market pressures, they bailed out one after the other, Grgurina said

Current enrollment now stands at 116,000 covered participants; more than a 20% drop from the high enrollment.

Several things were inherently wrong and doomed the plan almost from the first.

The plan targeted small employers with 2 � 50 employees.

The plan was guaranteed issue. ANYONE can be covered, regardless of prior health history.

These two items alone are not enough to sink the plan but the next item appears to be a major flaw that pulled down the plan.

Each employee was allowed to pick their own plan. This is a key component that led to adverse selection.

When claims continue to rise faster than premiums, more carriers pull out of the plan. The more premiums rise, the more adverse selection there is which puts even more pressure on loss ratio�s. When there are not enough bodies & premium to support the risk the plan implodes.

Insurance Dispatch

This week's column is up, over at The Medical Blog Network.

Did you know that you can pay for Long Term Care insurance (LTCi) out of an HSA? It�s true, and it might be a good idea. Read all about it.

Here We Go Again . . .

Democratic state lawmakers are embracing the one solution to spiraling health care costs that Gov. Arnold Schwarzenegger says he has ruled out: eliminating private insurance plans in favor of a single-payer system that allows the state government to buy health services for everyone

Why is this a solution? No one has EVER proved a single payor system works long run. Savings generated, if any, are only temporary. One year maximum

And the state government can�t buy anyone anything. They don�t have their own money to pay for it.

The measure establishes a system that, in theory, would be funded by payroll taxes on businesses of 8 percent and individual income taxes of 3 percent. Those taxes would replace the premiums that individuals and businesses now pay to insurance companies

See? Taxes replace premiums. Taxes are not government money, just ours sent through a different food chain.

Schwarzenegger has said he will release his proposal for making health care more accessible to Californians in January, if he is re-elected in the November general election. He supports streamlining private insurance coverage through the use of new technology and other approaches that make private insurance coverage more affordable

Streamlining coverage through the use of technology. Sounds like a Star Trek approach. Beam me up Scottie.

Advocates of SB 840 say their plan will save consumers and businesses about $8 billion a year because the government will be able to negotiate lower prices with health care providers

Lower fees to providers mean fewer providers willing to accept the lower fees. Add to that increased demand created by �free� health insurance and the result is more rationing of health care.

Lower fees to providers is a one year fix. After that you are back to the same issues you have now.

"The governor just doesn't get it,"

Neither do you.

Where is the Victim?

Advocates for affordable healthcare said yesterday that a key piece of the state's new health insurance law asks far too little of businesses, requiring them to provide employees only bare-bones coverage to avoid a $295 per-worker fee for companies offering no insurance plan

Personally, I fail to see why government should be allowed to force a business to provide ANY coverage. This is just another form of tax increase.

The rule's supporters said lawmakers who reached the deal in the spring shared a modest goal: ending an unfair system that allowed companies offering no insurance to get a free ride by relying on more generous employers to help foot the bill for uninsured medical expenses. The Democrat-led Legislature that adopted the nation's most ambitious healthcare restructuring didn't embrace the broader goal of requiring employers to meet minimum coverage levels, supporters said.

What is �unfair� about free enterprise? Employers who pay a generous wage, and provide health insurance & retirement benefits are able to attract a higher class of employee and will experience lower turnover. If a business owner CHOOSES to pay less than their competitors, and CHOOSES to bypass employee benefits, then who suffers?

The customers of the lower paying business usually get the lower price goods they want. The employees have a job they are willing to accept at a compensation level that is suitable to their needs & qualifications.

WHO is hurt in this situation?

(Potentially) Light Blogging Ahead...

The Prof family will be on vacation next week, and I have little hope of Mrs Prof allowing me access to any computers.

My able (and prolific) co-blogger Bob Vineyard is on his own here; please be nice ;-)

Cavalcade of Risk: Reminder

Next week's C of R will be at My Money Forest. Tim's looking for a few good posts, so please consider helping him out.

You can submit your posts (or even someone else's):

� via email

� at Blog Carnival

or

� at Ferdy's

And don't forget: hosting a Cavalcade is fun and easy, and can be a nice "traffic spike" (the good kind). Interested? Just let us know.

Scooped by a Bean-Counter!

Joe Kristan is all over the Corporate Owned Life Insurance (COLI) topic, with the latest news and helpful tips. A must-read.

BMO CM on Sun Life Financial

BMO Capital Markets, 11 August 2006Year to date, Sun Life shares generated the worst total returns among the large cap financial services companies, down 10.6%. The margin is quite wide as the closest comparisons are GWO, down 6.5%, and TD, down 3.9%. SLF currently trades at 1.6x bvps and 12.2x and 11.1x �06E and �07E EPS, respectively, cheaper than the lifeco and bank group averages. The yield

BMO CM Preview of Cdn Banks Q3 2006 Earnings

BMO Capital Markets, 10 August 2006IntroductionWe expect Canadian banks to report one of their best operating results ever for the third quarter ending July 31, 2006. The story should be continued strength in the retail businesses, offsetting somewhat weaker market-related businesses.Loan growth and stable spreads are the basis for our optimism in retail banking. Industrywide data suggests loan

Scotia Capital Preview of Cdn Banks Q3 2006 Earnings

Scotia Capital, 10 August 2006Banks Begin Reporting August 22� Banks begin reporting third quarter earnings with Bank of Montreal (BMO) on August 22, followed by Toronto-Dominion Bank (TD) on August 24, Royal Bank (RY) on August 25, Bank of Nova Scotia (BNS) on August 29, National Bank (NA) and Canadian Imperial Bank (CM) on August 31, Laurentian Bank (LB) on September 6, and Canadian Western

Enron Investors' Fraud Trial Postponed to 2007

Bloomberg, 1 August 2006Enron Corp. investors seeking to recover $40 billion in losses tied to the energy trader's collapse won a delay in the trial of their fraud claims against the company's former bankers until April 2007.William Lerach, the lead investor lawyer, had urged U.S. District Judge Melinda Harmon to postpone the Oct. 16 trial to allow investors time to combine claims against

Health Wonk Review

Matthew Holt hosts this week's edition of the Health Wonk Review. Matt's put 16 posts into a useful index.

With Cuba's Fearless Leader in whatever straits he's in, Jared at the Lucidicus Project has a report on that island paradise's health system.

Manulife Sells Canaccord Shares

Investment Executive, 10 August 2006Canaccord Capital Inc. says The Manufacturers Life Insurance Co., a significant shareholder of the company, yesterday sold 2 million Canaccord common shares through the facilities of the Toronto Stock Exchange.The share block was crossed at a price of $18.10 per share. As a result, Manulife now holds 2,943,369 common shares in the company, representing 6.15% of

Doing the Laundry...

Sometimes, when I just can�t help it, I sell life insurance. My clientele generally runs to the middle class, although I do count as clients one state representative, a Public Utilities commissioner, and an engineer.

But, because I am in the �financial services� industry, I am apparently subject to new rules put in place by the Financial Crimes Enforcement Network (FinCEN, not to be confused with CENTCOM).

HIPAA, Sarbanes-Oxley, and FinCen; insurance carriers are now required to set up �anti-money laundering� processes, and to file �Suspicious Activity Reports.� Thankfully, we peons (literally: insurance agents) are absolved from actually establishing and maintaining our own such programs.

Still, we are required to be familiar with our carriers� plans, and to undergo special training to learn about them, and to be aware of the scope of �the problem.� Although I�m not really convinced that Abdul is going to walk in with a cool 10 G�s, looking for a �hot life policy,� I�m subject to this requirement, and recently spent part of an afternoon fulfilling it.

This is my story:

I find CBT (Computer Based Training) to be both a pain in the, um, PC and pretty cool. I miss the interactivity of classroom learning, but it�s also fun to go at my own pace, and make snarky comments while absorbing the material. The purpose of this online program was to raise my awareness of �anti-money laundering rules� [ed: shouldn�t that be anti �money-laundering?�], in order to be more adept at spotting such activities.

Actually, I had never thought about how the life insurance business could be used for this sort of thing. Since cash value policies (e.g. Whole or Universal life, annuities, etc) all have onerous cash surrender penalties in the early years, it seemed to me that they would be poor choices for quickly moving large sums of cash.

Turns out, though, that I just wasn�t devious enough in my thinking: one of the consumer-friendly features of such policies is the �free look� provision, which is �where the action is.� In this scenario, a prospective customer comes in, and plunks down $10,000 for a single premium annuity. I submit that, along with the completed application, to the insurer. The policy is issued, and the client says �um, y�know what, never mind, I really don�t want this after all.� I send the policy back to the carrier, and a few weeks later, a refund check drawn on the carrier�s account comes back to the �prospect.� He�s just laundered the loot.

Granted, I probably would have had some questions of my own in this case, but it illustrates how even innocuous vehicles like annuities can be used for illicit purposes. And the course gave numerous other examples, as well, which also surprised me. For my part, I�m now more aware of clues and tell-tale signs, and cognizant of the potential for abuse.

All in all, I�d have to say: 45 minutes well-spent.

Price Targets for Life Insurance Companies

Great West Lifeco Inc.� BMO Capital Markets maintains "market perform," 12-month target price is $32.00� Desjardins Securities upgrades to "buy,"� GMP Securities maintains "buy," 12-month target price is $34.50� National Bank Financial maintains "sector perform," 12-month target price is $31.50� RBC Capital Markets maintains "sector perform," 12-month target price is $32.00� Scotia Capital

RBC Buys Flag Financial Corp

Financial Post, Duncan Mavin, 10 August 2006Royal Bank of Canada jumped back into growth mode in the United States yesterday with its purchase of Atlanta-based Flag Financial Corp. for US$456-million.The deal is the first acquisition since 2003 by RBC's U.S. retail banking subsidiary, North Carolina-based RBC Centura. The deal appears to mark the end of a couple of years of stalemate at RBC

BMO Sued Over Currency Conversion in Retirement Plans

Financial Post, Duncan Mavin, 10 August 2006Bank of Montreal is at the centre of a multi-million-dollar class-action lawsuit alleging the bank charged unfair and undisclosed fees to customers with retirement savings plan accounts, it was revealed yesterday.In a statement of claim filed with the Ontario Superior Court of Justice, it is alleged that BMO charges the fees for transactions that are

Sun Life's Prieur Resigns

Scotia Capital, 10 August 2006� A neutral event our opinion. A relatively "non-external face" at Sun Life, Prieur, who is 55, had spent the last twelve months in Hong Kong, assuming leadership of the company's Asian unit (in what was believed to be a "stop-gap" role) following the August 10, 2005 retirement of Doug Henck, who previously was President of Sun Life Financial, Asia. We believe the

NYSE Fines RBC for Proxy Handling

Bloomberg, 9 August 2006Royal Bank of Canada agreed to pay $80,000 to the New York Stock Exchange to settle allegations that it mishandled proxies, making it the fifth brokerage faulted this year for breaking rules governing votes on corporate actions.RBC Capital Markets, a unit of Canada's biggest bank, agreed to the fine without admitting or denying wrongdoing, the NYSE said in a statement

$680,000 and Counting . . .

The last week of May. Kristin (a friend of the family, not her real name) was on her way home from school. It had been raining, the roads were wet but did not appear dangerous.

The phone rang. Your daughter has been in an accident. You need to come to the hospital.

The car was damaged beyond recognition. Kristin had to be removed by with the aid of the jaws of life. She was stabilized and transported to the hospital.

Mother arrived at the hospital and was told the news. Kristin had been severely injured. In addition to lacerations she had 2 fractured cervical vertebrae and would be admitted to surgery to allow for placement of a halo brace.

Until the swelling goes down, there is no way to know exactly how much paralysis, if any, is involved. Kristin had just turned 21. She was not what you would call a problem child, but she did lack direction and focus. She was even considering dropping out of school.

Over the next few weeks Kristin�s condition improved. Her cut�s and bruises healed and eventually she progressed to the point where she could sit up in bed. Eventually she would have to learn to walk again, feed & dress herself . . . daily routines most of us take for granted.

It has now been just over 2 months since Kristin�s accident. She still wears a brace but she is adjusting to a new normal.

The bills are still coming in, but not as frequently or as large as they were initially. As of now the total is $680,000 . . . most of which was paid by insurance.

Had this happened after Kristin dropped out of school the outcome might have been different, especially without health insurance.

She would still be 21. She would still be relearning a new routine for daily life. The difference would be the $680,000 debt hanging over her head.

Kiwi Insurance

More people are taking out health insurance with the cut to elective surgery waiting lists in public hospitals one of the reasons.

Umbrella group, Health Funds Association's executive director, Claire Austin says there has been a 1% increase in membership of health insurance companies, or about 13,500 people joining up in the last quarter.

She says the private sector is now funding half of common elective surgeries, such as hip replacements and cataract operations.

Austin says those seeking information on health insurance through the association often blame the cuts to waiting lists.

Major New Zealand health insurance company, Southern Cross Healthcare, is reporting its biggest leap in membership in five years as a result of the waiting list cuts. The insurer says its membership has increased by 7,500 to a total of 808,000 in the last year.

Southern Cross group chief executive Ian McPherson says the waiting lists issue is a significant reason for the increase. He says the number of people without insurance paying cash for operations in private hospitals has also increased.

Free health care + private insurance. Who would have thought??

Battle Royal

Locally, the Blues just settled a dispute with Piedmont hospital and their docs over network pricing. What this meant was, for a little over a month you could continue to use the same docs & hospital as before, but your out of pocket was going to be more.

In some cases, a lot more.

Two years ago in Atlanta we had the same kind of showdown. Once again Blue was the carrier but Tenet hospitals were on the other side of the bargaining table. That dispute lasted about 2 months.

Now this.

Thousands of Denver-area patients may need to find a new hospital because of a contracting quarrel between a giant insurer and a hospital system.
HealthOne, parent company of seven metro-area hospitals and 10 surgery centers, is warring with United Healthcare over reimbursement rates.

On Tuesday, the company sent a letter to its 3,500 affiliated doctors, warning that its contract with United may end on Aug. 31. From then on, HealthOne facilities would be "out of network" for United Healthcare's nearly 1 million Colorado members.

"We are far apart on many issues," the letter said, "and we will not continue as participating providers unless we agree on acceptable terms."

The HealthOne contract affects all of United's business: its HMOs, PPOs and PacifiCare Secure Horizon's business.

Likewise HealthOne, a joint venture between nonprofit HealthOne Alliance and for-profit HCA Inc., gets 9 percent of its inpatient volume from United. Some 3,200 of its own employees have health insurance through United Healthcare.

The pair have been negotiating for months

Every time this happens, patients get squeezed. If it hasn't happened to you yet, just wait.

Never Argue with a Bipolar

Phone rings

Me: Hello.

Bipolar: I am looking for health insurance and I was given your name & number.

Me: Thanks for calling. I need to get some information such as date of birth, height & weight as well as any meds you take.

Bipolar: I take (2 psychotropic meds, 4 BP meds and one HRT).

Comment to self, this is going to be a short conversation . . .

Me: Do you have coverage now?

Bipolar: Yes, I have coverage through my employer but I can�t afford it.

Me: How much does it cost?

Bipolar: I don�t know, it comes out of my check.

Second comment to self; this is going to be even shorter than I thought.

Me: If you don�t know how much it costs, then how do you know it costs too much?

Bipolar: Because I can�t afford to go to the doctor. The copays are too high. I want something with better coverage but at a lower price.

Now I figure I might as well have some fun since I am already in to this.

Me: So how much can you afford to pay in monthly premium?

Bipolar: How can I know how much it costs? That is why I called you. Don�t you know?

OK, time to pull the plug on this one.

Me: You really need to keep your current plan.

Bipolar: But I can�t afford it.

Me: As I was saying, you need to keep your current plan. No carrier will take you as a bipolar.

Bipolar: I should have known better than to call you. Insurance companies are all alike.

She hangs up.

Two minutes later the phone rings.

Me: Hello.

Bipolar: I am looking for health insurance and I was given your name & number.

I guess being bipolar is not her only issue. Seems like a touch of short term memory lapse as well . . .

This is a true story. I can�t make this stuff up.

Small Business Storm Warning

According to SurePayroll, a lot of small employers may drop their group health plans in the next year or so:

According to a survey commissioned by the online payroll service provider, a little over half of the nation's small businesses currently offer some kind of group health benefit, and a little over half of those pay the lion's share of the premiums (okay, they really don't, but that's another post.

One quibble: they don't define a "small business;" could be 2 people, could be 100.

Something else that showed up: of those small employers who don't currently offer a plan, more than half indicate that they may offer one next year.

NatWest 3 May Testify Against RBC

The Toronto Star, Tara Perkins, 8 August 2006Three British bankers who are in Houston awaiting trial on criminal charges related to the Enron Corp. scandal have been subpoenaed to give depositions in a separate, class-action civil suit against the Royal Bank of Canada.The so called NatWest Three have been ordered to appear at the Houston Deposition Centre on Sept. 28 in connection with a suit

Scotiabank, the World's Oldest Gold Dealer

Financial Post, Boyd Erman, 8 August 2006At the top of Bank of Nova Scotia's red skyscraper in Toronto, a group of salespeople and traders from the bank's ScotiaMocatta precious-metals unit sit in front of blinking terminals buying and selling gold, silver, platinum and palladium all around the world.Seventy floors below, an underground vault holds stacks of bullion in safekeeping for

Cash Please

In the age of $3+ per gallon gasoline you can�t fill your tank without first paying for the gas. Now the same approach could be coming to an ER near you.

HCA Inc., which owns JFK and St. Lucie Medical, is enacting the policy at several of its hospitals nationwide. The punitive measure reflects the near-chronic clogging of emergency rooms, often with patients whose minor scrapes, coughs and aches could be treated - cheaper - at a doctor's office or clinic. The worst result of the pay-first policy would be a seriously ill patient being turned away because he did not appear sick enough and could not pay the $140 upfront fee. Some doctors are worried they might become targets for malpractice lawsuits. And apprehension about the policy could deter patients with genuine emergencies.

The ER crisis includes crowding, long waits and patients being turned away, especially during the winter tourist season, but it also reflects a shortage of nurses, hand surgeons, neurosurgeons and other specialists - a problem Palm Beach County hospital executives, doctors and health-care specialists have been working to solve for more than two years. Clinics such as Martin County's Volunteers in Medicine site help, as would federal attention to immigration, requiring employers to provide some level of health benefit for the workers they hire. But the crowding reflects a problem that pay-first policies will not solve: lack of insurance

Is HSBC the Go-To Bank for Global Investors?

By Stephen D. Simpson, CFA (TMFWildWeasel), 7 August 2006You want a big bank? Very few are bigger than London's HSBC. You want diversified? This bank's profits come pretty equally from Europe, North America, and Asia, and there is growing balance in its split between personal, commercial, and investment banking. You want a good dividend? This bank has that, too.This has been a decent year for

Health Care for Everyone!

San Francisco is poised to offer health care coverage to 82,000 residents, but the plan only fiddles around the edges of a failing system. What we need is a federally funded, comprehensive program of vouchers that provides basic health coverage for everyone.

Federally funded.

No such thing.

The correct term is TAXPAYER funded.

Ideally, every person in America would have personal health care coverage from childhood, through school and a career, and into retirement. Coverage would no longer depend on employment or pre-existing conditions. Basic health care would be free, and additions to standard coverage would be available for a price

The operative word here is �ideally�.

It's going to be expensive to provide basic health care to everyone, but it makes sense, not just as a matter of social justice but because we can prevent more-expensive care later.

It IS true that many maladies are preventable but there is little to show that there is a SIGNIFICANT increase on the overall health of those who have ready access to routine care.

People who have insurance still are obese which can lead to heart disease, diabetes, increased risk of stroke and a host of medical problems.

Doctors, hospitals and pharmaceutical companies would have to give up their distorted system of payments in which economic incentives reward those who do the most testing, prescribe the most drugs and overtreat patients who are in fee-for-service plans now

Many times more testing is done as a defensive practice. Fail to order enough tests and the treatment may not be covered by insurance. Even worse, you may be subject to litigation for malpractice if your testing fails to rule out every conceivable illness.

Doc�s make nothing by prescribing two pills when one (or none) will work. However, with direct to consumer advertising if the doc fails to write a script, or fails to prescribe the medication the patient asked for, that patient may simply shop for a new doc that will give them what they want . . . whether they need it or not.

If doctors are ROUTINELY �over-treating� their patients, I have yet to see anything to support such an accusation. Perhaps the author of this article has access to information I have not seen.

Government should set a basic health care benefit required in every private health plan. It should also compel the health insurance industry to be accountable and reliable

More government intrusion.

Every time the government passes a new mandate the cost of health insurance goes up not down.

And government must finance the system

Here we go again.

The government doesn�t have their own money.

But let's be honest: There would probably need to be some increase in taxes.

Ahh, now we see the truth. Higher taxes.

How much higher?

No one knows.

Every health plan would be free to offer upgrades beyond the government-paid basic plan

OK, I jumped the gun a bit. Now he is back to referring to it as a government paid plan. Seems he forgot the part about increasing taxes.

Must be a short term memory lapse. Wonder if that is covered as a �basic� benefit or one of those additional benefits paid for by the folks who have the funds to �buy up� to the better plan.

Oops! This is sounding like a class system where the �rich� have access to better health care.

Maybe the author can remedy that as well.

Where There�s a Will...

When working with life insurance clients, I usually (although not always, to my shame) ask if they have a valid, current will. Such an instrument is important for a number of reasons, not the least of which is to ensure that one�s final wishes are known, and (hopefully) carried out.

Wills generally cover the disposition of property, caring for any children, and charitable bequests. But what about one�s legacy?

Hunh?

We�ve all heard about �living wills,� but what about �ethical wills?� One of my absolute favorite books is �Ender�s Game,� by Orson Scott Card. In it, he introduces a person called a �Speaker for the Dead.� It is this person�s job to forthrightly report on the life of the dearly beloved, warts and all.

Absent such a person (it is science fiction, after all), an ethical will is a means for one to sit down with one�s estate planner and talk about life experiences, what one�s learned (and what one wishes had been learned), family history, personal stories (funny and sad), and the like. And, of course, how one wishes assets to be �divvied up.�

�In a recent Harris Interactive poll of 1,200 Americans aged 40 to 59, 77% of those surveyed said that knowing exactly their parent�s values was very important, while only 10% said it was important that they inherited financial assets from their parents. � (ibid)

Hopefully, we�ve learned what our parents lived, and have, in turn, helped our own children adopt an appropriate value system. But I found this idea to be quite interesting: to not just assume that they know, but to ensure it.

Food for thought.

Monday Money...

With almost 40 posts, this week's Carnival of Personal Finance is a blockbuster. Compiled by host J.D. at Get Rich Slowly, each post has its own headline and recap.

My better half hates it when I don't leave 20% as a tip, even if the service doesn't warrant it. Plus, I always tip on the balance before tax, which also drives her nuts. Which is why I appreciated this post from David at The Good Human blog.

And a big Tip o'the Hat to David Hunter, proprietior of The Business of America, for filling in (at the last minute!) as host of this week's Carnival of the Capitalists. David aggregated over 40 posts, and even had time to include a brief description with each one. Kudos!

And if you're in the mood for something exotic to wash down your meal, check out this suggestion from AvantNews. Yummy!