I know what you’re thinking but it’s not that. Late last year
I went back and forth with Bob at Health Policy and Marketplace Review on why, given the unlikely prospects for much growth in Medicare reimbursement and the Democrats’ win in November, the stock price of health plans servicing Medicare–and making a packet off it–had not collapsed. No need to rehearse that argument here, other than to note that life was not likely to be getting better for the stock prices of the companies still big into that sector (United, Humana, etc)
Then I went to a fun meeting in Nashville this May which had lots of industry scuttlebutt and featured several experts on reinsurance. Everyone there was talking about one Florida health plan, specializing in Medicare and Medicaid and its very dubious offshore transactions with its captive re-insurer.
Now did I put 2 and 3 together? After all, another company with a fast rising stock price got a little too attached to to some interesting off-shore financial shenanigans, and became the biggest corporate fraud story of all time not so long ago.
So any rational stock operator would have polished off his donuts and gone short. But instead I ignored it. Now of course the news is all the rage with Wellcare stock down in the 30s from its highs in the 120s and the shorts have made a rational killing (although admittedly the stock is up a little after some speculators think the news isn’t as bad as all that).
But if the stories about weird dealings with the re-insurer was gossip for industry insiders earlier this summer, what did the board members who sold stock this summer know?
You won’t find out from reading the 3rd comment in this thread from one such Wellcare board member on THCB, although you will see quite ridiculous insinuations of plagiarism aimed at a completely uninvolved third party.
Note: I have attempted to verify the correct identification of the poster by
direct communication (including an offer to fix the name and grammar,
but have heard nothing back). I have, however, had one trusted source confirm a conversation with Prof Herzlinger in which she apparently made statements entirely consistent with this comment…so you be the judge. But it’s interesting that nothing about what actually happened at Wellcare is mentioned in the comment, nor why Wellcare was worthy of being an innovative plan that deserved the compliments she gave it when she joined the board. If Prof Herzlinger or any other Wellcare insiders want to tell us more, the floor here at THCB is all theirs.