Medicaid health plans are often criticized for making too much money at the expense of tax payers and the indigent population, measured in billions of dollars.  However, real profitability goes far beyond the simple measure of profit dollars.  This post explores the profitability of Medicaid health plans from a corporate finance point of view, how the levels have changed over the years, and how they compare in today’s corporate context.   Beyond Profit Dollars: Evaluating Profitability on Operating Margin The public often focus on absolute profit dollars as a measure …

Early this month, the Trump administration withdrew the proposed Drug Rebate “Safe Harbor” Rule. Under the proposed rule, rebates currently paid by pharmaceutical companies to pharmacy benefit managers (PBMs) and payers would instead be passed directly to consumers.  The Congressional Budget Office (CBO) estimated that the rule would cost the federal government $177 billion over 10 years. According to news sources, the administration decided to withdraw the rule due to concerns over cost, as well as potential windfall profits to the pharmaceutical industry. This outcome is unfortunate, as the current …

“Wall Street Perspective” is an op-ed column which provides economic perspectives on issues facing the U.S. health care system. This column serves as a public forum for general discussion of health system reform and invites our readers to share their opinions and thoughts, particularly on topics of healthcare economics and corporate finance.   “They always say time changes things, but you actually have to change them yourself.” – Andy Warhol I still vividly remember the night when the idea of actively affecting change in healthcare first struck me. November 8th, 2016, election night. …

The Source Blog is launching a new op-ed column, Wall Street Perspective, headlined by The Source Health Policy Research Fellow, Gary Ko. As a former Healthcare Equity Research Analyst for one of the largest Mutual Fund Companies in the world, Gary provides a unique economic perspective on issues facing the U.S. health care system. We hope this column will facilitate a general discussion of health system reform and invite our readers to share their opinions and questions, particularly on topics of healthcare economics and corporate finance. Check out the inaugural post …