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Friday, June 18, 2010

Insurance Companies Invest in Fast Food

Interesting article in American Journal of Public Health (click here for an abstract of the article) describing insurance company investments in fast food companies. The surprise is that this even makes the news. First, is anyone still under the impression that health insurance companies care if you live longer or are healthy? They are basically just claims processing outfits. In fact, the higher health costs and therefore health insurance costs, the more they grow their own organizations, since they pay themselves as a percentage of premium.

Second, I experienced myself as a member of the Board of Trustees and a member of the Fund Management Committee at a health-related nonprofit that most companies are not watching carefully what their financial advisors are investing their money in. Unless an external group makes a fuss about it, even the top leadership of the company may not realize what these investments consist of. Investment and fund management committees tend to be run by finance folks and treasurers, and for these people getting the best return is the most important thing. The meetings are dominated by concern about the financial state of the organization. In the ones I was involve in, they are not paying much attention to the mission of the organization as they make their investments, beyond their basic thought that they can do better with their mission if they make money on their investments.

So this did not come as a surprise to me. An analysis of the investments of endowment at our universities, and investments of endowment by other health related organizations such as health care foundations and medical provider organizations would show exactly the same thing, I am sure.

Of course our government is also ignoring our health in the companies it subsidizes...

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