No One Left to Bleed?

Five years of "expanding margins" for shareholders appear to be coming to a halt. It seems that the mangaed-care industry, which miraculously has flourished even as health care costs have skyrocketed, can't come up with enough new enrollees to keep passing out fat dividends to shareholders. One of the bellwethers, according to the New York Times: Minnetonka-based UnitedHealth.

UnitedHealth, the second-largest managed-care company, reported that it had added fewer members in the first quarter than it forecast. Some investors paid more attention to that than to the 41 percent profit increase UnitedHealth reported for the quarter.

UnitedHealth was showing the effects of a national trend. Although 175 million Americans are covered by employer-sponsored health insurance, further declines in manufacturing jobs and a spotty economic recovery have braked increases in enrollment. And by the latest count, the number of people without health insurance has risen to 45 million.

Lest you fret over what this means for CEO Bill McGuire (who is, after all, earning $124.8 million this year), there's some good news: Congress's passage of Medicare drug coverage is expected to open up a whole new revenue stream.