You can only grow by acquisition for so long. Your work force becomes so engrossed in integration that they can never participate in digital transformation or innovation. Centene continues to follow this old school model due to old school leader-MFN. Now, a new set of direct reports to MFN, are tasked with making old school Centene into a technology company that also does healthcare. To accomplish this, they are s—ing the life out of the Annual Operating Plan dollars. The result? UHG, Humana and Anthem are improving their ability to acquire and retain customers and stealing members from Centene. Centene was fat year over year and their stock price is reinforcing this failure. Amazon Health ad Amazon RX will be ramping up to steal more as Centene opened their doors to teaching AWS and Amazon how to be a healthcare payer. Centene will continue their decline year over year as Amazon/AWS/Humana/UHG/Anthem acquire their customers and retain them. Centene will never, and I mean never be able to keep up with AWS and Amazon who are already technology companies now doing healthcare. Sell your stock if you own any.
8 replies (most recent on top)
Ahh, how I’d love to see that headline on my screen and know that karma caught up with MFN and the rest of the pr^cks running Centene.
Anonymous, keep it civil. The CUC accounting scandal was 1998, resolved fairly quickly from a financial viewpoint (the two leaders saw considerable Federal prison time), and not responsible for the eventual breakup of Cendant in 2006. I was at a division while this was happening, into 2001 and in the travel industry till 2005. CUC's problems didn't affect us. There were things going on that weren't kosher but weren't public. Frankly, the whole conglomerate didn't hang together well. No one on the Street liked Henry Silverman either. Over promised, under-delivered on the 'synergies'. So the most profitable thing was to spin off, sell off, and retain Avis Budget Group.
There are some parallels with Centene, just one possible scenario of many.
You're full of sh–. Centene is nothing like Cendant. Cendant break up was due to massive accounting fraud involving jail time, hence the hatred of the company. It was split apart after the crimes were exposed.
Centene's possible fate is reminiscent of another company in a completely different industry with a similar name–Cendant. Cendant owned everything from multiple hotels to the #2 in car rental to a thriving real estate and mortgage business. Yet when things should have been palmiest, before 2008's recession, the stock never reflected the value of the company parts. Investors and Wall Street had a lack of faith to full dislike for the CEO. Eventually, Cendant was spun off and sold off in chunks, kind of like an old car for parts. This may be happening here.
I will be carefully watching the stock. Hope that some value is recovered then off it goes.
WOW, well said in terms of where the industry is headed. I feel like a fellow analyst just replied. Nice write up response to my original post. Poor guy that replied first is in denial of Centene's future. Obviously an IT resource.
If anyone at Centene notices, companies like Oscar and Clover Health are tech-enabled from start to finish from connecting their members to self-monitor their health to their administrative processes like provider credentialing and ongoing compliance. They buy systems from third parties for the latter so they minimize the number of employees doing this work. Leave aside Clover's problems with the DOJ, that is the model all the Big 10 are up against. Centene is playing catchup because they focused on acquiring health plans, not building stickiness with members. Now they're trying to convert into a two-part company. Timing was late (UHG got there nearly a decade ago, CVS Aetna 5-5 years ago) And the fact is that being a family of acquired brand name plans hasn't helped.
What kind of magical fantasy is this? You don't know what the f— you're talking about.
Don't listen to this guy.