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Comment by avn2109 | Hacker News Reader

FWIW, 6% is clearly "Hollywood accounting," just look at the stock chart. No business with six percent margins has stock performance like UNH.

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"Hollywood accounting" only works because you're transferring the profits of one enterprise (ie. the movie itself) to something else (ie. the production/distribution company). Unitedhealth Group is a publicly traded company. Where are they funneling the profits to?

Subsidiaries and affiliates. For example:

https://www.ftc.gov/news-events/news/press-releases/2024/09/...

> The FTC’s administrative complaint alleges that CVS Health’s Caremark, Cigna’s ESI, and United Health Group’s Optum, and their respective GPOs—Zinc Health Services, Ascent Health Services, and Emisar Pharma Services—have abused their economic power by rigging pharmaceutical supply chain competition in their favor, forcing patients to pay more for life-saving medication. According to the complaint, these PBMs, known as the Big Three, together administer about 80% of all prescriptions in the United States.

Wouldn't that still end up on the parent company's financial statements? What are PBMs' margins compared to insurance companies?

Have you seen Carvana's stock?

It just means that their costs have correlated with revenues, which is to be expected in certain industries.

The better comparison would be with other insurance carriers.

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