The 10 Dumbest Things in Health Care This Year

4. Omnicare's Blame Game

Omnicare (OCR Quote) has become an expert at the blame game.

Every quarter, the Kentucky-based institutional pharmacy misses Wall Street estimates and somehow holds UnitedHealth (UNH Quote) responsible.

Certainly, Omnicare's results have been devastated by cut-rate payments from the giant health insurer. However, this is nothing new -- as is evidenced by the two companies' ongoing court battle -- so it's hard to understand the surprise factor here.

Still, the surprises kept surfacing this year. And Omnicare kept acting as if it somehow had everything under control.

Quarter after quarter, the company pointed to the same old remedy -- known as "The Omnicare Full Potential Plan" -- as the cure for all its ills.

"Clearly 2007 is a year of rebuilding and repositioning. But longer term, we believe the fundamentals underpinning our business remain intact and our strategy appropriate," CEO Joel Gemunder vowed when releasing the company's first quarterly disappointment of the year. "The Omnicare Full Potential Plan exemplifies this strategy."

Every time investors thought that Omnicare would finally hit that potential, they saw their hopes shattered instead. They weathered another big scare this fall, when Omnicare released its third-quarter update on none other than Halloween Day.

"Trick or treat!" Bear Stearns analyst Jason Gurda piped. "No candy from OCR."

Then came some even spookier news. In early November, UnitedHealth revealed that it had received a subpoena seeking information about Omnicare's Medicare-related business. Based on UnitedHealth's disclosure, the government suspects that Omnicare could be inappropriately steering Medicare patients toward certain prescription drug plans.

To be sure, Omnicare could probably get better rates from other insurers than it does from UnitedHealth. But the government apparently frowns on that sort of manipulation.

Thus, it seems, Omnicare still needs some cooperation from UnitedHealth to meet its "full potential" once again.

Dumb-O-Meter Score: 85. "For the last several quarters, OCR shares have run up ahead of the company's earnings release only to get knocked back down when the company misses the quarter and reduces guidance," Gurda observed this Halloween. Incredibly, "it happened again this morning."