The 10 Dumbest Things in Health Care This Year

5. UnitedHealth's Wake-Up Call

UnitedHealth must be dreaming. Otherwise, with so many alarms sounding around it, the company would surely wake up.

This summer, the Minnesota-based health insurance giant announced the resignations of two key executives on the very same day. UnitedHealth portrayed the departures as unrelated and, despite the company's deteriorating performance, assured investors that they should not be concerned.

To be fair, one of those executives left to become CEO in a familiar industry. But the other, Lois Quam, was an 18-year veteran who built UnitedHealth's Medicare empire -- popularly known as "Ovations" -- and seemed qualified to run the entire show. Instead, despite a recent promotion, she decided to leave the company to pursue a new career securing financing for alternative energy companies at Piper Jaffray.

Outside of UnitedHealth, at least, this didn't make perfect sense.

"Quam is leaving the business she helped build into the largest government services operation in the country -- and which is poised for continued strong growth in the future -- to take a job in an unrelated industry," Credit Suisse analyst Gregory Nersessian noted. "Frankly, we don't get it."

But then, maybe UnitedHealth's Medicare business isn't as healthy as it seems. After misfiring badly during the government bidding process, analysts estimate that UnitedHealth could soon lose more than half-a-million customers who were automatically enrolled in its Medicare Part D program last year.

Clearly thinking about its investors, of course, UnitedHealth tried to break the news gently.

"UNH is clever at crafting the titles of its press releases," CRT analyst Sheryl Skolnick observed. "This one -- 'UnitedHealthcare Medicare Drug Plans Continue to Offer Stable Costs and Broad List of Covered Drugs in 2008' -- would not indicate to the reader that the company was actually reporting bad news.

"How about a straightforward title that doesn't beat around the bush, as in 'UNH Could Lose up to 650,000 Auto-Enrollees as It Bids above the Benchmark to Maintain Margins?'"

That's okay. UnitedHealth says this will have a "minimal impact" on its overall earnings, although Skolnick fears a bit worse.

Anyone sense a looming nightmare?

Dumb-O-Meter Score: 79. "Where have you gone, Lois Quam?" Nersessian moaned this fall. "Ovations turns its lonely eyes to you."

Look for the remaining five dumbest health care moves on Monday.