Vanguard Health rebounds on Medicaid contract

NASHVILLE, Tenn. -- Shares of hospital operator Vanguard Health Systems took back some ground Wednesday after the company said it had secured a three-year contract to manage Medicaid patients in Arizona. It had said last month that Arizona wasn't renewing a bigger Medicaid contract.

THE SPARK: Vanguard, which owns hospitals and also manages health care benefits through subsidies including Phoenix Health Plan, announced late Tuesday that the contract covers patients in Maricopa county, which includes Phoenix. Medicaid is the state-run health plan for low-income Americans.

THE BIG PICTURE: The company had said late last month that its Phoenix Health Plan had lost its contract with the Arizona Medicaid system. Tuesday's announcement will help the company retain approximately 98,300 members, or about half of the 186,000 Medicaid beneficiaries covered under its previous contract.

In announcing the new agreement, Vanguard said it would not file a protest with Arizona over losing the previous Medicaid contract.

THE ANALYSIS: Susquehanna Financial Group analyst Chris Rigg said in a note the company is "making the best out of a bad situation." He still lowered his fiscal year 2014 earnings estimate to $1.12 from $1.25.

Analysts polled by FactSet expect profit of 90 cents per share for the year ending in June 2014.

Cantor Fitzgerald analyst Joseph France noted that Vanguard's hospital business accounts for about 90 percent of its earnings, and that managed care has not been a strong growth area for the company.

"Vanguard's Arizona HMO has actually been a disappointing performer over the past year as the state reduced benefits and raised eligibility requirements," France said in a note to investors.

SHARE ACTION: Shares of Vanguard Health Systems Inc. rose $1.25, or 8.6 percent, to $15.81 in afternoon trading Tuesday. The Nashville, Tenn.-based company's stock had fallen 12 percent after announcing the loss of the previous contract and before Tuesday's announcement. The stock reached a 52-week high of $17.74 the week before the March announcement of the lost contract.

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European Economy Expected To Contract Even More In 2013

The European economy, beset by high unemployment and austerity measures aimed at reducing debts and deficits, will contract again in 2013, according to the continent’s official economic body. That would make 2013 the second consecutive year, and third in the past five, in which the 17-nation Eurozone’s economy will have shrunk, adding to its already record-high unemployment rate and further complicating the deficit reduction efforts it has pursued without fail since the end of the global recession.

Another contraction would especially hit the countries that have already been hurt the most by the recession and resulting austerity, the European Commission said. The Wall Street Journal reports:

The European Commission, the EU’s executive arm, forecasts a 0.3% contraction for 2013 and sees falling spending by businesses, consumers and national governments pushing euro-zone unemployment to a new high. Mass joblessness is expected to increase in the countries hardest hit by the crisis, with the average unemployment rate expected to reach 27% in Greece, 26.9% in Spain and 17.3% in Portugal.

Slow growth, and in some cases the lack of growth at all, has already hampered deficit reduction efforts, causing Spain, Greece, and France to miss deficit targets. French president Francois Hollande announced this week that he would not pursue further austerity to hit this year’s deficit target. The Eurozone officially fell back into recession in November.

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Fox News Isn’t Renewing Sarah Palin’s Contract

At the New York Times, cable news chronicler Brian Stelter has the story that Sarah Palin’s original contract with Fox News will not be renewed:

Yes, Ms. Palin’s contract with Fox News has ended, and no, it is not being renewed. A Fox spokeswoman confirmed Friday that Fox had parted ways with the former Alaska governor and Republican vice presidential nominee, effectively reducing her exposure to the channel’s millions of loyal viewers.

It was unclear whether the parting was Ms. Palin’s choice. Bill Shine, an executive vice president at Fox, said in a statement, “We have thoroughly enjoyed our association with Governor Palin. We wish her the best in her future endeavors.”

As of last week, Ms. Palin remained in negotiations with Fox News about a new contract. Her original contract with the network started in January 2010 and ended this month.

This makes a lot of sense. As I’ve written before, Fox News’ schtick has always been to hire intensely polarizing figures, from Dr. Keith Ablow, who spends most of his time making outrageous statements about gay and transgender people, to former Los Angeles detective Mark Fuhrman who, tragically and hilariously, comments on criminal justice issues, despite having plead no contest to charges he perjured himself in the O.J. Simpson case. Palin would seem to be in that tradition: since she stepped on the national stage at the Republican National Convention in 2008, Palin’s primary talent has been for incendiary rhetoric.

But Palin’s not rooted in any particular extreme viewpoint. Her policy perspectives have always been too squishy for her to represent much in the way of an particular constituency or any cause other than herself and her own fans. She was never particularly a ratings hit on Fox—a special planned around her turned out not to be the sort of draw the network hoped for. And unlike Ablow and his ilk, Palin was never even particularly successful at tweaking liberals in her appearance on the network, ginning up the kind of publicity that could have made her a worthwhile investment even if she wasn’t particularly popular with the network’s core audience.

The Palin family as a whole seems to hope for careers in show business, but this is only the latest in a string of failures for them. The TLC show Sarah Palin’s Alaska saw declining ratings and wasn’t renewed for a second season. Bristol Palin’s Lifetime show was yanked from the network for lower viewership, but not before landing $354,348 in tax subsidies from the state of Alaska. Todd Palin was reduced to appearing as one of many celebrities on NBC’s military reality show Stars Earned Stripes.

Maybe now that Fox News has cut ties with Palin, the rest of the television industry will follow suit. Sarah Palin long ago proved she had no real aptitude for governance when she quit her job as governor as Alaska. Her time on Fox proved she didn’t have much spark as a source of news or opinion. And the rest of her family’s efforts suggest that as entertainment, the Palins have nothing to offer us but diminishing returns.

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