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News from Cambridge Health Alliance
April 15, 2010
Health, Life Insurers Hold Nearly $2 Billion in
Fast Food Stocks
Harvard researchers say insurers put profits over
health
Cambridge, MA…Just weeks after the passage of a health bill
that will dramatically increase the number of Americans covered
by private health insurers, a new study from researchers at Cambridge
Health Alliance and Harvard Medical School details the extent to
which life and health insurance companies are major investors in
the fast food industry - to the tune of nearly $2 billion.
Although fast food can be consumed responsibly, research has shown
that it is linked to obesity and cardiovascular disease, two leading
causes of death, and contributes to the poor health of children.
The evidence is so compelling that more than 200,000 fast food and
other chain restaurants will soon be required to include calorie
counts on their menus, including those at drive-thrus.
A new article on insurance company holdings, published online by
the American Journal of Public Health, shows that U.S., Canadian,
and European-based insurance firms hold at least $1.88 billion of
investments in fast food companies.
"These data raise questions about the opening of vast new
markets for private insurers at public expense, as is poised to
happen throughout the United States as a result of the recent health
care overhaul," said lead author Arun Mohan, MD, MBA, a resident
physician at Cambridge Health Alliance and Harvard Medical School.
Among the largest owners of fast food stock are Prudential Financial,
Northwestern Mutual, Massachusetts Mutual Life Insurance Company,
and ING.
U.S.-based Northwestern Mutual and Massachusetts Mutual Life Insurance
Company both offer life insurance as well as disability and long-term
care insurance. Northwestern Mutual owns $422.2 million of fast
food stock, with $318.1 million of McDonald's. Mass Mutual owns
$366.5 million of fast food stock, including $267.2 in McDonald's.
Holland-based ING, an investment firm that also offers life and
disability insurance, has total fast food holdings of $406.1 million,
including $12.3 million in Jack in the Box, $311 million in McDonald's,
and $82.1 million in Yum! Brands (owner of Pizza Hut, KFC, and Taco
Bell) stock.
New Jersey-based Prudential Financial Inc. sells life insurance
and long-term disability coverage. With total fast food holdings
of $355.5 million, Prudential Financial owns $197.2 of stock in
McDonald's and has significant stakes in Burger King, Jack in the
Box, and Yum! Brands.
The researchers also itemized the fast food holdings of London-based
Prudential Plc, U.K.-based Standard Life, U.S.-based New York Life,
Scotland-based Guardian Life, and Canada-based companies Manulife
and Sun Life.
"Our data illustrate the extent to which the insurance industry
seeks to turn a profit above all else," said J. Wesley Boyd,
MD, PhD, attending psychiatrist at Cambridge Health Alliance, assistant
clinical professor of psychiatry at Harvard Medical School, and
senior author of the study. "Safeguarding people's health and
well-being take a back seat to making money."
Mohan, Boyd, and co-authors Drs. Danny McCormick, Steffie Woolhandler,
and David Himmelstein, all from Cambridge Health Alliance and Harvard
Medical School, culled their data from Icarus, a proprietary database
of industrial, banking, and insurance companies. Icarus draws upon
Securities and Exchange Commission filings and news reports from
providers like Dow Jones and Reuters. In addition, the authors obtained
market capitalization data from Yahoo! Finance. Several of these
same researchers previously published data about the extent to which
the insurance industry is invested in tobacco.
"Our research highlights the tension between profit maximization
and the public good faced by countries in expanding the role of
private health insurers," said Dr. Boyd. "If insurers
are to play a greater part in the health care delivery system, they
ought to be held to a higher standard of corporate responsibility."
"Life and Health Insurance Industry Investments in Fast Food."
Arun V. Mohan, MD, MBA; Danny McCormick, MD, MPH; Steffie Woolhandler,
MD, MPH; David U. Himmelstein, MD; and J. Wesley Boyd, MD, PhD.
American Journal of Public Health published online ahead
of print, April 15, 2010.
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