Corporate Governance

What do the latest financial crisis and healthcare litigation have in common?  The big picture is the same:  It?s about disclosure.  What you don?t know can hurt you.  In several suits against health insurance companies, plaintiffs on behalf of classes of health plan subscribers and out-of-network healthcare providers charge that the defendant health insurers have employed questionable statistical models which misstate ?usual, reasonable and customary? fees charged by out-of-network providers (doctors, dentists and podiatrists), artificially reducing reimbursements.  Further, the plaintiffs allege that the insurers withhold disclosure about these methodologies from those who seek to challenge the underpayments outside of litigation.

As for the financial crisis, the lack of disclosure by major players during the events leading up to the near-collapse of the financial system is probably better known, regardless of whether anybody understands what happened.  In that regard, we commend to you Michael Lewis? recent The Big Short (W.W. Norton & Co. 2010).  In particular, a footnote on page 77 gives the deserving reader a revealing answer to a complicated question.  Part of Lewis? answer, not referring to allegations against Goldman Sachs relating to John Paulson: A certain investment bank ?was in the position of selling bonds to its customers created by its own traders, so they might bet against them.?  Several reviews of this book appear, among other websites, at http://www.librarything.com/work/8488263/reviews/.