Tom Hinton of ACC Assesses Most Profitable Companies

by Tom Hinton

In reviewing the results of the Fortune 500 rankings and profit numbers from the second half of 2006, it might surprise you that many of the most profitable companies are not household names. In fact, none of the top ten companies that posted the biggest percentage increases in profits from 2005 to 2006 are US companies. What’s even more surprising, three of the five companies that had the highest percentage gain in profits during the second half of 2006, are in the food services business.

While the ten most profitable companies in 2006 remain household names (ExxonMobil, Royal Dutch Shell, BP, Citigroup, Bank of America, General Electric, Gazprom, Pfizer, and Chevron), those rankings are certain to shift with the downturn in the US economy. Future financial fortunes are shifting from the US to more prosperous markets in Asia, China, India, and South America.

As the United States struggles through a recession in 2008 -- and Japan, Germany, France, China, and Britain try to avoid getting whipped by the American economic backlash -- investors are looking to top-performing foreign companies that are well-positioned to withstand America’s recessionary fallout.

Here are five companies worth examining based on their profitability, superior customer service, strong global positions, and capable leadership.

At the top of the leader board for most profitable companies in 2006 is Compass Group, a British-based company that is considered the market leader in providing food and a range of selected support services to customers in the workplace. Compass Group ranked Number One in “biggest increase in profits during the second half of 2006 with a whopping percentage increase of over 27,000%. That’s right! Mergers and acquisitions certainly helped Compass Group’s bottom line in 2006.

Edeka Zentrale, which ranked Number Two for the biggest increase in profits for the second half of 2006, is Germany's leading food retailer and wholesaler with more than 13,800 outlets which operate as largely independent retailers supplied by its own regional food wholesalers. Edeka Zentrale enjoyed a 3,000% increase in profits from 2005 to 2006.

Alcan was the third most profitable company during the second half of 2006. Alcan has evolved into one of the globe’s leading suppliers of bauxite, alumina and aluminum, and a top-ranked provider of engineered and packaging materials, delivering increased productivity, competitiveness and profitability to customers around the world.
Alcan has some 68,000 employees, including its joint ventures, in 61 countries and regions. It’s based in Montreal, Canada with 2006 revenues of $23.6 billion and a handsome profit gain of over 1,200% from 2005.

China Life Insurance Company captured the fourth spot with 2006 profit gains of 595% as compared to its 2005 performance. China Life provides annuity products and life insurance to individuals and groups in China. The company offers products and services, such as individual and group life insurance, accident, and health insurance. It distributes its products through its direct sales representatives; agents; intermediaries; and commercial banks, postal savings, and cooperative saving institutions. The company was founded in 1949 and is headquartered in Beijing, China.

In the number five spot is Royal Ahold based in Amsterdam, Netherlands. Ahold is an international group of quality supermarkets with operations in the United States and Europe. Among its US brands are Stop & Shop, Giant Foods, and Peapod.com which provides internet-based shopping and grocery delivery for other brands. Ahold enjoyed a 582% increase in profits in 2006.

While the United States will spend most of this year in a recession as a result of its mismanaged war spending and sagging consumer confidence, there are several financial opportunities on the horizon as more foreign companies emerge as profit leaders in 2008.

About the Author: Tom Hinton is president of the American Consumer Council. Tom is a popular speaker at business conferences and corporate events. He can be reached at tom@americanconsumercouncil.org

Consumer Health Care Interests Are Not Being Served by Health Insurers

by Thomas Hinton

Every week, it seems like there's another sad story in the newspaper, or on the television evening news, about the plight of someone who has been denied vital medical care. I'm talking about American citizens who have health insurance and pay their bills.

Let's review the case of Scott "Scotty" Eveland, a 17-year old senior at Mission Hills High School in Oceanside, California, who was severely injured and paralyzed while playing for his high school football team last fall. While Scotty is making a slow recovery, doctors who are treating him at a San Diego County hospital, are cautiously optimistic about his progress and recommended to Blue Cross of California that he remain at their facility to receive daily physical therapy.

But, Blue Cross of California decided Scotty's care was costing too much money and ordered him moved to another facility. Despite the protests of Scotty's doctors, family, and the Oceanside community, Blue Cross of California refused to change its ruling. The family appealed the health insurer's decision but lost. The have made a final appeal to California state regulators who can -- and should -- overrule Blue Cross of California.

Blue Cross of California noted in its decision that similar care was available at a lower cost, non-medical facility. The family and physicians tending to Scotty strongly disagree. Something tells me they know best since they are involved in his recovery and care every day.

Given this scenario and the gut-wrenching experiences people and patients must suffer through, I must ask the ultimate question: Why is it that health insurers like Blue Cross of California serve as both judge and jury in these matters?

Something is fundamentally wrong here with the health care system and how it is managed. For two years, the American Consumer Council -- along with other consumer-oriented organizations and government agencies -- have rallied against the health care management establishment to challenge the injustices and unfair practices of companies like CIGNA and Blue Cross of California who serve as both judge and jury. In essence, claimants pay their insurance premiums and then, if it suits the whims and financial goals of the health insurers, they decide whether or not people like Scotty recover or remain in a vegetative state. As harsh as it sounds, that's what medical directors and other so-called "health care professionals" are deciding every day. It's a sham!

Is it possible that medical directors, who once swore allegiance to uphold the best care of their patients when taking the Hippocratic Oath (an oath traditionally taken by physicians pertaining to the ethical practice of medicine), have been bought-off by health insurers and compromised in their ability to make unbiased decisions? I think so. How else does one explain their decisions to deny care? Certainly, these men and women are intelligent people. But, it appears they've lost their ability to act rationally and in the best interest of their patient-claimants in order to save their employers a few thousand dollars! Yes, it's really money, but, it's also about the dignity of human life!

When you read the Hippocratic Oath, which dates back to the Fourth Century, and is attributed to the father of medicine, it states unequivocally what is expected of a physician. This includes the medical directors of health insurers who also took this oath:

1. To teach medicine to the sons of my teacher.
   
2. To practice and prescribe to the best of my ability for the good of my patients, and to try to avoid harming them.
   
3. Never to do deliberate harm to anyone for anyone else's interest.
   
4. To avoid violating the morals of my community. (Many licensing agencies will revoke a physician's license for offending the morals of the community).
   
5. To avoid attempting to do things that other specialists can do better.
   
6. To keep the good of the patient as the highest priority.
   
7. To avoid sexual relationships or other inappropriate entanglements with patients and families.
   
   

Clearly, sections 2, 3, and 4 appear to be in question with the continuing care and treatment decisions of certain medical directors of health insurers. This raises some interesting legal questions that consumer groups are exploring. For example, if the "Community" were to sue a health insurer's medical director (or other licensed medical personnel), and a jury found that individual to be guilty of violating their Hippocratic Oath, could the guilty medical director be suspended from practice?

Perhaps it's time for community leaders and families of patients to raise the stakes and organize major boycotts and protests at these companies so that legislators will take action to fix a broken system.

While many health care proposals have been put forward -- including an impractical proposal by Governor Schwarzenegger of California to require all Californians to purchase health insurance -- the ultimate answer, we believe, is for the federal government to adopt a universal health system that provides primary and urgent care for all citizens. Such a plan was introduced by the American Consumer Council and can be viewed at: www.americanconsumercouncil.org

In the final analysis, there must be a national health care program that eliminates health insurers and removes life-and-death decisions from the hands of people who have been compromised in their ability to make unbiased decisions because their allegiance is not to the patient, but rather, a for-profit company that mostly cares about making a profit and not improving the health of the patient.

About the Author. Thomas Hinton is the president of the American Consumer Council and can be reached at tom@americanconsumercouncil.org