Record of Society of Actuaries

Calendar year 1987 was one of the worst on record for health care carriers. I'm sure that most of your managements are reeling from the financial results of 1987. Companies, still experiencing losses, are desperately hoping for a quick turn around. I presume that is why this room is as full as it is. You are trying to find another tool to help you figure out how to solve the health care financing problem. The health care industry has repetitively experienced economic cycles. If you go back and plot financial results over the past thirty or forty years, you'll find that the industry goes through about a fiveto six-year cycle. Carriers make money for three years or so and then lose money for three years or so. This cycle has been repeated over and over. The industry is in the down cycle right now.