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Dental and medical health insurance are converging. Right here’s what it


Well being insurers are transferring in on the worthwhile turf dental insurers have claimed for many years; the variety of well being plans providing grownup dental advantages greater than doubled previously two years, in keeping with a brand new survey of dental- and health-insurance leaders we performed earlier this yr.

Because the convergence accelerates, extra customers can anticipate their well being plans to supply dental insurance coverage, albeit with a separate premium – a mannequin that would come to dominate the market within the subsequent few years.

With any basic shift in healthcare, nonetheless, comes a slew of pressing, complicated questions: Will some dental payers be left within the mud? How can they greatest adapt to those altering circumstances? What are the obstacles to convergence? And what is going to this shift imply for customers?

Convergence: a possibility or a menace?
Whereas the overwhelming majority of customers nonetheless depend on standalone dental insurance coverage, such insurers are quick discovering the bottom shifting beneath their ft: in keeping with a latest survey, by 2025, most foresee partnering with a well being insurer and almost half anticipate advantages to be bundled.

But whereas 28 p.c of dental-plan leaders see this as a possibility, almost half (49 p.c) understand it as each a possibility and a menace.

One want look no additional than the promise of value-based well being plans at this time to understand the potential upsides: partnering with the best well being plan – and getting access to its capital, scale, community and technological infrastructure – can present dental insurers with a extra holistic view of their sufferers and assist ship higher well being outcomes to extra sufferers at a decrease value.

But a few of these very belongings give well being plans the flexibility to upend susceptible dental payers. Executives we spoke to famous that well being insurers wield deeper pockets, have “extra premium to play with” – which means they’ll decrease costs extra flexibly than dental plans – and may provide one-stop-shop comfort that can be particularly interesting to youthful clients.

On the identical time, dental payers eyeing potential partnerships could also be cautious concerning the healthcare trade’s tendency towards deliberate – generally reluctant – change, as evidenced by the gradual adoption of pay-for-performance reimbursement fashions. And insurers have nonetheless not seen the blueprint for integrating the 2 merchandise and coordinating subsequent care between physicians and dentists.

Worse, well being plans will not be the one ones excited about competing in a market traditionally dominated by conventional standalone plans. Half of the executives surveyed consider that non-medical, ancillary insurers are additionally exerting vital stress on oral advantages.  Whereas a net-entrant into this area, many consider they might start grabbing membership and market share.

To thrive – and to search out the best partnerships – dental plans might want to get proactive and strategic: innovating in areas like various fee fashions, tele-dentistry and information sharing; tackling their know-how debt; optimizing processes by way of information administration methods and improved working metrics; and exploring their very own choices for diversification, be it by turning into third-party directors, buying or merging with different firms or providing ancillary merchandise (e.g. imaginative and prescient, listening to, life, pet) of their very own.

“It’s not just like the mouth isn’t linked to the physique”
Even supposing solely 37 p.c of US adults visited the dentist final yr, respondents to the survey say the largest issue driving dental-and-health plan convergence is the mixing of oral well being into total well being. This integration – mixed with value-based dentistry, partnerships with well being plans and the truth that having dental protection is the perfect determinant of whether or not a person will make common dental visits – ought to finally result in the next quantity of visits total.

On the medical facet, dental-health plan partnerships – particularly these with efficient know-how platforms – can drive higher well being outcomes, care coordination and larger simplicity for customers used to navigating a posh well being system.

The acquisition of a one-product, two-premium plan (i.e., dental advantages bundled with broader medical health insurance) also needs to converse to a millennial client base more and more in quest of comfort. As different insurance coverage markets converge, there could even be alternatives for enabling customers to bundle medical, dental, imaginative and prescient, and pet insurance coverage into single buying choices. Akin to the recognition of bundling house, life, and auto…some consider that this development could transfer in the direction of healthcare.

Although Covid-19 could sow uncertainty into the approaching convergence of dental and well being plans, now just isn’t the time for dental payers to take a seat idly by. With the momentum for bundling with well being plans rising and competitors from ancillary insurers heating up, solely those that take proactive steps to stake out a spot for themselves on this aggressive panorama will thrive as convergence accelerates. So, too, will their members.

Picture: Dmitrii_Guzhanin, Getty Photos


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Singapore to Pay Residents for Protecting Wholesome With Apple


Apple Inc. and the federal government of Singapore have partnered on a two-year well being initiative dubbed LumiHealth, which is constructed round monitoring and rewarding consumer habits by way of the Apple Watch gadget and an iPhone app.

As a part of the scheme, Singapore residents will be capable to earn as a lot as S$380 ($280) in rewards and vouchers by finishing targets and duties set throughout the app. Targets will be achieved by strolling or doing different workout routines like swimming or yoga, and the LumiHealth app will supply customized teaching and reminders for well being screenings and immunizations. Wellness challenges will nudge customers towards making higher meals decisions and bettering sleep habits.


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E*Trade, Apple, Walmart: Stocks That Defined the Week


E*Trade Financial Corp.

The long-predicted M&A frenzy in the wealth management industry is here. Wall Street stalwart Morgan Stanley agreed to buy discount broker E*Trade in a $13 billion deal announced Thursday. The all-stock deal is the biggest takeover by a giant U.S. bank since the 2008 crisis. Earlier in the week, money manager Franklin Resources Inc. agreed to buy rival Legg Mason Inc. for $4.5 billion in cash. E*Trade shares soared 22% Thursday.


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At Their Core, These Apple Arguments Just Don’t Make Sense


After the Apple (AAPL) news on Tuesday morning I saw some folks say this didn’t matter. There is a laundry list of reasons why it is unimportant. Let me share a few I heard.

I heard that if you want — well the person actually used the word “need” — an iPhone, you will still buy it, but you might just have to wait a few more months. There was no mention, not even a consideration, that perhaps said buyer would no longer want or need or be able to afford the phone six months from now. The assumption was that it was temporary. And while that does seem to be the case, there wasn’t even a consideration that there actually may be lost sales, only pent up demand.

The other line of reasoning is that we should not care about an economic slowdown due to the coronavirus because the central banks of the world have our backs and will simply flood the market with money.

I realize this has been the case for quite some time. But I am forced to wonder: If it were that easy, why have we never seen them do this before? I mean, if central banks could simply repeal recessions and earnings misses, why have they not done this before?

Wasn’t this the quarter that we were to see earnings trough and we were already looking past this lack of earnings season to the other side where things were going to be so much better? I suppose that means the earnings trough will now be in the second quarter, which must give us another chance to look beyond at the sunny skies ahead!

What’s another quarter among friends?

In reality, there has been very little selling in the last few weeks. But there has also been very little buying. The majority of stocks peaked in mid-January. There was selling for about two weeks and that was that. But the rebound has been lethargic outside of the major indexes; you can see the cumulative advance/decline line is still well off the highs.

A more smoothed out version, using the McClellan Summation Index, shows a literal flat-lining of the indicator since that late January whoosh down. The majority of stocks are literally just sitting around marking time. It’s only the big cap indexes that see buying.

The oddest part of the entire trading day on Tuesday was that the dollar has been so strong and continued to be so, yet some commodities were strong as well, including gold. The dollar is looking a bit stretched up here and is nearing some decent resistance. So I figure I should note that the Daily Sentiment Index (DSI) for the buck hit 90 on Tuesday. Readings of 90 and above are considered extreme and typically mean a pullback is due.

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Apple Heads for Its Greatest 12 months in a Decade. Possibly It’s Time for a Inventory Break up.


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Apple Is the World’s Most Helpful Firm. Can It Keep That Manner?


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Apple iPhone Launch: Five Things to Look for Ahead of Key Product Event


Apple Inc. (AAPL – Get Report) will host its eleventh annual product launch event in California later Tuesday, with investors focused on service-focused additions, as well as new versions of the AppleWatch and AirPods, to compliment the expected suite of new iPhones.

Apple shares were marked 0.4% lower in pre-market trading Tuesday to indicate an opening bell price of $213.32 each, a move that would still leave the stock with a year-to-date gain of more than 35% and a market value of around $965 billion.

Here a five key questions investors and Apple devotees will be asking ahead of the tech giant’s presentation later today at the Steve Jobs Theater on Apple’s Cupertino, California campus.

Cupertino calling. Join us today at 10 a.m. PDT to watch the #AppleEvent at https://t.co/yLa2e4Xr2R

— Apple (@Apple) September 10, 2019

1. iPhone Home?

Apple’s iconic smartphone remains the company benchmark, despite sliding global sales and increasing competition from low-cost rivals, and today’s event will once again center around the world’s most-recognized handheld device.

Apple is expected to unveil three new models — at varying price points — in what is now the 11th labeled series of the 11-year old handset. Although the official name of the series is yet to be revealed, investors are expecting an iPhone 11 with a base price of $749 and intended as the natural upgrade to the current iPhone XR, an iPhone 11 Pro, priced at $999, and a $1,099-priced iPhone Pro Max.

Each of the new phones is expected to have increased durability, shatter-resistant screen and enhanced camera technology, including a triple lens for the higher priced versions.

2. Apple Watch This Space?

Wearables have become and increasing important component of Apple’s hardware sales, and today’s event is expected to reflect that with a fifth generation offering of the Apple Watch. 

Apple’s smartwatch dominance remains a key advantage in its ability to generate revenue from this hardware set, even as iPhone sales slow. It sells more than twice as many units as Samsung Electronics (SSNLF) and Fitbit, but any changes to the new series are likely to be either software-focused or design based.

Industry rumors suggest the Watch will have a new design based on ceramic and titanium casings and could also include various health-related options, such as glucose monitoring and sleep tracking, to increase its appeal to older customers. 

3. Apple TV or Not to Be?

Apple TV, first mooted last spring, could also form part of today’s event, with CEO Tim Cook potentially unveiling a launch date and price point for the streaming service that is expected to challenge the current market dominance of Netflix (NFLX – Get Report) and the soon-to-be-active Disney+ offering from Walt Disney Co. (DIS – Get Report) .

Apple’s current 4K version of the AppleTV device could also see an upgrade today, particularly if the company plans to lure users to its Arcade gaming platform, which it unveiled last spring as part of a services-focused lineup of new products.

4. Let’s Play Tag?

Industry rumors and trade publications have persistently discussed the potential for Apple to release a Bluetooth-enabled rival to Tile and its popular tracking app. Apple Tags, as its being referred to, could allow users to locate lost or mis-placed gadgets – such as iPhones or iPods — as well as keys, wallets and cameras by using a circular device that would be integrated with the current “Find My iPhone” service. 

5. Budding New AirPod? 

Apple’s incredibly popular wireless earphones, known as AirPods, could also see an upgrade to a third version today, particularly if the higher-priced versions of the iPhone include dual-charging capabilities, which would allow users to refresh battery power in both devices at the same time.

The newer versions, which could be launched later this year and into the holiday shopping season, are also likely to carry higher price points and enhance the group’s first quarter revenue projections. 


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Apple’s Services Push Gives It a Fresh Incentive to Launch a New Apple TV


With the last Apple TV refresh having occurred two years ago, the timing feels right for a new one.

Indeed, ahead of Apple’s (AAPL – Get Report) Tuesday iPhone event, a couple of rumors have popped up indicating that a new Apple TV set-top will soon launch. One states that Apple’s next set-top will (like last year’s iPhone models) be powered by an A12 system-on-chip (SoC), while another states that it will support the HDMI 2.1 interface, which supports nearly three times as much bandwidth as HDMI 2.0 and also improves the playback of fast-moving content such as games.

The rumors are emerging after Apple used its March services event to unveil TV+, a streaming service that will be launching this fall and be available both on Apple TV and rival living room streaming platforms. Also shown off at the event: Apple TV Channels, a service for subscribing to third-party streaming services via Apple TV (echoes of Amazon.com’s (AMZN – Get Report) Prime Video Channels) and Arcade, a game-subscription service that will work on iPhones, iPads and Apple TVs.

Separately, at its June WWDC conference, Apple disclosed that the next version of its tvOS operating system (tvOS 13) will support Xbox and PlayStation game controllers. It also features a revamped home screen meant to improve content discovery, and introduces a picture-in-picture mode.d

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Between Arcade’s pending launch and tvOS 13’s support for Xbox/PlayStation controllers, Apple has a strong incentive to launch a new Apple TV that supports HDMI 2.1 and packs a more powerful SoC than the ones inside of its current set-tops. The Apple TV 4K, which starts at $179, contains an A10X Fusion SoC, while the Apple TV HD, which starts at $149, contains an A8 SoC.

Apple doesn’t break out its Apple TV revenue — the set-top’s sales are included within the “Wearables, Home and Accessories” segment that also features a slew of other products. During Apple’s July 30 earnings call, CFO Luca Maestri disclosed that Apple TV revenue rose at a double-digit annual rate during the company’s June quarter, albeit without going into further detail. Tim Cook disclosed that U.S. monthly viewers for the set-top’s TV app, which was refreshed in May, rose 40%.

Apple TV’s share of the streaming player market is still believed to be well below that of Roku (ROKU – Get Report) and Amazon’s. A survey done by research firm Parks Associates indicated that Apple TV accounted for 13% of the installed base of streaming players owned by U.S. households with broadband in Q1 2019; Roku devices and Amazon’s Fire TV devices were estimated, respectively, to account for 39% and 30%. Last year, eMarketer forecast that 25.1 million Americans would use an Apple TV in 2018, 70.1 million would use Roku and 55.7 million would utilize Fire TV devices.

Business model differences have a lot to do with Roku and Amazon’s lead. Whereas Apple (judging by its pricing) is looking to turn a profit on Apple TV sales, Roku and Amazon treat their streaming devices as loss leaders, with the goal of monetizing users via ads, subscriptions and other services. As a result, Roku and Amazon respectively sell 4K-capable streaming sticks for $50 and $40, and 1080p-capable sticks for even less.

In addition, unlike Apple, Roku and Amazon have both been willing to license their streaming device operating systems to smart TV makers. Roku estimates that it powered more than a third of the smart TVs sold in the U.S. during the first half of 2019.

While it’s unlikely that Apple will license tvOS to third-party hardware makers, given its product philosophy, its services push does give the company some motivation to price Apple TV set-tops more aggressively. Between TV+, Arcade, Apple TV Channels, iTunes rentals and purchases and App Store transactions (including transactions for games working with Xbox/PlayStation controllers), Apple will have quite a few ways to make up for Apple TV discounts.

Whether or not Apple chooses to go this route, or perhaps do something like provide six months of free Apple TV+ with an Apple TV purchase, it’s fair to say that the company’s services efforts have increased the strategic importance of its set-top platform. Going forward, Apple TV will arguably be as much a services vehicle for Apple as it will be a hardware business.


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A Vote for Apple – Barron’s


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Apple Inventory Faces Dangers from the Commerce Conflict and Fading iPhone Gross sales



bulls swooned final week over the corporate’s better-than-expected reported earnings. All it took was a return to income progress after two quarters of declines. The definition of success has modified for the iPhone maker, which spent a decade rising gross sales greater than 20% a 12 months on common.

A return to gross sales progress within the newest quarter was an vital inflection level for Apple (ticker: AAPL), however the negativity might return as traders dig into the underlying realities.

On Tuesday, Apple reported June-quarter income of $53.eight billion, up 1% 12 months over 12 months and above the consensus forecast of $53.three billion. Earnings per share have been $2.18, down from $2.34 the prior 12 months however increased than the $2.09 common analyst estimate. The shares rose 2% the next day, with a number of analysts elevating their Apple inventory worth targets.

The upside got here from stunning areas. Gross sales from the Mac enterprise beat Wall Road’s estimate by about $400 million, whereas the Wearables, Dwelling, and Equipment operation crushed estimates by $700 million. That section contains the Apple Watch and AirPods. Whereas the tech large doesn’t disclose gross sales within the section, Prepare dinner did say final week that wearables grew “properly over 50%” within the quarter. AirPods gross sales in all probability benefited from a revised model launched in late March.

However traders ought to be cautious in evaluating the shifting narrative. The long-term driver of Apple shares has been pleasure in regards to the firm’s providers companies. The inventory transfer is evident on that: Apple is up practically 30% this 12 months, at the same time as iPhone gross sales have declined markedly.

The inventory now trades at 16.four instances projected earnings for the subsequent 12 months, properly above its five-year common of 13.7 and close to a five-year peak of 17.7. Buyers have been paying up for the inventory on the concept Apple is transferring away from its {hardware} focus towards a extra predictable services- and software-driven mannequin.

The issue is that Apple’s providers enterprise stays a query mark and will nonetheless disappoint. The section really missed analyst estimates by $200 million within the June quarter, with gross sales up 13% 12 months over 12 months, versus 16% within the prior quarter.

Furthermore, KeyBanc Capital Markets Andy Hargreaves expects Apple’s providers progress fee to subside over the subsequent 12 months. “Providers enterprise is tied to progress within the person base,” he says. “And the person base is certainly decelerating.”

The dynamic places much more stress on Apple’s subsequent wave of providers, anticipated to be launched by the tip of the 12 months, together with Apple TV+ (video subscription), Apple Arcade (gaming subscription), and Apple Card (bank card). In every space, Apple is becoming a member of a crowded subject. “What Apple is providing just isn’t going to be higher than what’s available in the market,” Hargreaves says.

Amid the joy about wearables, iPhone gross sales got here in beneath expectations for the quarter. The iPhone’s income of $26 billion missed the Road consensus by $300 million, with gross sales down 12% 12 months over 12 months. IPhone unit gross sales, which Apple now not discloses, would possibly look even worse. IDC estimates that iPhone unit shipments have been down 18% 12 months over 12 months within the quarter, the worst exhibiting among the many prime 5 international smartphone makers. Apple didn’t reply to a request for touch upon IDC’s knowledge.

“The core controversy of normalized iPhone progress stays unresolved,” Bernstein analyst Toni Sacconaghi wrote on Wednesday. “We remind traders that iPhones are nonetheless down, [and] huge questions on substitute cycles [are] nonetheless excellent.”

Apple’s new iPhone lineup, due this fall, is unlikely to vary the story considerably. “This [coming] cycle, I consider, might be difficult, as I’m not anticipating dramatically new designs,” Patrick Moorhead, principal analyst at Moor Insights & Technique, wrote in an e mail.

After which there’s commerce. Apple is arguably extra uncovered to China than some other giant U.S. tech agency.

On the latest earnings name, CEO Tim Prepare dinner downplayed reviews that the corporate is transferring manufacturing out of China, the place it largely manufactures its merchandise, to keep away from potential tariffs. “There was loads of hypothesis across the subject,” he mentioned. “I wouldn’t put loads of inventory into these.”

Apple is clearly anxious about tariffs, nonetheless. In June, it despatched a letter to U.S. Commerce Consultant Robert Lighthizer, noting that the subsequent spherical of proposed tariffs would harm it as a result of it might cowl all of Apple’s main merchandise, together with the iPhone, iPad, Mac, and AirPods. “We urge the U.S. authorities to not impose tariffs on these merchandise,” Apple wrote. “U.S. tariffs would additionally weigh on Apple’s international competitiveness.”

The letter wasn’t convincing sufficient. On Thursday, President Donald Trump introduced plans to impose a 10% tariff on Sept. 1 overlaying $300 billion in imports from China—together with Apple’s key merchandise. Investor response was swift; Apple closed down 2% on Thursday and one other 2% on Friday, to $204.02.

Whereas the newest tariffs could be a negotiating tactic, any chance of commerce levies doesn’t appear mirrored in Apple inventory.

So the place do Apple shares go from right here?

In early January, a number of days after the corporate had issued a gross sales warning and with its inventory reeling, we mentioned the pessimism had gone too far, arguing that the shares might rise 30%, to $194. The bullish name proved right, with the inventory hitting that mark in March.

From there, we warned that the inventory’s 2019 features might fade as traders returned their give attention to the declining iPhone gross sales. Our view hasn’t modified. Apple is richly priced, simply as circumstances appear to be deteriorating. 

Write to Tae Kim at tae.kim@barrons.com


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