Health insurance companies in the U.S., Canada and Europe hold nearly $1.9 billion in fast-food company stock, according to a new study from researchers at Harvard Medical School and the department of medicine at Cambridge Health Alliance. In the study, published this week in the American Journal of Public Health researchers examined major insurance companies’ stock holdings with five leading, publicly traded fast food chains: McDonald’s, Burger King, Jack in the Box, Yum! Brands (which owns KFC, Taco Bell, and others), and the Wendy’s/Arby’s Group. They found that, as of June 11, 2009, major health insurers owned $1.88 billion in fast-food stock, representing 2.2% of the companies’ total public holdings.
While some of the insurance companies have disputed the accuracy of these figures, the researchers found that U.S.-based insurance providers Prudential Financial, Massachusetts Mutual and Northwestern Mutual owned $355.5 million, $366 million and $422 million respectively in fast-food stock as of last June, with Northwestern Mutual representing the largest fast-food stock holding of any insurance company included in the study. ING, the insurance provider based in the Netherlands, held $406.1 million in these stocks. Canadian insurance provider Manulife held $146.1 million worth of fast-food stock. Those numbers, according to the study, were based on data from Yahoo! Finance from June 11 of last year.
The study authors argue that these findings show a disconcerting disregard among insurance companies for the a growing understanding of how the fast food industry is “increasingly understood to negatively impact public health.” Though they concede that fast food products can of course be consumed responsibly, the researchers emphasize that “the marketing and sale of products by fast food companies is done in a manner that undermines the public health,” and that having the very organizations that provide health insurance support these fast-food chains indicates corporate irresponsibility. As study author Dr. J. Wesley Boyd told the Wall Street Journal health blog:
“They’re profiting directly off the people who eat fast food, and if that leads to obesity or cardiovascular disease, they’ll charge you more for premiums if you have some of those conditions… They’re making money in either case.”
Health insurers should be “held to a higher standard” Boyd and colleagues argue before presenting two means of achieving that loftier standing. Insurance companies can either “divest themselves of holdings in fast food companies as well as other industries that have a clearly negative health impact,” they suggest, or they can use their ownership as leverage to force fast-food chains to adopt “practices consistent with widely accepted public healthy principles.”
The researchers concede that there are a few logical explanations for why health insurance providers might hold fast-food stock—to offset financial liability “associated with their policyholders consuming fast food,” due to a lack of understanding of the potential negative public health impact of excessive fast food consumption, or even simply due to a lack of communication between departments. Yet none of these explanations let the insurers of the hook, they argue. “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,” they write. “This responsibility includes aligning all o their resources—including financial investments—in ways that improve health or, at the very least, do not harm it.”