Fred, Ethel, and Medicare Part D: "Choice is Swell"

PacifiCare recruits I Love Lucy characters to sell its new stand-alone prescription drug benefits:

Through the magic of Hollywood, famously tightfisted Fred (William Frawley) and his irascible wife Ethel (Vivian Vance) are brought back to life in a series of entertaining vignettes. Innovative production techniques combine body doubles, voice impersonators, original sets and computer-generated imagery to enable Fred and Ethel to ''speak'' once more...

"We are confident that the 'Choice is Swell' campaign will effectively highlight our Part D prescription drug plans' affordability and quality," said Phanstiel. "Fred and Ethel are American icons that capture the essence of a generation and its desire to get the best value for its money. After exploring numerous advertising options, we chose Fred and Ethel because of their enduring popularity and strong appeal, not only with seniors, but also with baby boomers and people of all ages."

They'll need lots of Freds and Ethels in their plans. As Procare Blog notes,

...the race to get enrollees in the various Plan D programs is off, with PacifiCare unveiling a list of options approved nationally. You can almost hear the thunder of hooves from Big Insurance...The strategy, essentially, is to get as many enrollees as possible, the fastest, which is going to leave a lot of smaller competition out of the race.

"The thinking is that this is the one-time chance to get that chunk of enrollment," says Matthew Borsch, analyst at Goldman Sachs.

He notes that profit margins are expected to be small, perhaps only 2 or 3 percent. And what's this? A proposed merger between United Health Group and Pacificare will be...very expensive. David E. Willliams, of Health Business Blog, cites Modern Healthcare:

"California Treasurer Phil Angelides criticized UnitedHealth Group's proposed acquisition of PacifiCare Health Systems, Cypress, Calif., calling $314 million earmarked for payouts to top executives excessive. Angelides, who plans to run for governor next year, urged Gov. Arnold Schwarzenegger and two of the state's largest public pension funds to use their investment clout to oppose the $8.1 billion deal if the payments are not rescinded."

Here's David:

"The payouts average $8M per executive. Maybe they should have kept a lower profile and settled for $5M."