Regulatory filing by Hospital & Medical Service Plans citing a New England Journal of Medicine paper — Molina Healthcare, 2016-02-11
Molina HealthcareMolina HealthcareNYSE MOH
Filings SEC · Quote Yahoo cited a paper published in the New England Journal of Medicine in its regulatory filing with the U.S. Securities and Exchange CommissionU.S. Securities and Exchange Commission
Regulator · Website as a basis for its claims. The company read the manner in which the paper was written and the scope it actually demonstrated in sequence. It recorded where the stock price movement over the following month compared to past cases of the same type. This is a retrospective judgment written after knowing the results. The paper was read only up to the abstract.
The disclosure was written in the press release as follows:
When a U.S. listed company has something to inform shareholders, it files a 8-K with the Securities and Exchange Commission. Molina Healthcare filed this document on 2016-02-11, with item numbers 7.01 Reg FD disclosure and 9.01 financial statements · exhibits. The company cited a paper published in New England Journal of Medicine in the attached press release. Translating the sentence in the original document that cites the paper verbatim, it reads as follows:
New England Journal of Medicine: Accountable Health Communities Addressing Social Needs through Medicare and Medicaid; Dawn E. Alley, Ph.D., Chisara N.
What a reader should first check is where the company placed the paper within the press release. Next, the reader should determine whether the paper supports the entire company claim or only part of it. To answer the latter question, one must read the full paper. This article, which has read only the abstract, cannot provide that answer.
The scope of the paper discussed in the abstract is limited to this.
The paper's title is Accountable Health Communities — Addressing Social Needs through Medicare and Medicaid, and it was published in New England Journal of Medicine on 2016-01-05. The authors are affiliated with the Centers for Medicare and Medicaid Services. The summary at the beginning of a paper is called abstract. This article has read only up to that point. The paragraph was written by a person after filtering a draft generated by a machine reading the abstract through numerical comparison, and thus it is of a different quality than a full reading of the paper.
This article is not a research paper but a short policy introduction published in the medical journal NEJM. It announces a payment model that the U.S. Centers for Medicare and Medicaid Services will test over five years with 200,000,000 dollars. It aims to conduct a large-scale trial of approaches to address upstream health factors such as nutrition and food within the healthcare delivery system. This is not a report on results but an announcement of the beginning.
What the abstract does not answer remains in the full text and appendices. This article, which has not gone beyond the abstract, leaves those gaps unfilled. Readers should compare the two citations above to determine which sentence in the abstract corresponds to the excerpt cited by the company.
One month later, the stock price was within the middle half of the sample.
The remaining return after subtracting the portion that moves with the overall market is called excess return. The date is written as trading day, counting only the days the stock market is open. In terms of the calendar, 20 trading days are approximately one month. The excess return for the day of the regulatory filing and the following month are listed in the table below.
| Period | Excess return relative to the market | Meaning |
|---|---|---|
| Five trading days before the filing | +0.1% | The extent of movement before the filing |
| On the day of the filing | +7.0% | On the filing day or the first trading day thereafter |
| Accumulated over +1 to +5 trading days | +9.9% | One week |
| +1 to +20 trading days cumulative | +3.2% | One month |
A bundle of past cases of the same type is called a sample. The position counted from the bottom is expressed as a percentile. The one-month excess return of +3.2% in this case is within the bottom 69% of the 142 samples and is within the lower half.
| Sample scale (20 trading days) | Tenth from the bottom | Fourth from the bottom | median | top 25% | top 10% | This case |
|---|---|---|---|---|---|---|
| Excess return | −31.9% | −20.1% | −7.4% | +5.5% | +19.5% | +3.2% |
Half of the sample falls between the two central marks in the chart. One checks from the chart whether this case lies inside or outside. The sample collects cases where U.S. listed companies wrote papers in 8-K over the past ten years. The company itself is excluded from the sample. The numbers written here are past facts, not rules to apply to the next case.
There is one more case where the same company wrote a paper in 8-K, so it is placed together in the table below.
| Disclosure date | the academic journal of the paper | one month excess return |
|---|---|---|
| 2016-01-11 | New England Journal of Medicine | −1.7% |
after the regulatory filing, the company issued such documents
after the filing date, the company issued three 8-K filings. Only the item numbers are listed here. In 8-K filings without titles, the item numbers indicate the type of content, so one can determine whether it was an earnings announcement or a contract by the number. The specifics of what occurred are read in the original text of each link.
- 2017-05-02 8-K Items 5.02, 7.01, 9.01 — Executive/Director changes · Reg FD disclosure · Financial statements and exhibits
- 2017-05-02 8-K Items 2.02, 9.01 — Earnings Announcement · Financial Statements · Exhibits
- 2017-05-15 8-K Items 5.02, 5.07, 9.01 — Officer and Director Changes · Shareholders' Meeting Results · Financial Statements · Exhibits
What This Article Does Not Answer
This article, which reads only abstracts, cannot answer how the paper reviewed what method, what was tested, and to what extent. How often the paper cited by the company was cited afterward can be checked again using the citation count from OpenAlexOpenAlex
Data source · Website. What will be seen next is whether the company's next 8-K again cites the same paper.
Term explanation
- 8-K
- A periodic report submitted to the Securities and Exchange Commission when a listed company in the United States has something to inform its shareholders. The types are indicated by item numbers such as earnings, contracts, and executive changes. All events in this article are derived from this document.
- Excess return
- The remainder obtained by subtracting the overall market return from the stock return. It is used to observe the movement of this company alone, excluding the portion influenced by the overall market fluctuation.
- Trading day
- A date counted only on days when the stock market is open. Since weekends and holidays are excluded, 20 trading days correspond to approximately one calendar month.
- Sample and percentile
- A bundle of past cases of the same type is a sample, and the position from the bottom is expressed as a percentile. A percentile of 10 means that nine out of ten cases performed better than this case.
- Abstract
- A summary placed at the beginning of a paper. The author writes in a few sentences what was done, how it was done, and what results were obtained. Without reading the full text, one cannot know the details and limitations of the method.