Managed Care Report
Managed Care Report
• Wellpoint Health Networks (Thousand Oaks, CA) recorded 2Q99 earnings of $71 million, $1.03 per share, compared to a net loss in 2Q98 of $47 million, 66 cents per share. The company’s revenues increased nearly 19% to $1.85 billion. The mean estimate of analysts surveyed by First Call was for 2Q99 net income of about $1.02 per share. Wellpoint said 2Q99 membership increased in California by nearly 14%, or 586,000, with membership outside of California falling 14.3% on attrition in previously acquired large-group businesses.
• Ceres Group (Cleveland) announced sales of $74 million of annualized new premium in 2Q99, compared to $15.6 million in 2Q98. The increase was due to a larger agent force representing the company’s insurance subsidiaries as a result of new acquisitions. The increase was also attributed to new product introductions. One of the most significant changes for Ceres Group in 1999, said Chief Sales Officer Bruce Henry, has been its entry into the senior age life and health insurance market. "Our Continental General subsidiary provides an excellent platform from which we expect to expand our senior age operations. In 3Q99, we plan to roll out our new Senior Power Portfolio, which includes long term care, home healthcare, Medicare supplement, Medicare Select, wealth accumulation annuities, and senior cancer coverage," Henry said.
• RightChoice Managed Care (St. Louis) reported a 2Q99 net income of $3.9 million, 21 cents per share, compared to a net income in 2Q98 of $1.2 million, 6 cents per share. The company’s medical margin was $22.74 per member per month, a 13% increase over $20.16 per member per month in 2Q98.
• PacifiCare Health Systems (Santa Ana, CA) total membership as of June 30, 1999, was 3.6 million members, about 2% below the year-ago membership. The drop was primarily attributable to the sale of the company’s Utah HMO plan, a continued focus on achieving targeted commercial price increases, and the exit of Medicare programs in selected counties, PacifiCare said. For 2Q99, operating revenue was $2.5 billion, which was comparable to 2Q98 and 1Q99. The company reported a net income available to common shareholders in 2Q99 of $68.9 million, $1.49 per share, compared to a 2Q98 net income available to common shareholders of $46.2 million, $1.06 per share. During 2Q99, PacifiCare announced a definitive agreement to acquire Antero Healthplans of Colorado, which will add about 38,000 members when the transaction closes later in 1999.
• Humana (Louisville, KY) said, effective Aug. 1, it will assume operational responsibility for the major PPO provider network that its small-group business uses, which previously was managed by Private Healthcare Systems. About two-thirds of Humana’s small group members use the network. The new provider network will be named ChoiceCare Network and will include more than 300,000 physicians and 2,500 hospitals in 46 states. The network management responsibilities Humana will be assuming from Private Healthcare Systems are a natural extension of Humana’s business, officials said. In other news, Humana has entered into partnerships with three medical organizations to operate five Orlando-area medical centers formerly operated by FPA Medical Management. The agreements are effective between Aug. 1 and Sept. 1. The three Orlando-area medical groups that have entered into partnerships with Humana are GeriMed of America, Family Physicians of Winter Park, and Associated Family Medicare. Humana assumed operational responsibility for 50 former FPA centers June 1 on a transitional basis as part of an agreement with FPA, approved by the federal bankruptcy court overseeing FPA’s Chapter 11 reorganization. The partnerships are consistent with Humana’s intention to transfer operation of the former FPA centers to other provider groups, enabling Humana to focus exclusively on its core business of health insurance.
• Blue Cross and Blue Shield of Maine (BCBSME; Portland, ME) has selected Blue Pumpkin Software’s (Mountain View, CA) PrimeTime workforce management software to streamline its primary call center operations. Prior to using PrimeTime, BCBSME’s challenges in the call center were long holding time, resource retention, and controlling costs.
• Rhode Island House Majority Leader Gerard Martineau is accusing Blue Cross and Blue Shield of Rhode Island (BCBSRI; Providence, RI) of violating its agreement with general assembly leaders not to pursue certain networks for at least three months. Matineau is upset that BCBSRI is moving forward with plans to limit some 88,000 subscribers to selected networks of laboratories and home health agencies, reported the Associated Press. BCBSRI officials told the Providence Journal, however, that there was never any such agreement. Vice President for Legislation and Community Affairs Thomas Lynch said BCBSRI agreed to the moratorium only if the other health insurers would do the same, and he said the other insurers refused. Martineau said the first step would be to meet with the affected parties and discuss the issues, and then weigh the possibility of a special legislative session. Meanwhile, the AP reported, hospitals are worried that BCBSRI’s plans will threaten their survival, as most of the hospitals own home health agencies, and if BCBSRI requires its subscribers to use out-of-hospital home health agencies, it will siphon business away from the hospitals.
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