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Managed Care Companies
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AETNA ACQUIRES CHICKERING GROUP
Aetna Inc. (Hartford, CT) has acquired The Chickering Group (Boston), a broker and administrator of school-sponsored health plans serving 283,000 students at more than 100 colleges and universities.
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PACIFICARE SAYS STRIKE MAY IMPACT EARNINGS
PacifiCare Health Systems (Cypress, CA) said it may fall short of 2004 earnings and membership projections because of a strike at three southern California grocery chains.
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WELLPOINT RAISES EARNINGS OUTLOOK FOR ’03, ‘04
Citing better than expected results in October and November, WellPoint Health Networks (Thousand Oaks, CA) said it was increasing its earnings projections to $6.15 per diluted share for the full-year 2003 from $6 previously.
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CORRECTION: 3Q03 NET INCOME
The Nov. 15, 2003 issue of MHMR contained incorrect net income figures for Cigna, UnitedHealth and the total industry. Corrected figures appear in the chart below.
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CONNECTICARE TO EXPAND INTO NY
ConnectiCare (Farmington, CT) will expand into New York, having acquired a health plan licensed to operate in the state from AmeriHealth Inc., a unit of Independence Blue Cross (Philadelphia, PA).
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AETNA LAUNCHES PICK-A-PLAN SUITE IN CALIFORNIA
Aetna (Hartford, CT) is offering small groups in California a package of health plan products called Pick-A-Plan, which enables employers to choose from up to 14 HMO, PPO, and EPO plan options for their employees.
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HMO INSOLVENCIES FALL TO JUST 3 IN 2003
The HMO industry suffered only three insolvencies in 2003, according to Weiss Ratings (Jupiter, FL), as the sector’s financial strength was buoyed by premium increases, cost-cutting and economic growth. In 2002, 10 HMOs failed, Weiss said.
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SPECIAL REPORT: OUTLOOK FOR 2004
The managed care industry is coming off two consecutive years of double-digit profit growth and extraordinary stock market performance, and now the question is whether the ride can last.
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CONSENSUS REPORT: EXECUTIVES HANDICAP KEY TRENDS
In interviewing Wall Street analysts and executives from leading managed care companies for this issue, MHMR asked for predictions on several key legal, legislative, competitive and market trends. The following is our second annual “Consensus Report,” a tally of anecdotes, opinions and crystal ball gazing about what 2004 will likely bring—including our own two cents worth.
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MCOs STILL PRICING AHEAD OF COST TRENDS, ANAYLST SAYS
Managed care commercial premium pricing is expected to continue to rise at a faster pace than costs in 2004, boding well for another year of solid earnings growth, according to a report from Christine Arnold of Morgan Stanley.
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MCO PROFIT MARGINS HIT 3-4% IN 2003
Managed care industry profit margins continued to rise in 2003, with publicly traded companies posting a net margin of 4% in the first nine months of the year.
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VEIEL TOPS 12 ANALYSTS IN ’03 HMO STOCK PICKS
Eric Veiel of Deutsche Banc Alex. Brown, who chose Coventry and UnitedHealth as his top stock picks for 2003, beat out 12 other analysts with an average 80.5% return for the year.
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MCO STOCKS UP 61% IN 2003; OFF TO SLOW START IN ‘04
After a spectacular 2003, managed care stocks fell in early 2004 after an ignominious downgrade by a key Wall Street analyst (see story, this issue). Still, investors can hardly complain given that in 2003 managed care stocks delivered a total return of 61%, topping all major market indexes for the fourth straight year, according to an MHMR tally of 20 issues.
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MANAGED CARE STOCKS FALL 1%
Managed care stocks fell 1% in the two weeks ended Jan. 9, according to an MHMR tally of 19 issues. Market cap rose less than 1% to $106.8 billion.
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