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October 15, 2005
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MHMR Oct. 15, 2005; Volume 13, Number 17
’06 healthcare costs to rise 9.9%...IL HMO net climbs 127%...Group Health buys KPS...Amerigroup shares plunge...AZ HMO profits drop 7% in ’04...Chart: AZ HMO financials...FL HMO net rises 58%...Chart: FL HMO financials...MA HMO profits fall 11%...Chart: MA HMO financials...UnitedHealth 3Q05 margin soars...Humana settles class action...Kaiser tops in MD satisfaction...Health Net taps Srivastava...MCO stocks fall 3%...Services stocks fall 5%...United wins IL Part D pact...WellPoint teams with Walgreen...Express Scripts buys Priority...Mercer, Marsh units consolidate...and more...
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’06 HEALTH COSTS TO RISE 9.9%, STUDY SAYS
Healthcare costs among employers are expected to increase 9.9% in 2006, compared to a 9.2% increase in 2005, according to a recent survey from Hewitt Associates (Lincolnshire, IL).
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IL HMO NET INCOME CLIMBS 127% IN 2004
HMOs in Illinois boosted net income 126.9% to $200.7 million in 2004, up from $88.5 million in 2003, according to an MHMR tally of state insurance department data.
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GROUP HEALTH BUYS KPS, INVESTS $19 MM
Group Health Cooperative (Seattle, WA) has completed the bailout of KPS Health Plans (Bremerton, WA), taking over ownership of the failing PPO and investing $19 million in capital.
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AMERIGROUP SHARES PLUNGE ON LOSS
Amerigroup Corp. (Virginia Beach, VA) saw its share price fall 44% last week after the company announced that it would report a third-quarter net loss of $0.06 to $0.08 per share ($3.18 million to $4.24 million based on 53 million diluted shares), compared to Wall Street expectations of net income of $1.73 to $1.78 per share.
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AZ HMO PROFITS DROP 7% IN 2004
HMOs in Arizona reported net income of $155.7 million in 2004, down 7% from 2003, on revenues of $3.75 billion, down 0.1%, according to an MHMR tally of state insurance department data.
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FL HMO NET INCOME RISES 58.1% IN 2004
HMOs in Florida reported total net income of $726.3 million in 2004, an increase of 58.1%, on revenues of $14.492 billion, up 5.8%, according to an MHMR tally of state insurance department data.
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MA HMO PROFITS FALL 10.7% IN 2004
HMOs in Massachusetts experienced a 10.7% decline in net income to $236.4 million in 2004, while revenues rose 3.3% to $9.17 billion, according to an MHMR tally of state insurance department data.
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UNITEDHEALTH 3Q05 OPERATING MARGIN JUMPS TO 12.2%
UnitedHealth Group (Minnetonka, MN) reported a 12.2% operating margin in the third-quarter of 2005, compared to an operating margin of 11.1% in the same period a year earlier, indicating continued gains in productivity and economies of scale through acquisitions.
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HUMANA SETTLES PHYSICIAN CLASS ACTION
By agreeing to pay $40 million to physicians and $18 million in legal fees, Humana Inc. (Louisville, KY) has joined the growing number of managed care organizations that have bitten the bullet and settled class action litigation brought by 700,000 physicians who claimed they were systematically short-changed on claims payments.
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MERCER, MARSH UNITS CONSOLIDATED
Marsh & McLennan Companies (New York) has combined the health and benefits operations of its wholly owned Marsh and Mercer Human Resource Consulting units into a single consolidated entity called Mercer Health & Benefits Inc.
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KAISER TOPS IN MD SATISFACTION SURVEY
Kaiser Permanente (Oakland, CA) received above-average rankings in 30 HEDIS and CAHPS categories in Maryland in 2005—the most of any HMO plan in the state—according to a report from the Maryland Health Care Commission (Baltimore).
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UNITED, PACIFICARE TO SERVE 250,000 IL PART D LIVES
PacifiCare Health Systems (Cypress, CA) announced that it has been chosen by Illinois to coordinate the state’s Cares Rx program, which will automatically enroll in Part D drug plans 250,000 seniors who aren’t dual eligible for Medicare and Medicaid.
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WELLPOINT TAPS WALGREEN FOR PART D OUTREACH
WellPoint Inc. (Indianapolis) announced a partnership with drugstore chain Walgreen Co. (Deerfield, IL) in which the two companies will provide seniors with outreach, education and enrollment information promoting WellPoint’s Medicare Part D plan.
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