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May 15, 2006
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MHMR May 15, 2006; Volume 14, Number 9
1Q06 MCO net rises 5%...MCO stock jitters...’05 NJ HMO net grows 27%...UnitedHealth under fire...Chart: 1Q05 MCO financials...Chart: YTD MCO stock prices...Chart: NJ HMO financials...McGuire stresses wellness...Centene acquires Cardium...HMO stocks fall 0.1%...Services stocks fall 5%...8 MM in stand-alone PDPs...Medco settles federal case...Caremark net rises 16%...American Specialty wins Aetna...and more...
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1Q06 MCO NET INCOME RISES 5.4%
Net income for 13 publicly traded managed care companies rose 5.4% to $2.216 billion in the first quarter of 2006, the lowest quarterly rate of increase in years.
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WALL STREET JITTERY ABOUT MCO STOCKS
Wall Street is officially nervous about managed care stocks. With industry bellwether UnitedHealth down 26% for the year through May 12, investors are watching closely for any indications of trouble among other managed care companies.
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’05 NJ HMO NET INCOME INCREASES 27.2%
New Jersey HMOs reported a 27.2% gain in net income in 2005 to $318.3 million on revenues of $8.707 billion, up 9.7%, according to an MHMR tally of state insurance department data.
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WILL UNITED MANAGEMENT TAKE FALL?
UnitedHealth Group (Minnetonka, MN), which is under federal investigation for its stock options granting practices, has admitted to a “significant deficiency” in its administration of stock options and warned of the possibility of an earnings restatement.
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8 MILLION ENROLL IN STAND-ALONE PDPs; UNITED LEADS
About 8.1 million Medicare beneficiaries were enrolled in a stand-alone Part D prescription drug plan as of April 27, with UnitedHealth (Minnetonka, MN) attracting the largest number of enrollees at 3.797 million.
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WELLNESS IS TOP ISSUE FOR HEALTHCARE, MCGUIRE SAYS
Behavior surrounding diet, smoking and other wellness programs is the number one issue that providers, health plans and pharmaceutical companies can impact, said William McGuire, M.D., chairman of UnitedHealth Group (Minnetonka, MN).
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CENTENE BUYS DM COMPANY CARDIUM FOR $12 MILLION
Centene Corp. (St. Louis) announced the acquisition of disease management company Cardium Health Services Corp. (Farmington, CT) for about $12 million in cash, with the potential for another $1 million pending the company achieving certain financial targets. Cardium offers disease management services for coronary artery disease, congestive health failure and diabetes.
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AMERICAN SPECIALTY WINS AETNA FOR CHIROPRATIC
American Specialty Network (King of Prussia, PA) has won a contract to manage chiropractic benefits for members of Aetna Inc. (Hartford, CT) in Pennsylvania, Delaware, Virginia and Washington, DC.
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MEDCO TO PAY $163 MILLION IN FEDERAL LEGAL SETTLEMENT
Medco Health Solutions (Franklin Lakes, NJ), the nation’s largest pharmacy benefit manager, announced an agreement to pay $163 million to settle a seven-year-old government probe into PBM rebate practices, among other legal matters.
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CAREMARK NET RISES 16%
Caremark (Nashville, TN), the nation’s second largest pharmacy benefit manager, reported first-quarter 2006 net income of $228.797 million, up 16% from the same period a year earlier, on revenues of $8.907 billion, up 7%.
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