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July 31, 2008
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MHMR July 31, 2008: Volume 16, Number 13
Humana to buy Cariten...2Q08 MCO profits fall 24%...SPECIAL REPORT:
Managed Behavioral...Behavioral still competitive: Aetna, Cenpatico, Cigna, Magellan, Comprehensive, Health Net, United, ValueOptions, WellPoint...Chart: 2Q08 MCO financials...’09 costs to rise 9.6%, PWC says...Medicate veto override hits plans...Aetna names controller...United names regional CEOs...Is underwriting cycle reality?...WellCare names Tran CFO...Highmark, IBX defend merger...Highmark, IBX merger opposed...Humana names regional CEO...and more...
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MANAGED BEHAVIORAL STILL COMPETITIVE
Competition in the managed behavioral business continues to be strong, as health plans contend that the integration of medical and behavioral benefits has a positive impact on both on outcomes and costs.
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HUMANA TO BUY CARITEN FOR $245 MILLION
Humana Inc. (Louisville, KY) has signed a definitive agreement to acquire Tennessee-based PHP Companies, which does business as Cariten Healthcare, for $245 million in cash from Covenant Health (Knoxville, TN).
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2Q08 MCO PROFITS FALL 23.5%
Second-quarter 2008 net income among 12 top managed care organizations fell 23.5% to $2.296 billion on revenues of $62.772 billion, up 9.4%.
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MEDICARE PLANS LOSE IN VETO OVERRIDE
Congress voted in July to override President Bush’s veto of legislation that would slash reimbursements to Medicare Advantage health plans, a blow to the managed care industry that is expected to slow growth in senior insurance products.
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AETNA NAMES PARMESWAR CONTROLLER
Aetna Inc. (Hartford, CT) has named Rajan Parmeswar, 46, vice president, controller and chief accounting officer. Parmeswar, who was most recently with PricewaterhouseCoopers, succeeds the retired Ronald Olejniczak. Parmeswar reportes to Aetna corporate finance head Kim Keck.
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MCO UNDERWRITING CYCLE “UNDENIABLE,” ANALYST SAYS
Morningstar stock analyst Matthew Coffina wrote in an analysis of the managed care industry that “it now appears undeniable that managed care has entered a cyclical downturn. However…this downturn will be short and shallow.” Coffina went on to say that managed care stocks are “very cheap at current levels.”
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WELLCARE NAMES TRAN CFO
WellCare Health Plans (Tampa, FL) has named Thomas Tran chief financial officer, filling a post left vacant by the departure of Paul Behrens as part of a management shakeup in January (MHMR, Jan. 31).
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HIGHMARK, IBX DEFEND MERGER IN STATE HEARING
The chief executive officers of both Highmark Inc. (Pittsburgh) and Independence Blue Cross (Philadelphia) defended the proposed merger of the two organizations in a state regulatory hearing this week, arguing that the combined entity wouldn’t negatively impact competition in the marketplace.
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HIGHMARK, IBX DEFEND MERGER IN STATE HEARING
The chief executive officers of both Highmark Inc. (Pittsburgh) and Independence Blue Cross (Philadelphia) defended the proposed merger of the two organizations in a state regulatory hearing this week, arguing that the combined entity wouldn’t negatively impact competition in the marketplace.
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PA HOSPITAL GROUP OPPOSES HIGHMARK, IBX MERGER
The merger of Highmark Inc. (Pittsburgh) and Independence Blue Cross (Philadelphia) would create a dominant health plan that “could drive down provider reimbursement levels” and stifle competition, a hospital industry official said.
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HUMANA NAMES CEO FOR TX, CO, UT
Humana Inc. (Louisville, KY) has named Ken Malcolmson to the newly created position of chief executive of the company’s west central region, serving Texas, Colorado and Utah.
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