IBX and Highmark announced on January 21st that the two companies will no longer seek to merge. Our analysis illustrates how this is a minor negative since the merger would not significantly increase the combined companies’ bargaining power versus providers or customers.
The instability of the stock market has had serious implications on managed care plans in regards to their non-operating earnings and ultimately their earnings per share for 2008 and 2009.
In an effort to cut costs, CIGNA, WellPoint, Inc., and Aetna have recently announced layoffs. The total announced layoffs for the three companies were approximately 3,600 or roughly 3% of their workforce.
Aetna recently announced an upward revision of its projected pension expenses for full-year 2009 to $0.39 per share. This is a $0.54 per share increase over the $0.15 per share pension benefit for full-year 2008. This increased pressure is a result of the decline in value of investment securities supporting pension funds. Publicly traded Health plans such as Aetna and CIGNA have declared measures to offset the decline in their pension funds.
On average, health plan stock prices grew 5.6% for the month of January. Health plans outperformed the market, which declined by 8.6%. Nine of the fourteen health plans had increases in stock prices. Valuation indicators for the month of January were mixed.
Two of the fourteen publicly-traded health plans announced earnings last month. UnitedHealth Group reported a decrease in earnings per share of 15.7% for year, resulting from a decline in non-operating income compared to the prior year. WellPoint, Inc. reported a loss of 36.9% in net income for the year mainly attributed to large losses in investment income and low growth in revenues compared to 2007.
Blue Cross and Blue Shield of Florida (BCBSFL) announced that it has completed its acquisition of Florida Healthcare Plan, Inc. (FHCP) from Halifax Hospital Medical Center. According to the Boston Globe, Blue Cross and Blue Shield of Massachusetts (BCBSMA) are in preliminary talks with Excellus Blue Cross Blue Shield of Rochester, New York for a possible merger or joint venture.
Kaiser Permanente announced that it has appointed Christopher Ohman as Senior Vice President of Health Plan Operations for the regions outside of California, replacing Peter Andruszkiewicz who has been named as president of Kaiser Permanente of Georgia. Scott & White names Harvey Littman as its Chief Financial Officer replacing interim CFO Richard Swift. Dale Wolf resigned from Coventry.
In this month’s analysis, we profile firms that provide outsourcing services to health plans. Such firms promise to offer the advantages of scale while preserving their autonomy. Firms, services and contacts are provided.
Adobe Acrobat Reader is required to view all of Sherlock Company's publications online. The program can be downloaded, free of charge at www.adobe.com.
Home | SEER Forums | Analyses | Site Index | Tools | Contact Us
© 1997-2012 Sherlock Company. All Rights Reserved. Legal Information