Sherlock Company is in its eleventh consecutive year of performance benchmarking. In 2008, we have 46 plans so far participating in universes of Blue Cross Blue Shield Plans, Larger Plans, Independent (Provider-Sponsored) Plans, Medicare Advantage Plans and Medicaid Plans.
Recent results from non-public health plans reinforce trends among publicly traded firms. For the trailing three months ended February 28th, 2008, the eleven health plans in our Health Plan Dashboard reported revenue growth of 9.3%, with ASO/ ASC growth of 63.0% and Medicaid growth of 13.9%, while managed care revenue increased by 0.8%.
Electronic Data Systems announced that it had entered into a definitive agreement to be acquired by Hewlett-Packard for approximately $13.9 billion.
Average health plan stocks increased 9.0% for the month of May, outperforming the market. Improving investor sentiment helped and all valuation indicators increased last month.
Three of the fourteen publicly-traded health plans announced earnings last month. CIGNA’s net income decreased 24.2%, due in part to declines in nonoperating income. Triple-S Management Corporation had a 73.9% decrease in net income, causing EPS to decline 77.8% to $0.04. Universal American Corporation experienced an explosive growth in Medicare part D membership to 1.8 million due to its acquisition of Community CCRx (SM) prescription drug plan in September 2007.
Humana completed its $185 million acquisition of UnitedHealth Group’s individual SecureHorizons Medicare Advantage HMO business in Nevada. Humana also closed its acquisition of OSF Health Plans, which was announced on March 20th.
Coventry Health Care received approval to increase its repurchase of shares by an additional 5%. HealthSpring, Inc. announced that Herb Fritch, Chairman, President, and Chief Executive Officer, and Kevin McNamara, Executive Vice President and Chief Financial Officer, have adopted a Rule 10b5-1 plan.
Capital District Physicians’ Health Plan announced that John D. Bennett Jr. is the new President and Chief Executive Officer. Centene Corporation has appointed Jesse N. Hunter as Executive Vice President, Corporate Development. Harvard Pilgrim Health Care recently announced that James M. DuCharme has been appointed as Chief Financial Officer.
Our bi-annual review of the financial performance of Blue Cross Blue Shield Plans. Performance was soft due to decreasing margins. Higher health benefit ratios and administrative expense to premium ratios were evident.
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