These plans are a cornerstone of competitive health plan markets and Sherlock Company is now distributing its fifth annual benchmarks for this universe. The median administrative cost for all comprehensive products is $27.73 per member per month.
Touchstone is one of several newer venture-backed firms in this segment of the health plan market.
John van Steenwyk’s authoritative Rating and Underwriting for Health Plans is an engaging and execution-oriented guide to this functional area.
Eight of the thirteen publicly-traded health plans announced earnings last month. AMERIGROUP Corporation saw operating income increase 147.4% to $38.2 million, while Centene experienced a 46.9% increase in total revenues to $727.7 million. Coventry Health Care reported increased Medicare Advantage revenue of 160.4% while Humana reported a 142.3% increase in net income for the second quarter. Other firms that reported were Aetna, Sierra Health Services, UnitedHealth Group and WellPoint.
Average health plan stocks decreased 0.5% for the month of July. Valuation indicators decreased last month. Since eight of the fourteen plans reported earnings lastmonth and all reported improved performance, it is reasonable to assume the 0.5% decrease in stock price was driven by a more pessimistic outlook. The market as a whole fared worse, however.
Coventry Health Care, Inc. issued a press release stating that it has established an unsecured, $850 million five-year revolving credit facility.
Coventry Health Care, Inc. announced on July 2, 2007 that it had completed its acquisition of Certain Mutual of Omaha Group Health Insurance Business. Coventry Health Care, Inc. signed a definitive agreement on July 9, 2007 stating that they will acquire Florida Health Plan Administration, LLC, owner of Vista Healthplans.
AMERIGROUP Corp. released a statement on July 9, 2007 announcing the retirement of Jeffrey L. McWaters, 50, as CEO effective August 31, 2007. He will remain as chairman, however. James G. Carlson, the company’s President, will succeed him. UnitedHealth Group recently announced that effective July 30, 2007, Judah C. “Jud” Sommer will be senior vice president of Government Affairs.
This month’s insert looks at the background of the PBM industry, prescription drug trends, cost controlling methods used by PBMs, and an analysis of the three leading PBM’s.
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