Horizon Blue Cross Blue Shield of New Jersey filed its application to for-profit status on August 15th.
Health Care Service Corporation and MEDecision, Inc. announced on August 15th that it had completed the merger in which MEDecision is a wholly-owned subsidiary of HCSC.
Humana announced that it has signed a definitive agreement to acquire PHP Companies, Inc. (d/b/a Cariten Healthcare) (“Cariten) for $245.0 million in cash.
Health plan stocks increased 5.9% for the month of August. Valuation indicators increased last month. Since only four of the fourteen plans reported earnings last month and multiples improved, it is reasonable to assume the 5.9% increase in stock price was driven by more favorable sentiment rather than company fundamentals. On the other hand, the market as a whole increased by 1.2%.
Four of the fourteen publicly-traded health plans announced earnings last month. CIGNA’s net income increased 19.0%, due to growth in nonoperating income. Health Net, Inc. had a 13.1% decline in net income due to higher health benefit ratios, causing EPS to decline 7.9% to $0.74. Humana experienced a 7.6% decline in operating income on a higher HBR despite a 14.4% growth in total revenues. Triple-S Management Corporation had a 41.7% decrease in net income due to a higher HBR, despite a 12.8% increase in total revenues.
Aetna, Inc. has named Rajan Parmeswar as Vice President, Controller, and Chief Accounting Officer, and Gery J. Barry, as Chief Strategy Officer. Aetna also named David S. Memel, M.D. as the Head of Aetna Informatics. Centene Corporation has named Patrick J. Rooney as President and CEO of Managed Health Services (MHS), Centene’s Indiana subsidiary. Humana, Inc. named Marissa T. Peterson as a member of the board of directors. WellPoint, Inc. appointed Krista A. Bowers as President of Senior Business. On August 22nd, the company also announced Lori Beer as Executive Vice President and Chief Information Officer and Martin Miller as Senior Vice President, Chief Accounting Officer and Controller.
This month’s insert measures Sherlock Expense Evaluation Report (SEER) data for evidence of economies of scale. Our study identifies several functional areas where economies of scale are statistically significant. Scale effects are few and small. The study has implications for business process outsourcing and other contractual relationships as well as for business combinations.
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