profits

WellPoint loses money for Q2, but still pleases investors

Anne Zieger — Fri, 25 Jul 2008 11:47:49 -0400

Giant health plan WellPoint had what most financial types would consider a tough second quarter, with earnings falling 10 percent and its overall profit predictions for 2008 falling. Still, given that these numbers were better than investors were expecting, the company's stock did OK, nonetheless.

WellPoint's second-quarter net income fell to $750.5 million or $1.44 a share, from $835.2 million or $1.35 a share, a year earlier. Meanwhile, WellPoint has cut back its 2008 earnings projections, with the company now forecasting profits of $5.42 to $5.57 a share rather than $5.42 to $5.67. (While that's a small difference on the top end, every trim-back hurts, particularly on the Street.)

WellPoint CEO Angela Braly said that the lower forecast comes from bigger drops in enrollment in its commercial plans than it had expected. In fact, the company expects health-plan enrollment to fall by 150,000 in the second half of this year. She also noted that recent settlements with California regulators over its rescission policies for individual policy-holders have had an impact.

That being said, executives were able to point to some successes. For example, WellPoint cut its backlog of medical claims by 23 percent from the end of 2007, sped up its claims-paying system and revised its premiums to make sure it won't be taking big medical losses in the future, they said.

To learn more about WellPoint's financial performance:
- read this Wall Street Journal piece (sub. req.)

Related Articles:
WellPoint pays hospitals $11.8M to settle bills from rescissions
WellPoint profits fall 25 percent during first quarter

ALSO NOTED: For-profits see bad debt drop during first quarter of '08; Bayer fined $16.2 million for price-fixing; and much mor

Thu, 29 May 2008 06:59:50 -0400

> As it turns out, for-profits actually saw bad debt expense go down during the first quarter of this year despite nasty market conditions. FierceHealthFinance

> Bayer has been fined $16.2 million for fixing prices on aspirin and other over-the-counter meds in Germany. FiercePharma

> Think health IT will cut big costs from the healthcare system? Don't count on it, says the Congressional Budget Office. FierceHealthIT

> Studies suggest that a new vaccine and chemotherapy combo could significantly prolong the survival of patients with glioblastoma, the aggressive brain cancer afflicting Senator Ted Kennedy. FierceVaccine

And Finally... Why bother creating it? Well, why not? Article

Kaiser net income drops 64 percent

Tue, 06 May 2008 06:59:58 -0400

Oh, the dismay and rendering of garments that must be taking place in health plan boardrooms of late! Profits have taken a dramatic turn for the worse within several health plans, including UnitedHealth Group, Humana, Cigna, WellPoint and Health Net, reporting big drops for the first quarter of this year. (Interestingly, they all seem to be attributing losses to different causes, rather than some general malaise affecting the health plan industry as a whole.)

Now, Kaiser Foundation Hospitals and Health Plan continues spreading gloom and doom, announcing that it saw a 64 percent drop in net income during the first quarter of this year compared to the same quarter last year. It blamed investment losses for the drop, a plunge from $698 million during the first quarter of last year to $250 million for the first quarter of this one. Kaiser did increase operating income, however, from $521 million during the first quarter of last year to $545 million this year, a boost that includes the addition of 25,000 members this year.

To learn more about Kaiser's results:
- read this East Bay Business Times article

Related Articles:
UnitedHealth suffers financial setback
WellPoint profits fall 25 percent during first quarter
Cigna first-quarter profits drop 80 percent

ALSO NOTED: Provider bad debt expected to rise; Three-quarters of states developing health info exchanges; and much more...

Wed, 30 Apr 2008 06:59:50 -0400

> Analysts are predicting that with health plan profits shrinking, premiums will rise, consumers will be expected to carry more of the bill, and providers' bad debt will rise. FierceHealthFinance

> A new report concludes that 75 percent of states are developing healthcare information exchanges. FierceHealthIT

> It's looking like a new form of gene therapy may help improve the sight of the blind. FierceBioResearcher

> One Illinois hospital is offering to boost its charity care levels dramatically in an effort to get permission to relocate its campus. Article

And Finally.. A technique more commonly used in criminal investigations may someday help your hospital fight infections. Article

HMA to raise $400M from hospital, stock sales

Fri, 22 Feb 2008 06:59:58 -0500

Health Management Associates plans to begin selling off some of its hospitals, as well as minority stakes in the company, to reduce its outstanding debt, the company told stock analysts this week. The company, which shared its plans during a conference call held to discuss its 2007 results, said it was likely that HMA would announce some sales during the first half of 2008. Meanwhile, it's probably going to pitch minority interest deals to physicians, which could certainly help foster the tight doctor relationships it's hoping for.

During the conference, HMA announced that it earned $12.5 million during the fourth quarter of 2007, up from a $56.2 million loss during the same quarter in 2006 prompted by a $200 million set-aside for bad debts. For the year, profits were $119.9 million, down from $182.7 million in '06. Revenue grew 8.4 percent to $4.39 billion.

To learn more about HMA's plans:
- read this Modern Healthcare article (reg. req.)

Related Articles:
HMA adopts tougher collections strategy. Report
Financial problems for Health Management Associates. Report

Community Health expects less '08 revenue

Fri, 22 Feb 2008 06:59:56 -0500

Hospital chain Community Health Systems is expecting to make a healthy profit in 2008, but expects to take in less revenue this year than it originally had projected. The company, which just released 2008 profit guidance to Wall Street, expects to make between $2.25 and $2.45 per share on revenue of $11 billion and $11.3 billion. If it hits these targets, that would mean a raise in revenue of 4.5 percent to 5.5 percent. Still, that's less than the boys on Wall Street predicted, so the company's stock fell on the announcement. It's kind of perverse, though, given that still making good profits on lower income suggests a smart management team, not failure!

Along the way, the company--now the largest publicly-traded hospital operator in the U.S.--just agreed to sell its interest in Dublin-based Beacon Hospital. It still operates, owns or leases 125 hospitals in 28 states.

To learn more about Community Health's outlook:
- read this Associated Press item

Related Articles:
Community Health buys Triad, creating U.S. leader. Report
Community Health becomes second largest for-profit hospital chain. Report
Community Health discloses further federal scrutiny. Report

LifePoint hospitals sees 30% profit drop for '07

Mon, 11 Feb 2008 06:59:57 -0500

It seems that LifePoint Hospitals took a beating in fiscal 2007. The Brentwood, Tenn.-based chain said that despite raised revenues, profits fell 20 percent, undermined by volume losses of 15 percent in six of its markets and a rise in bad debt to 16 percent. For the fourth quarter of fiscal '07, the company reported profits of $30.6 million on revenues of $658.4 million, compared with $38.4 million in the fourth quarter of fiscal '06. For the year, things looked worse. Despite a revenue increase of 9.7 percent, to $2.63 billion, profits fell 30.2 percent to $102 million in 2007, compared with profits of $146.2 for fiscal '06.

In addition to bad debt, other factors that helped sink profits included a late starting flu season, the loss of physicians from hospital medical staffs, and the closing of unprofitable service lines. Also, some of LifePoint's Southern states reported fewer seasonal residents.

To learn more about LifePoint's financials:
- read this Modern Healthcare piece (reg. req.)

Related Articles:
LifePoint shareholder calls for changes. Report
LifePoint, Triad offer earnings guidance. Report
HCA sees bad debt rising until patients get insured. Report

HCA sees debt rising until patients get insured

Fri, 08 Feb 2008 06:59:56 -0500

HCA is telling federal lawmakers and officials a grim story. Unless federal authorities expand coverage of uninsured patients, it expects to see bad-debt expenses keep rising at 18 percent to 20 percent per year. Its bad-debt expenses for the fourth quarter of 2007 was 13.2 percent of revenue, about 21 percent more than the 10.9 percent level it reported for the fourth quarter of 2006. Meanwhile, bad-debt expenses for all of 2007 were 11.7 percent of revenue, up from 10.4 percent in 2006. Taken as a whole, bad-debt was fueled not only by uninsured patients, but also lower collections on patient accounts and annual increases in HCA's gross prices.

All of these debt issues have made an impact on HCA's profitability. Profits for 2007 decreased by 15.9 percent, to $874 million from $1.04 billion in 2006, despite a revenue increase of 5.4 percent to $26.86 billion. The picture might have been worse if HCA hadn't gotten $661 million for the sale of three hospitals in 2007.

To find out more about HCA's situation:
- read this Modern Healthcare piece

Related Articles:
HCA income up, but bad debt still significant. Report
HCA profits fall, smacked down by debt payment. Report
HCA to pay $20 million to settle shareholder suits. Report
Shareholder lawsuits seek to block HCA buyout. Report
HCA settles suit attempting to block the sale of the company. Report

HHS advisories give guidance on doctor gain-sharing

Thu, 07 Feb 2008 06:59:55 -0500

With the release of two new advisory opinions by HHS, it's clearer now how hospitals can share cost savings with doctors without running afoul of regulators. One of the two opinions address address anesthesiologists, and the other a group of cardiac surgeons. In both cases, HHS approved arrangements that rely on clinical and historical data for norms to meet, to make sure physicians aren't shaving costs in a way that could undercut care or get rewards that more or less add up to kickbacks.

For example, in the opinion dealing with the anesthesiologists, the HHS opinion permits the anesthesiologists to use a less-expensive catheter when clinical appropriate during surgeries. Since data suggests that it would be clinically appropriate 90 percent of the time, the HHS plan forbids them from profiting for using them more often than that. HHS has placed a similar importance on historical and clinical data when it accepted prior plans, only 10 of which have been approved since 2001.

That being said, it's still important for hospitals and physicians to get explicit approval for their gain-sharing plans, experts say. If parties go ahead with an arrangement that HHS doesn't like, they're still facing legal problems even if a hospital withholds payments to physicians.

To learn more about this issue:
- read this Modern Physician piece

Related Articles:
HHS OKs hospital/physician gainsharing. Report
CMS seeks rural hospitals for gainsharing program. Report
HHS gives health centers an anti-kickback break. Report
Group says Stark rules unfair to for-profits. Report
VHA: Stark issues More common than execs think. Report

Kaiser hospital admin steps down

Tue, 29 Jan 2008 06:59:55 -0500

The administrator at Kaiser Permanente's Fresno hospital stepped down yesterday, days after CMS issued a report highly critical of the way her administration handled the issue of a rogue perinatologist implicated in two infant deaths. The CMS report, issued last week, suggested that if the hospital had done more to supervise Dr. Hamid Safari, a perinatologist accused of gross negligence by the state medical board, the two infant deaths attributed to to Dr. Safari might not have taken place. The administrator, Susan Ryan, had originally responded to the CMS report by defending the hospital's quality oversight, and said that it had taken appropriate steps to supervise Dr. Safari.

To learn more about this issue:
- read this Los Angeles Times piece

Related Articles:
CMS censures Kaiser hospital for dodging complaints about MD. Report
Kaiser profits more than double. Report
Kaiser faces patient dumping charges. Report
Kaiser fined $2 million for transplant problems. Article
Kaiser employee blows whistle on potential $7B loss. Article
Kaiser controversy fells top exec. Article