Quarter Profits

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

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Cigna first-quarter profits drop 80 percent

Cigna first-quarter profits drop 80 percent

Fri, 02 May 2008 06:59:58 -0400

Uh oh--this can't be good. A multitude of insurers have have posted rather disappointing financial results, including UnitedHealth Group, Humana, Health Net and WellPoint--and now another big insurer joins the party. Cigna has announced that it saw an 80 percent drop in first-quarter profits over the same quarter last year, with earnings of $58 million this time versus $289 million one year ago. Cigna has been hit by a multitude of factors, including a tough flu season, litigation and the cost of integrating newly-acquired Great-West Healthcare. All that being said, Cigna executives did cite some bright spots in their picture, including a predicted rise of 2 to 2.5 percent in enrollment (excluding Great-West enrollees). But this is still shaping up to be a tough year for U.S. health plans generally. Brace yourself for next year: premiums are likely to shoot up, employees to carry more costs, and providers to get hit with more bad debt. It's a pretty ugly picture all around.

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

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UnitedHealth suffers financial setback
WellPoint profits fall 25 percent during first quarter

WellPoint profits fall 25 percent during first quarter

Thu, 24 Apr 2008 06:59:58 -0400

Yesterday it was UnitedHealth Group in the hot seat, and today it's WellPoint. The health insurance giant said that its first-quarter profits fell 25 percent compared with the same quarter last year. The company reported a drop in net income to $588 million for Q1 of this year, compared with $783 million for the first quarter of 2007, driven primarily by rising medical costs. This news comes despite the fact that revenues climbed 3 percent to $15.6 billion from $15.1 billion, and enrollment went up.

With a growing number of health plans reporting that they're losing ground financially, things are beginning to look bad for the sector as a whole. Generally speaking, that's not good for providers; after all, a health plan's first instinct is to clamp down on reimbursement when things look bad. The next few quarters could be scary for providers that don't have serious negotiating muscle.

To learn more about WellPoint's results:
- read this Business Courier of Cincinnati article

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