Guest guest Posted October 20, 2011 Report Share Posted October 20, 2011 Your Daily Posterous Spaces Update October 20th, 2011 Cash Checks + Never Write Checks = Insurance Company's Business Model: UnitedHealth Raises Outlook but Expresses Caution - WSJ.com<http://ptmanagerblog.com/cash-checks-never-write-checks-insurance-comp> Posted about 23 hours ago by [image: _portrait_thumb] Kovacek, PT, DPT, MSA <http://posterous.com/people/1l1oCkDWEWjv> to PTManager<http://ptmanagerblog.com> [image: Like this post]<http://posterous.com/likes/create?post_id=76120397> UnitedHealth Raises Outlook but By JON KAMP<http://online.wsj.com/search/term.html?KEYWORDS=JON+KAMP & bylinesearch=true> UnitedHealth<http://online.wsj.com/public/quotes/main.html?type=djn & symbol=UNH>G\ roup Inc. again reported better-than-expected quarterly earnings and raised its annual outlook as it continued to benefit from muted health-care usage, but the health insurer also warned that conditions could get tougher. The Minnetonka, Minn., company tempered its strong 2011 view with some cautious early comments on next year, when factors like investments in the business and costs pegged to the U.S. health-care overhaul are expected to apply pressure. UnitedHealth also noted it's seen " a modest increase " in doctors office and outpatient visits, although health-care usage remains below historical trends. " We are realistic about the challenging current market environment and the challenging earnings comparisons we will face in 2012, " said Hemsley<http://topics.wsj.com/person/h/stephen-j-hemsley/592>, president and chief executive of UnitedHealth, on a conference call Tuesday. UnitedHealth is the largest managed-care firm by revenue and the first to report quarterly results. The industry bellwether's shares traded down 4.5% to $44.51 in early afternoon trading Tuesday on the New York Stock Exchange, and shares of some competitors also slipped, with WellPoint<http://online.wsj.com/public/quotes/main.html?type=djn & symbol=WLP>Inc. declining 1.9% to $64.32 and Aetna <http://online.wsj.com/public/quotes/main.html?type=djn & symbol=AET>Inc. declining 2.1% to $36.72. Health insurers have steadily benefited as economic turmoil slowed the pace of doctors' office and hospital visits, which means patients aren't racking up as many bills for insurers to cover. Mr. Hemsley voiced optimism for the company's growth prospects, but he also took a cautious, early view about potential upcoming challenges, including expectations for medical utilization to return to more normal levels in the fourth quarter and next year. The company also is making investments for compliance and readiness regarding the health-care overhaul law and is expecting continued low premium rate increases from government-sponsored benefits programs, among other pressure points. " What we're trying to do is try to prudently lay out the challenges for 2012, " Mr. Hemsley told analysts. The company didn't give any 2012 guidance figures Tuesday and plans to issue its outlook at a late-November investor conference. Meantime, the view remains bright for the current year. UnitedHealth on Tuesday raised its full-year earnings forecast to a range of $4.40 to $4.45 a share on revenue exceeding $101 billion, up from $4.15 to $4.25 and a target at $101 billion, respectively. Analysts had forecast earnings of $4.37 a share on sales of $101.51 billion. That marks the third time this year UnitedHealth raised its annual forecast. For the recent quarter, UnitedHealth reported a profit of $1.27 billion, down from $1.28 billion a year ago. Earnings on a per-share basis rose to $1.17 from $1.14 a share a year earlier, but the latest quarter was helped by the repurchase of nearly 18 million shares and lower taxes. Revenue improved 6.8% to $25.28 billion. Analysts polled by Thomson Reuters expected per-share earnings of $1.12 on revenue of $25.44 billion. UnitedHealth's medical-loss ratio, which reflects the portion of insurance premiums used for patient care, rose to 80.7% in the recent period from 80.1% a year earlier. The ratio declined from 81.4% in the second quarter and was below the level some analysts expected, indicating lower-than-expected medical costs. But UnitedHealth signaled some increasing usage, raising questions for coming months. Specifically, the company noted " a modest increase in utilization trends in outpatient and physician office-care settings " for the insurance business serving employers and individuals. Leerink Swann analyst Gurda said this commentary " could create some controversy for the shares. " Revenue in the UnitedHealthcare insurance business rose 6.1% to $23.64 billion from a year ago. The operating margin there declined slightly—which UnitedHealth said was expected—amid the initiation of premium rebate obligations for this year. Low premium-rate increases in state Medicaid programs also weighed on the operating margin. Health insurers have to meet new minimum requirements for medical-cost ratio this year or provide rebates for falling short. Revenue from Optum, UnitedHealth's information- and technology-based health-services business, jumped 22%. Earnings for operations for that business grew a more modest 3%, however, amid " changes in business mix and internal business and service realignments, " the company said. UnitedHealth is spending ahead of plans in 2013 to bring in house the pharmacy-benefit business currently served by Medco Health Solutions<http://online.wsj.com/public/quotes/main.html?type=djn & symbol=MHS>Inc.\ , which is shedding its largest customer amid plans to be purchased by competitor Express Scripts<http://online.wsj.com/public/quotes/main.html?type=djn & symbol=ESRX>Inc. UnitedHealth said the transition will add more than 12 million commercial members to its OptumRx pharmacy-benefit business on a " staged basis " in 2013. Elsewhere, the company said medical membership at its UnitedHeathcare insurance business increased to nearly 34.4 million, up 5% from a year earlier. via online.wsj.com<http://online.wsj.com/article/SB100014240529702043461045766391432\ 29555626.html> Cash Checks + Never Write Checks = Insurance Company's Business Model [image: Posterous] <http://posterous.com> Want your own?<http://posterous.com> Change your email settings<http://posterous.com/email_subscriptions/hash/gspsqucxgqviGogjvCufJwAxB\ xkgmH> Quote Link to comment Share on other sites More sharing options...
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