Aetna's Reports 1st Quarter 2011 Profits Are Up 4%–Membership Down Almost a Million
Posted Apr 29 2011 1:18am
You can read below that membership is down about a million but profits are up. IN addition you can see where they are buying Prodigy Health Group which is a contracted company that runs the benefit departments for employers. Below are a couple of examples to where they have pulled out of selected markets both here and over seas. Claims were down as people didn’t go to the doctor as was also stated by Wellpoint in their earnings call.
In addition companies today are changing their business models and algorithms that is is difficult for our lawmakers to keep up and judges today can seem to keep track of potential conflicts of interest as it appears there’s maybe not enough attention directed in that area too as we read it in the news today quite often and we have transparency to thank for that.
Aetna has also been particularly aggressive in buying up Health IT companies, similar to what United Healthcare has been doing for years, buy up those algorithms that make money.
In addition you can see the move here with medical records to create a “cloud” atmosphere to host medical records in Puerto Rico from November of last year. I think in addition to aggregation and HITEC, medical record vendors stand to be a pretty good target for insurers in the next couple of years so they can own it all. This is exactly the type of area where judges get in trouble as not keeping on top of acquisitions that are outside the “known” or “familiar” areas of operation. The company also lost out on a bid for Tri-Care business speaking of conflicts of interest when submitting their proposal for the northeast, which went back to HealthNet for part of it and when the contract was announced for Aetna, HealthNet being a smaller carrier had to sell off some of their northeast business right away to United, but the tables turned around for Healthnet, again the conflict of interest occurrences that happen with today’s rocket speed mergers and acquisitions. BD
INDIANAPOLIS -- Aetna Inc. said Thursday its first-quarter profit rose 4 percent, as it became the fourth big health insurer in the past week to report better-than-expected earnings and raise its 2011 profit forecast.
The Hartford, Conn., company said health care costs fell and it recorded a $174 million gain in the quarter because claims left over from previous quarters came in below expectations due to lower-than-projected care use.
Several health insurers have said slower-than-expected growth in health care use _ caused in part by bad weather _ has helped them in recent quarters. Aetna is the third largest commercial health insurer behind WellPoint and UnitedHealth. Both of those companies and Humana Inc. have already reported first-quarter results that topped Wall Street expectations and raised their 2011 earnings forecasts.
It said medical membership fell to 17.8 million people from 18.7 million in last year's first quarter, as it saw losses mainly in its commercial business, which includes employer-sponsored group coverage and individual plans. That led to a 2 percent drop in health care premiums, the largest portion of Aetna's revenue.
The insurer also said Thursday it will spend about $600 million to buy Prodigy Health Group, a privately held company that administers self-funded health plans for companies with between 100 and 5,000 employees. In self-funded plans, the employer pays the claims and assumes the risk.