Managed Care

 

Overall, a good climate in 2004

MANAGED CARE February 2004. © MediMedia USA
Managed Care Outlook

Overall, a good climate in 2004

MANAGED CARE February 2004. ©MediMedia USA













Will 2004 be a healthy year for health insurers? Despite a few caveats, the answer seems to be yes, according to a recent report by Standard & Poor's, the big rating agency. Operating performance is expected to be strong this year, thanks to moderating medical costs and rate increases that are forecast to run between 10 percent and 12 percent, on average. That's a bit lower than the 15 percent average seen in recent years.

Nonetheless, the sector is considered to have a more favorable credit outlook.

As of December, 30 health insurers merited a stable rating, compared with 35 the previous year. Yet the number of insurers with positive ratings climbed to eight, up from five. And the number of negative reviews was nearly flat.

"Pricing has, generally, exceeded the underlying cost trends," says Joseph Marinucci,a S&P credit analyst. "On the whole, you can say things are improving."

Certainly, earnings are rising and some insurers are using capital build-ups to make acquisitions. As a notable example of consolidation, he points to the planned merger between Anthem and Wellpoint Health Networks.

But there are a few variables to keep a close eye on. In particular, there's the increasing likelihood of long-term pressures from health care providers, consumers, and employers — a triple whammy, of sorts, with an overt political twist.

As Marinucci points out, it remains possible that state regulators will continue to pressure not-for-profit insurers to keep a lid on rates. This will eventually reverberate up the food chain, forcing price competition on the for-profit insurers.

Meanwhile, class-action lawsuits will continue against several national insurers; the ratings agency doesn't view these as such a big threat now that settlements were reached with some 700,000 doctors last year.

And while the prescription-drug program for Medicare won't have an immediate impact on insurers, the development is a positive. "Initially," says Marinucci, "it will stabilize the marketplace."

SOURCE: STANDARD & POOR'S

Meetings

Private Health Insurance Exchanges Conference Washington, D.C. October 7–8, 2014
National Healthcare Facility Management Summit Palm Beach, FL October 16–17, 2014
National Healthcare CFO Summit Las Vegas, NV October 19–21, 2014
National Healthcare CXO Summit Las Vegas, NV October 19–21, 2014
Innovative Member Engagement Operations For Health Plans Las Vegas, NV October 20–21, 2014
4th Partnering With ACOs Summit Los Angeles, CA October 27–28, 2014
2014 Annual HEDIS® and Star Ratings Symposium Nashville, TN November 3–4, 2014
PCMH & Shared Savings ACO Leadership Summit Nashville, TN November 3–4, 2014
World Orphan Drug Congress Europe 2014 Brussels, Belgium November 12–14, 2014
Medicare Risk Adjustment, Revenue Management, & Star Ratings Fort Lauderdale, FL November 12–14, 2014
Healthcare Chief Medical Officer Forum Alexandria, VA November 13–14, 2014
Home Care Leadership Summit Atlanta, GA November 17–18, 2014