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Decreased use improves Q3 profits for top insurers
Several of the nation's largest health insurers--WellPoint, Aetna, and Humana--reported better-than-expected third-quarter earnings, largely because of a decrease in healthcare services, according to the Washington Post.
The utilization slowdown could ultimately be a good thing as the nation grapples with bringing runaway medical spending under control. But experts could grow concerned if it leads, for instance, to Americans cutting back on preventive visits and immunizations, which carry an upfront cost but wind up decreasing spending in the long run, the Wall Street Journal reports.
Aetna CFO Joe Zubretsky said use fell compared with last year in several categories, including inpatient and ambulatory care, possibly because the economy has forced people to put off discretionary or non-urgent care to save money. "We are assuming that utilization comes back to some normal level in the future," he told the Post.
Cigna said growth in outpatient and professional healthcare services was slower than it expected. But people sought out preventive care and maintained their prescriptions during the quarter, so CEO David Cordani told the Post he didn't see signs of "inappropriate" care rationing.
Humana CFO Jim Bloem said the insurer is seeing slightly shorter hospital stays and less intensive or shorter procedures that he attributes in part to better care management, Bloomberg Business Week reports.
"In general, utilization is not in and of itself falling off the charts," said Wayne DeVeydt, WellPoint's CFO. "It's more a function of what you saw last year being abnormally high and this year being normal."
Third quarter results for the insurers are:
- WellPoint (NYSE: WLP) earned $739.1 million, or $1.84 a share compared with $730.2 million, or $1.53, for the same period the previous year--a 1.2 percent increase in net income.
- Aetna (NYSE: AET) earned $497.6 million in profit, or $1.19 a share, up from $326.2 million, or 73 cents, last year. Net income rose 53 percent.
- Humana (NYSE: HUM) earned $393.2 million, or $2.32 per share, up from $301.5 million, or $1.78 per share, a year earlier. Revenue rose 9 percent to $8.42 billion.
To learn more:
- read the Bloomberg Business Week article
- see the Washington Post story
- read the Wall Street Journal article
Related Articles:
Cigna medical enrollment increases while Q3 profits fall
Q3: Top Health Insurance Company Earnings Reports
Humana slammed after posting 65 percent increase in third quarter profits
Comments
Who are these insurance companies kidding. They haven't seen signs of "inappropriate" care rationing. The signs may be appropriate if you're an insurance company and having to pay out when people use their insurance but they are totally inappropriate if one is a health care provider and sees on a daily basis people cutting back on office visits and preventive medicine because their deductible is so high. When is this going to end? When will enough be enough? When is someone going to realize that the insurance companies and their lobbyists are the reason the U.S has the highest mortality rate in the western world. We have the best doctors, the best technology but much of the population can't afford it.
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