NU Online News Service, Aug. 8, 10:25 a.m. – Aetna Inc., Hartford, is reporting $11 million in net income for the second quarter on $6.5 billion in revenue, down from $110 million in net income on $6.7 billion in revenue for the second quarter of 2000.
But the managed care company is reporting a $96 million operating loss for the latest quarter, down from a $36 million operating profit.
The operating results exclude $40 million in gains on investments sold during the quarter and $61 million in savings on discontinued products.
Aetna executives are attributing the problems with the managed care operations to an increase in medical costs for commercial health maintenance organization members, Medicaid members, and members of a few large indemnity and preferred provider organization plans.
Aetna is trying to strengthen the managed care operations by improving the way it runs them and going after more midsize and national accounts, the company says.
The Aetna managed care operations lost $35 million on $5.6 billion in revenue for the latest quarter, after earning $99 million on $6 billion in revenue for the second quarter of 2000.
Major medical membership fell 5%, to 18 million.
The average major medical member generated $2 in losses for the quarter and $309 in revenue for the latest quarter, down from $5 in earnings on $308 in revenue.
Aetna sells group benefits products and pension services as well as health insurance.
The large-case pension unit earned $10 million for the latest quarter on $446 million in revenue, compared with $14 million on $259 million in revenue.
The group insurance unit earned $38 million on $422 million in revenue, compared with $48 million on $408 million in revenue.