NU Online News Service, Jan. 21, 3:49 p.m. – The managed care industry will have another solid year in 2003, with expanding profit margins pushing net income up 16%, according to a forecast by Corporate Research Group Inc., New Rochelle, N.Y.
Premium rates are going up faster than medical expenses, and use of technology is also helping to boost margins by lowering administrative costs, Corporate Research says.
The firm predicts that profit margins will reach 2.4% at all managed care companies this year, up from 2.2% in 2002, and that net margins will be even higher at publicly traded companies.
Industry revenue will increase 7%, to $213 billion, Corporate Research predicts.
“The managed care industry is on a roll,” says Carl Mercurio, the president of Corporate Research. “Industry profit margins should expand through 2005.”