NU Online News Service, Nov. 13, 2003, 5:59 p.m. EST – Managed care companies will continue to report strong profits and “not too many surprises” in the fourth quarter, predicts Sheryl Skolnick, a stock analyst with Fulcrum Global Partners, New York.
“Typically, there’s not a lot of membership growth in the fourth quarter,” Skolnick says. “You see more renewals than new members.”
But profits will remain good because, in most cases, demand for medical services also falls, she says.
Use of medical services is often low in October and November, then rises in early December, as employees schedule doctor visits to beat increases in co-payment levels that take effect after the start of the new plan year, Skolnick says.
But many people avoid going to the doctor over the holidays, and people who are worried about their jobs because of the slow economy may postpone elective procedures, she notes.
This year, Skolnick says, the increase in use in December may only partly offset the decrease of use in October and November.
Another factor putting the skids on costs is that many established prescription drugs are soon converting to over-the-counter or generic status, Skolnick says.