UnitedHealth Group Inc. (NYSE:UNH) got the latest health insurance earnings season off to a positive start by reporting $1.3 billion in net income for the fourth quarter of 2011 on $23 billion in revenue, up from $1 billion in net income on $22 billion in revenue for the fourth quarter of 2010.
UnitedHealth, Minnetonka, Minn., ended 2011 providing or administering coverage for 35 million people, up from 33 million people a year earlier.
Commercial enrollment increased to 26 million, from 25 million.
The company noted that the minimum medical loss ratio (MLR) requirements in the Patient Protection and Affordable Care Act of 2010 (PPACA) have started to nick at earnings.
The PPACA MLR provisions require carriers to spend 85% of large group revenue and 80% of individual and small group revenue on health care and quality improvement efforts.
At UnitedHealth's UnitedHealthcare unit, the full-year 2011 commercial MLR increased to 80.9%, up from 80.6% in 2010, and the fourth-quarter MLR increased to 82.8%, from 80.9%.
"These increases were driven by premium rebates to certain customers under health care reform and lower levels of reserve development," the company says in a comment on its results.
Health care utilization was unusually low in the fourth quarter of 2010, and a rebound in use of care also contributed to the increase in the MLR, the company says.
Gail Boudreaux, the chief executive officer of the UnitedHealthcare unit, said during the company's earnings call the employers have been focused on more affordable health plans with smaller provider networks, and with plans that incorporate health savings accounts and health reimbursement arrangements.
"Plans that have more consumer responsibility and transparency are selling really well," Boudreaux said.
COST MANAGEMENT: NOT SO EASY
Lyle Nelson concludes in Medicare cost management reports for the Congressional Budget Office that most Medicare pilot projects testing disease management and care coordination strategies failed to do much to reduce the costs.
The fees for the programs that did cut costs — ones that involved care managers working directly with physicians and working with patients in person — exceeded the savings achieved, Nelson says.
Nelson came to those conclusions after reviewing the outcomes of 10 pilot projects that were reviewed by independent researchers.
Similarly, several efforts to bundled payments, rather than paying health care providers separately for each service provided, failed to cut cost. One bundled payment effort cut costs 10%, Nelson says.
AETNA REBRANDS
Aetna Inc., Hartford (NYSE:AET), has introduced a new logo and says it is focusing on associating the brand with moves to increase consumer engagement in their health care and empower people to live healthier lives.
The company is putting its products in 4 categories:
- Quality health plans and benefits.
- Healthier living.
- Financial well-being.
- Intelligent solutions.
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