BUSINESSMost plans on financial upswingQuick View. Jan. 20, 2003.
The leading U.S. managed care companies generally showed improved stock performance last year, demonstrating the most impressive gains as a group since the mid-1990s. The most successful companies maintained a profitable spread between pricing and costs, dabbled conservatively in mergers and strove to cut overhead. Aetna Inc. repeatedly tightened its corporate belt, shrinking its work force and overhead to preserve profits. Anthem Inc. maintained growth, in part aided by the July 31 acquisition of Trigon Healthcare. CIGNA Corp.'s low indemnity renewal rates, high operating expenses, and underpricing helped spur its slide, especially after mid-year. Humana Inc., to bolster its commercial business and lay the groundwork for faster growth, announced it would cut 17% of its work force. Oxford Health Plan Inc.'s increase in revenues was overshadowed on paper by a $151.3 million cash pretax charge for the third quarter, in connection with an anticipated settlement of securities litigation. PacifiCare Health Systems saw net income rise and sought to maintain profits by replacing lackluster managed care products and choosing markets more selectively. United Health Group expanded its managed care customer base, improved efficiencies in its systems and trimmed costs. WellPoint Health Networks Inc. benefited from good cash flow and increased control of administrative expenses and completed a merger with RightCHOICE, the BlueCross BlueShield licensee serving Missouri. The stock in February split two-for-one; the Jan. 1 figure reflects the split-adjusted price. Copyright 2003 American Medical Association. All rights reserved.
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