Health News: Etna Cuts 2009 Outlook On Higher Costs For Health Care
“Etna”, Inc, the third largest health insurer in the United States, reduced its 2009 forecast for operating profit of about $ 3:55 in proportion to the share of order of $ 3.70 $ 3.85 $ 3.95 before it was scheduled.
High medical costs for health care covered by the plan of the subscriber during the recession was the main reason for the revision, Joseph Zubretsky, the chief financial officer in Hartford, Connecticut, the company said today at a conference with analysts. Lower estimated revenue from Medicare, the government of the United States health program for the elderly, but also contributed, he said.
Etna was a victim of its own success, as it is actively developing new markets and new members last year, said Stephen Shubitz, an analyst for Edward Jones & Co based in Des Peres, Missouri. The company said February 12 that it plans to add more than 1.3 million members this year have contributed to new contracts with Depth Inc. and Bank of America Corp.
“Other companies are more stringent with regard to prices of their contracts rather than” Etna “,” Shubitz said today in a telephone interview. “As Aetna has been adding members, he created the potential for that to happen.”
In the difficult economy in late 2008 and early 2009 led to the widespread use of health care to members Zubretsky said at the conference. Etna, on 29 April said that employees who lost their jobs or fear of dismissals to increase treatment. The company introduced a “medical management protocols, that the claims in an attempt to mitigate price increases, he said.
Despite the fact that in their initial estimates, based on the economies of these measures in their earnings forecasts, it is now decided not to enter into these savings will occur, Zubretsky said.
“In these circumstances, we want to adopt a more conservative approach of why we are reducing our forecasts,” he said. “If the management of medical protocols in the field of cost reduction, we will consider an increase.”
Increased costs of health care have undergone major competitors Etna, United Health Group Inc., Minnetonka, Minnesota, Well point Inc. of Indianapolis and in the past year Shubitz said.
Accordingly, he said “the one and Well point did better on pricing their contracts in 2009.”
Etna fell to 7.6 per cent to $ 25.20 at 6:14 pm extended trading on the New York Stock Exchange after it issued a new forecast. The company fell 10 cents to $ 27.27 at 4 hours of closed regular trading.