January 2004

Will managed care continue to enjoy ‘the good times’?

PRNewswire — Managed care will continue to enjoy its “good times” for at least another year, according to 25 managed care chief executives and Wall Street analysts in the Jan. 15, 2004 issue of Managed Healthcare Market Report.

Despite industry concerns over potential price competition, rising costs and employer frustration over double-digit premium increases, most health plans remain upbeat. “We don’t see anything radically different than we’ve seen over the past four or five years,” said Tom Faulds, president of the Blue Cross Division of Blue Cross Blue Shield of South Carolina.

Industry executives recognize the need to develop new products and new options for employers and consumers. “The entire industry is trying to figure out what it’s going to evolve into,” said George Halvorson, chief executive of Kaiser Permanente. Michael McCallister, chief executive of Humana Inc. (NYSE:HUM), added, “The commercial marketplace is going to get real interesting over the next couple of years. Employers are saying ‘enough is enough’” when it comes to rising premiums.

The nation’s largest managed care organizations are expected to show gains in membership, although overall industry enrollment will be flat in 2004. “In order for one company to gain share they have to take it away from one of the other companies,” said David Tilford, president of Medica.

Source: Corporate Research Group, Inc. http://managedcare.corporateresearchgroup.com/

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