Less Healthcare Use Spurs UnitedHealth, Other Insurers

Unexpectedly light healthcare use by patients paid off for managed care companies in the first quarter.

Five large health insurers, including UnitedHealth Group Inc., with 3,800 Orange County employees, reported better-than-expected profits in the first three months of the year.

Several of those companies, including UnitedHealth, said costs were contained thanks to lower use of healthcare insurance.

UnitedHealth, which bought Cypress-based PacifiCare Health Systems Inc. in 2005, posted a first-quarter profit of $1.35 billion, up 13% from a year ago.

Revenue rose 9% to $25.4 billion.

UnitedHealth executives told analysts and investors on a conference call that its medical costs fell because fewer people visited their doctors due to high unemployment and plans that require members to pay a larger share of medical costs.

Healthcare usage may have been slower than expected for several reasons, according to insurance companies and analysts.

Weather may have played a role in some cases.

Severe winter storms and other bad weather kept some patients from obtaining healthcare during the late fourth quarter and in the first quarter.

There’s also the cost factor. Insurance deductibles and co-payments have been rising for the past 20 years, prompting people to watch their spending, Les Funtleyder, healthcare portfolio manager for New York investment bank Miller Tabak & Co., told the Associated Press.

Economic issues also influence healthcare use, according to analysts.

People who worry about losing their jobs often use healthcare more than normal when recessions start because they want to use their employer-provided insurance while they still have it.

Healthcare usage growth then slows after a recession ends because consumers remain budget-conscious and tend to put off procedures like hip or knee replacements, which are sometimes considered elective.

Insurers expect healthcare usage to rise at more normal rates this year, particularly in warmer months when weather isn’t as much of a factor.

The flu season later in the year also stands to drive up usage. And patients with annual deductibles that are paid off in the first part of the year are more willing to use their insurance in the second half because they don’t deal with high out-of-pocket costs.

Cameron Health Trial

Cameron Health Inc., a San Clemente medical device maker, completed enrollment in a Food and Drug Administration clinical study of its implantable defibrillator.

Trial investigators enrolled 330 patients at risk for sudden cardiac arrest at 33 centers in the U.S., Europe and New Zealand.

Cameron is planning to submit data from the trial to regulators later this year to seek marketing approval for its S-ICD device in the U.S., according to Chief Executive Kevin Hykes.

The device received European regulatory clearance in 2009.

S-ICD is implanted under the skin and provides an electric shock to interrupt a potentially fatal heart rhythm during a heart attack. It differs from other defibrillators in that it operates without electrical lead wires within a patient’s veins.

Instead, it directly links to the heart, lessening the risk of scar tissue buildup and fractures.

Cameron, a venture capital-backed device maker, has raised some $85 million in funding. Investors include Natick, Mass.-based Boston Scientific Corp., which also has an option to buy the company.

New Hospital Boss

Tenet Healthcare Corp., a Dallas-based hospital operator with three local facilities, appointed Jeffrey Koury as its senior vice president of operations for California. Koury, who works out of Santa Ana, replaces Jeffery Flocken, who announced his retirement in April.

Koury most recently was vice president of operations, finance, for Tenet California.

In his new job, he oversees strategic development and operations for Fountain Valley Hospital Regional Hospital and Medical Center, Los Alamitos Medical Center, Placentia-Linda Community Hospital and nine other facilities in California and Nebraska.

Flocken, a former chief operating officer for Orange-based St. Joseph Health System, has been with Tenet California since 2005 and was promoted to senior vice president in 2006.

Tenet, which once was the county’s largest hospital operator, sold off many of its local holdings in recent years.

Bits and Pieces

The California Dental Association, a Sacramento-based trade group, drew 26,000 dentists and other dental professionals to Anaheim earlier this week. The convention featured continuing education courses and 600 exhibitors … Lake Forest-based InSight Health Corp. said it signed a multiyear deal to provide mobile positron emission tomography and computed tomography medical scanning services for the Holy Spirit Hospital of Camp Hill, Pa. … Cerna Healthcare Inc., an Irvine home healthcare company, said it launched a service to take care of senior citizens with multiple or complex conditions. Cerna cares for seniors with injuries and brain diseases and operates in Southern California and Dallas. The Pharmacy Quality Alliance presented an award to Orange-based CalOptima’s OneCare prescription drug program. CalOptima oversees publicly funded healthcare coverage for low-income families, seniors and people with disabilities.

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