Managed Care Outlook

Industry profits seen rising again in 2004












The managed care industry is poised for a strong 2004, with profits projected to increase at least 16 percent, according to preliminary findings from "The Outlook for Managed Care, 2004," a report prepared by Corporate Research Group, a health care publisher. Companies expecting to see double-digit increases in profits include Aetna, Coventry, Humana, Mid Atlantic Medical Services, UnitedHealth Group, and WellPoint. The final report is due out in December.

Further, managed care's overall net income, including for-profit and not-for-profit health plans, is expected to be about $6 billion in 2004, based on revenues of about $225 billion, a 2.7 percent net margin. Margins are expected to increase in 2004, through administrative cost cutting and the use of new technology.

"Concerns over rising costs haven't dampened the prospects of the nation's managed care plans," says Carl Mercurio, president and publisher of Corporate Research Group.

SOURCE: CORPORATE RESEARCH GROUP, "THE OUTLOOK FOR MANAGED CARE, 2004"

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