PACIFICARE: Earnings Surge 41%
PacifiCare Health Systems yesterday reported "higher second-quarter earnings" of $68.9 million, up 41% from $48.9 million. The company noted that "total health care costs as a percentage of premium revenue fell slightly to 85% from 85.1% a year earlier, as lower costs from its commercial plans outweighed higher costs for its Medicare and Medicaid plans." PacifiCare is the nation's largest Medicare HMO provider, Reuters/Los Angeles Times reports, but has been able to staunch losses seen by other Medicare HMO providers by sifting the burden of lower reimbursements to doctors in the form of "fixed fees."
Hospital chain Tenet Healthcare said Wednesday that it lost $137 million, versus $141 million a year earlier, due to "lower Medicare payments and restructuring costs." CEO Barbakow said, "Medicare reimbursement cuts reduced our earnings per share by 20 cents for the year" (7/29).