Unitedhealth Bulks Up for Prescription Drug Benefits
Posted on: Sunday, 10 July 2005, 03:00 CDT
MINNEAPOLIS - Medicare's new prescription drug benefit begins next year, and UnitedHealth Group Inc. is spending billions to get ready.
UnitedHealth, the nation's second-largest health insurer, plans to buy PacifiCare Health Systems Inc. in a cash-and-stock deal worth $8.1 billion. The company also would pay off PacifiCare's $1.1 billion debt under the deal announced Wednesday.
Cypress, Calif.-based PacifiCare has jumped out as a leader in the Medicare market. Its Secure Horizons plan, which includes drug discount cards for seniors and other Medicare-related products, has 700,000 members. PacifiCare is already the nation's second-largest private administrator of Medicare health plans after Kaiser.
The market is about to get a lot bigger - the new drug benefit is expected to cover 11 million low-income older and disabled people.
"There's quite a few millions of lives up for grabs here," said analyst Sheryl Skolnick of Fulcrum Global Partners. "You've just doubled the odds of having significant market share for United."
Minnetonka-based UnitedHealth has built a reputation as a cost- conscious, efficiency-minded insurer. It has pressed doctors to shift to electronic billing and has experimented with giving patients financial incentives to use cheaper doctors. Investors have rewarded it. Over the past five years, its shares have climbed from a split-adjusted $10 a share to more than $50.
UnitedHealth insures about 22 million people and administers health plans for 33 million more. PacifiCare covers nearly 3.2 million members of health plans and about 11.3 million members of specialty plans covering such things as dental care and behavioral health.
UnitedHealth members are concentrated in the Midwest and on the East Coast. But the combination with PacifiCare will give UnitedHealth about 3.2 million California members, 2.6 million Texas members and about 900,000 in Colorado, Chairman and CEO Dr. William W. McGuire said in a conference call with analysts.
PacifiCare said the merger would give its members, many of whom are elderly, nationwide access to health care, cheaper prescription drugs and other services.
UnitedHealth's network covers more than 4,500 hospitals and 460,000 doctors and other health care providers.
The companies see Medicare services as a growth market and predicted that government-funded health care will continue to increase.
Source: Augusta Chronicle, The
Related Articles
- Recently Approved Onglyza Is Covered by 44 Percent of Commercial Health Plans But Less Than One Percent of Medicare Plans for The Treatment of Type 2 Diabetes
- MarketsandMarkets: Global Home health Care Market Worth US$159.6 Billion by 2014
- Health Plan One Launches Enhanced Web Site for Medicare Plans
- Audio: Kaiser Permanente is Colorado's Top Commercial and Medicare Plan on U.S. News & World Report/NCQA 'America's Best Health Plans' List
- Gorman Health Group and Brainshark Team Up to Provide Medicare Plan Sponsors and Other Healthcare Industry Players With Enhanced Medicare Training Programs
- AvMed Health Plans' Care Management and Health Improvement Programs Receive Quality ``Distinction'' Award From NCQA
- New Publication Helps Older Pennsylvanians Choose a Medicare Managed Care Plan
- CORRECTING and REPLACING Health Net Expands Medicare Plan Offerings; Nearly 100 New Plans Key To Company's Cost-Effective Prescription Drug Coverage
- Annual Study of California's Health Care Market Finds Continued Decline in HMO Enrollment and Growth in Pay for Performance -- But Few Fireworks
- CVS to Offer Prescription Services to UnitedHealth Medicare Beneficiaries
 |
 |
User Comments (0)
RSS Feeds