Aetna
Press Release
February 11, 2003
Aetna Reports Fourth Quarter And Full-year 2002 Results
“In 2002, Aetna improved its financial performance,” said John W. Rowe, M.D., chairman and CEO. “This success was built on a seven-point reduction in the medical cost ratio (MCR), as well as lower administrative costs. This decline in MCR was driven by three factors: reduction of membership with historically higher MCRs … (premium increases)… (and changing contracts and benefits).
Full-year 2002 results for Health Care show operating earnings, excluding other items, of $361.6 million, compared with an operating loss, excluding other items, of ($161.9) million for full-year 2001, primarily reflecting improved underwriting results, driven by an increase in the premium yield and a decline in the medical cost trend, combined with continued reductions in operating costs and a decrease in amortization of intangibles.
“Aetna delivered on its promises in 2002, and we believe the company is now firmly re-established as a top-tier competitor in the health care arena,” President Ronald A. Williams said. “Our broad operational goal for 2003 and beyond is to build on our competitive advantages and grow profitably.”
http://www.aetna.com/news/2003/pr_4thquarter2002_earnings.htm
Comment: Building success on reduction of membership with higher medical cost ratios, and increasing the premium yield with a decline in medical cost trends was accomplished by withdrawing from high cost markets and pricing plans with high cost patients out of the market. Eliminating beneficiaries that actually need health care will allow Aetna to fulfill its goal of building on their competitive advantages and grow profitably.
Should we criticize a corporation for reducing losses and improving profits? No. It is their obligation to their shareholders to do precisely that.
Should we criticize health care policymakers for insisting that we continue to build on this system that thrives by excluding from coverage those with the greatest health care needs? No, criticism is not enough. We need to dismiss them and replace them with policymakers that will design a health care funding system that has a mission of actually meeting the health care needs of all of us.