PacifiCare Health Systems Inc., Santa Ana, has been working to get over a difficult stretch in the past year and a half. Earlier this month, a company official shared with a Wall Street audience what PacifiCare’s been doing.
Gregory Scott, PacifiCare’s chief financial officer, took part in a healthcare conference, sponsored by CIBC World Markets, at the Plaza Hotel in New York.
Scott gave his presentation on several aspects of the managed healthcare service provider’s business. In terms of what it called “top-level strategy,” PacifiCare is looking at:
–Near-term corrective action programs in its traditional health maintenance organization business.
–Building infrastructure necessary to support expansion of its health insurance portfolio.
–Expanding its scope to offer services beyond traditional health insurance.
PacifiCare has launched Medicare supplemental insurance and a preferred provider organization as a way to broaden its business. A two-tier health maintenance organization and women’s health network plan is also in the mix.
In terms of commercial business, Scott’s slides revealed that PacifiCare got between 15% and 17% premium increases on its July through September renewals; launched four new disease management programs and continued exits from unprofitable markets.
Earlier this year, PacifiCare Chief Executive Howard Phanstiel said the company wanted to reduce its reliance on Medicare, which made up a good portion of its revenues. Medicare funding issues have been a bete noire of the managed care industry.
Scott also laid out PacifiCare’s challenges. Those included continuing its business model transition, managing medical costs, Medicare plus Choice reimbursement, stabilizing earnings and the balance sheet, and commercial growth strategy.
On the business model issue, Scott’s slides showed that PacifiCare has seen the rate of hospitals changing their contracts from capitation to shared-risk slow down. Fifty-one percent of PacifiCare’s commercial members and 40% of its Medicare Secure Horizons members were covered by hospital contracts that changed to the new system through Sept. 30.
The presentation, however, noted that physicians haven’t really been following in the shift,80% of doctors are still on capitated rates.
Pot Relative, Obesity Studied
Marijuana usage is commonly identified with a side effect of food cravings, called the “munchies.” But a group of University of California, Irvine, College of Medicine researchers have found that a chemical related to the drug, that exists in the body, may provide effective treatment for obesity and other eating disorders.
A UCI research team found that giving a chemical called oleylethanolamide to rats resulted in a sharp reduction in food intake and decreased weight gain. Additionally, the researchers learned that food-deprived rats had reduced natural amounts of the chemical, suggesting that it plays a role in mediating eating behavior and appetite.
“This suggested to us that OEA is an important regulator of eating behavior and could be a tool to design new anti-obesity medicines,” said Daniele Piomelli, a UCI professor of pharmacology. Piomelli and his colleagues are now looking at finding out how changes in the chemical levels trigger appetite suppression.
Figures from the Centers for Disease Control show that nearly 30% of Americans are considered obese, and that the incidence of obesity has risen by almost 60% since 1991.
OC Heart of Cardiology Matters
Orange County, within the last couple of weeks, has been a hotbed of cardiac conference activity, including the American Heart Association’s Scientific Sessions conference last week (see related story, page 3).
A few days earlier, Hoag Memorial Hospital Presbyterian, Newport Beach, hosted a continuing medical education institute for some 100 cardiologists, cardiac surgeons and internists from California and other states. Hoag’s program was centered on advances in managing heart valve disease.
Live demonstrations, including mitral heart valve repair, from Hoag’s operating room were featured. Drs. Parvin Shah, Hoag Heart Institute’s medical director of non-invasive cardiac imaging and academic programs, and Aidan Raney, the institute’s medical director of cardiac surgery, developed the program.
Bits and Pieces:
Edwards Lifesci-ences Corp., Irvine, said its board of directors authorized the company to repurchase up to 2 million shares of its outstanding stock Dispensing Solutions Inc., Santa Ana, formed a partnership with ePhysician Inc., Mountain View, to equip Dispensing Solutions’ in-office drug dispensing hardware and software with ePhysician applications. The partnership will enable participating doctors to prescribe electronically on a handheld device Hal Hurwitz, chief financial officer of Micro Therapeutics Inc., Irvine, addressed a Wall Street Forum institutional investor conference in New York earlier this month Cardiac Science Inc., Irvine, said several U.S. military agencies purchased 112 of its Survivalink defibrillation machines to use in various facilities. The U.S. Military Academy, West Point, N.Y., was among the buyers.
