Medicare,a big driver of UnitedHealth Group Inc.’s $9 billion buy of Cypress-based PacifiCare Health Systems Inc. in late 2005,figured into fourth-quarter profits at the Minnesota health insurer.
UnitedHealth released results earlier this month, minus some numbers pending the resolution of its look into stock option grants.
The company earned $1.2 billion in the quarter, beating Wall Street’s expected $1.1 billion. Revenue came in just below expectations at nearly $18.2 billion.
To the Medicare issue, UnitedHealth said enrollment in its Medicare Part D programs, which help seniors pay for prescriptions, totaled 5.74 million people at the end of December.
But UnitedHealth cut its forecast for growth in its full-service Medicare Advantage health plans for the first quarter because of marketing issues.
UnitedHealth now expects to add about 20,000 members to Medicare Advantage, well short of a prior forecast of about 90,000. Overall, the company said it should add 80,000 to 100,000 members to Medicare Advantage this year.
“Our shortcomings in this area are due more to our own lack of marketing execution than any real broader market dynamic,” UnitedHealth Chief Executive Stephen Hemsley said on a conference call.
Medicare Advantage plans generally result in far more revenue per member than the plans that offer just prescription drug benefits.
Investors may be more concerned about UnitedHealth’s options ordeal, which has been one of the more notable nationally.
Carl McDonald, a managed care analyst with CIBC World Markets, suggested in a research note that UnitedHealth’s stock performance “probably hinges less on the quarter itself and more on what kind of an update United provides around its long-standing options inquiry.”
The market, McDonald said, “is simply looking for one of two data points that suggest United is making progress in putting the option situation behind it.”
The company faces a formal Securities and Exchange Commission probe and is revising past years’ financial results to account for the cost of improperly backdated options. The estimated charge to prior earnings is more than $600 million.
The company’s fourth-quarter report left out several year-over-year comparisons because of the pending review.
UnitedHealth, whose previous chief executive William McGuire was forced out over the options issue, withdrew its earlier financial reports because operating costs didn’t correctly reflect compensation expenses related to the option grants.
Allergan Rolls Out Botox Partner
Juv & #233;derm, Allergan Inc.’s wrinkle remover acquired in last year’s $3.2 billion buy of Inamed Corp., now is selling nationwide, the Irvine-based drug maker said earlier this month.
Commercials for Juv & #233;derm recently started airing.
The rollout is a follow-up to an “experience trial” involving cosmetic surgeons that started in the fall.
Allergan’s looking to sell Juv & #233;derm alongside its flagship Botox wrinkle remover, which targets the upper part of the face. Juv & #233;derm is for the lower part of the face.
The drug maker plans an advertising push aimed at consumers for Juv & #233;derm, Allergan Chief Executive David Pyott told the Business Journal in an earlier interview.
Juv & #233;derm’s marketing campaign is designed to put the brand “into the household consciousness of America,” said Robert Grant, president of Allergan Medical, the division Juv & #233;derm falls under.
Hoag, CHOC Team Up
Hoag Memorial Hospital Presbyterian and Children’s Hospital of Orange County are getting together to expand pediatric care and services in the coastal area.
Hoag signed an affiliation pact with CHOC. Under the deal, Hoag plans to expand its outpatient pediatric services and create an expedited system of evaluating and transferring children with critical illnesses and special needs to CHOC in Orange.
Hoag’s pediatric patients and their families would have “more convenient and consistent access” to specialized care, Hoag Chief Executive Richard Afable said.
The deal also calls for CHOC to start pediatric specialty clinics at Hoag Health Center-Newport Beach, an outpatient facility in development near Hoag’s campus in Newport Beach.
In addition, UrgiKids, an after-hours pediatric urgent care facility that’s now in Costa Mesa, is set to move to Hoag Health Center-Newport Beach.
Bits and Pieces:
Advanced Medical Optics Inc. of Santa Ana followed its big deal for IntraLase Corp. earlier this month with a smaller one, spending $20 million for WaveFront Sciences Inc., an Albuquerque, N.M.-based maker of diagnostic devices used for refractive eye surgery and medical research Sun Healthcare Group Inc., an Irvine operator of nursing homes, said Keith Pennell resigned from its board. Pennell’s resignation comes with the sale of 1.8 million shares of Sun’s stock by DFW Capital Partners LP to an unnamed institutional investor without director nomination rights Visiogen Inc., an Irvine company that’s developing Synchrony, a replacement lens for cataract surgery, said the Food and Drug Administration approved a full expansion of its third-phase clinical trial The Eye Care Center at the Southern California College of Optometry in Fullerton said it introduced an optical coherence tomography system that is expected to improve the detection, diagnosis and management of eye disease Alacer Corp., a maker of nutritional supplements, opened a new headquarters and production facility in its hometown of Foothill Ranch.
