MINNETONKA, Minn., April 1 /PRNewswire/ -- Today Medica announced 2003 financial results that showed an operating income of $34.9 million, or 1.5 percent of Medica’s total revenue of $2.33 billion. These results reflect an increase in membership of 12 percent to 1.1 million, the largest single increase in a decade. Premium reserves were 2.6 months compared with 2.2 months in 2002. These financial results are based on Medica’s 2003 consolidated operations, which include its HMO, preferred provider organization (PPO), insurance company and self-insured products.
Reflecting national and statewide trends, Medica’s medical care costs on a per member basis increased only 4 percent, a significant slowdown from the double-digit increases seen in recent years. As a result, Medica’s weighted average premium (per member per month) increased only 5.99 percent. This is also due, in part, to the selection of leaner benefit packages and lower cost networks. That increase is nearly 34 percent less than Medica’s 2002 increase of 9.04 percent and is also well below the 2003 industry average of 9 percent. This is the second year in a row that Medica’s premium rate increases have been below industry average.
“Medica was the first Minnesota health plan to acknowledge the slowdown in medical cost increases and aggressively take action to share those savings with customers,” said David Tilford, president of Medica. Early in 2003, Medica adjusted its pricing strategy and in December, took the unprecedented step of offering a premium and administrative fee holiday to customers. “These results also demonstrate that Medica is having success in controlling some health care costs and those savings are being shared with our customers and members,” said Tilford.
Medica’s efforts to contain health care costs include the promotion of generic drugs, incentives for healthier lifestyles and improved disease management programs. Medica has saved about $20 million overall by encouraging the use of generic drugs.
As a percentage of revenue, Medica’s administrative expense in 2003 was 9.2 percent, a slight increase over 2002. This increase is due in part to the premium holiday given to members in December 2003, which reduced overall revenues for Medica. In addition, increased assessments from the Minnesota Comprehensive Health Association (MCHA) impacted administrative expenses, as did a donation to the Medica Foundation.
These results are from Medica’s entire health plan business, while most other Minnesota health plans report on only their HMO operations. Medica is planning to take steps next year to more closely align its reporting with the rest of the industry.
About Medica
Medica is Minnesota’s largest HMO, largest PPO and leading non-profit and independent provider of health plans. Medica currently has 1.2 million members and 24,000 providers in a regional health care network service area that includes 98 percent of Minnesotans and a growing number of adjoining counties in Wisconsin, North Dakota and South Dakota. Medica also offers national network coverage to employers who also have employees outside the Medica regional network.
Medica has the highest accreditation status, Excellent, from the National Committee for Quality Assurance (NCQA(R)) for its Minnesota and North Dakota Medicaid HMO plans and commercial health plans. Medica’s vision is to become the community’s health plan of choice, trusted for its integrity, respected for its service, and admired for its commitment to innovation and efficiency.
Medica
CONTACT: Larry Bussey, Communications Director of Medica,+1-952-992-8013, or Cellular, +1-612-309-8896, lbussey@medica.com
Web site: http://www.medica.com/
