Health Plan Weekly

Not one, not two, but three insurtechs that have gone public in recent years reported their first-quarter earnings on May 9 — and each took the opportunity to detail how they’re stepping away from unprofitable parts of their businesses and focusing on ventures that can help put them in the black.

“Oscar is in a very different place than we were a year ago,” newly minted CEO Mark Bertolini said during Oscar Health Inc.’s earnings call.

“A year ago, we were focused on absorbing our increased scale and ensuring that our operations could handle a sizable increase in growth,” continued Bertolini, the former Aetna CEO who left the company after its acquisition by CVS Health Corp. “Today, we are focused on advancing the capabilities and technology to best serve our members and have been able to shift our attention to implementing a series of initiatives aimed at improving the efficiency of our operations.”

Although executives during The Cigna Group’s first-quarter 2023 earnings call put a heavy emphasis on the firm’s evolving PBM business model, Cigna’s ability to control health care costs was a noteworthy —albeit less headline-grabbing — highlight that caught one equities analyst’s eye.

Cigna delivered “the best MLR beat of the bunch,” Jefferies analyst David Windley wrote in a May 8 research note, pointing out that the insurer’s medical loss ratio of 81.3% beat the Wall Street consensus estimate by 60 basis points. For the full year 2023, Cigna expects its MLR to be in the range of 81.5% to 82.3%.

Here’s how major health insurers’ stock performed in April 2023. UnitedHealth Group had the highest closing stock price among major commercial insurers as of April 28, 2023, at $492.09. Humana Inc. had the highest closing stock price among major Medicare insurers at $530.49.

Following a hearing on insulin costs in which senators from both political parties grilled PBM executives, the Senate Health, Education, Labor and Pensions (HELP) Committee approved the Pharmacy Benefit Manager Reform Act of 2023 (S. 1339). The legislation would ban spread pricing, introduce a host of transparency requirements, and compel PBMs to pass on rebates and fees they collect to their health plan clients, Pink Sheet reported. However, HELP Committee Chairman Bernie Sanders (I-Vt.) would not allow a vote on an amendment that would prohibit PBMs from charging administrative fees based on a percentage of a drug’s list price, as that amendment did not yet have a Congressional Budget Office score. The measure passed on an 18-3 vote with Sen. Rand Paul (R-Ky.), Sen. Mitt Romney (R-Utah) and Sen. Tommy Tuberville (R-Ala.) voting no.

Integrated insurer-provider Kaiser Permanente (KP) will acquire Geisinger Health, the Pennsylvania-based integrated health system and health insurance plan, as part of a new Kaiser venture that will aim to take over other regional nonprofit hospital systems. That new venture, Risant Health, will be an independent division of Kaiser and seek to orient its subsidiary hospital systems toward payer-agnostic, value-based reimbursement. Experts tell AIS Health, a division of MMIT, that the deal accelerates and intensifies the ongoing trend of multistate, cross-market hospital system consolidation. 

According to Kaiser spokesperson Stephen Shivinsky, Geisinger is the inaugural member of Risant Health, “a new nonprofit organization created by Kaiser Foundation Hospitals to expand and accelerate the adoption of value-based care in diverse, multi-payer, multi-provider community health system environments….Risant Health will operate separately and distinctly from Kaiser Permanente’s core integrated care and coverage model while building upon Kaiser Permanente’s 80 years of expertise in value-based care.”