Conning Research: A Perfect Storm Is Looming In Managed Care Industry

Latest Edition of Conning’s “Managed Care Industry Overview” Sees Dramatic Changes on the Way

(Hartford, CT) December, 2002 – The confluence of several factors is creating a “perfect storm” that will result in dramatic changes in the health care marketplace, according to the latest edition of “Managed Care Industry Overview” from Conning Research & Consulting, Inc.

Conning expects that another round of significant price increases in 2003, along with record profits being earned by many Managed Care Organizations, are likely to result in far-reaching governmental and consumer consequences.

“Higher premiums and record profits play well on Wall Street, but higher prices are causing employers to require higher premium contributions from employees or, in some cases, to drop employee health coverage entirely,” said Robert H. Booz, Vice President, Health & Managed Care, Conning Research & Consulting. “To keep the percentage of uninsured Americans from rising, the government could take action.”

Booz considers new legislation addressing health care access and affordability more likely as a result of the make-up of the new U.S. Congress. Resistant to a broad health care initiative from Democrats in the early 1990s, the American public, health care providers, and the insurance industry may be more receptive to incremental plans proposed by the Republican-controlled Congress.

“In response to employees concerns about health care affordability and the growing number of uninsured Americans, regulators are likely to scrutinize more carefully proposed rate increases,” Booz said. “This scrutiny could constrain future price increases. Regulators are also likely to scrutinize more carefully the reserve levels of not-for-profit plans.”

The Managed Care Industry Overview broadly surveys and analyzes key data, trends, and issues facing the health and managed care industry. The focus is on network-based plans – specifically managed care organizations and health maintenance organizations. This publication, published semi-annually, considers key legal, regulatory and legislative issues like patients’ rights legislation and the effects of the Health Insurance Portability and Accountability Act (HIPAA). Industry market share data as well as key market performance data is also presented. Because of their importance, Blue Cross & Blue Shield Plans are tracked in this publication for growth, performance, and influence. It also covers the Medicare and Medicaid plans – government plans that provide coverage to roughly 70 million Americans.

The Managed Care Industry Overview is available from Conning Research & Consulting, Inc., by calling toll free (888) 707-1177 or (860) 520-1521. A complete listing of all Conning research products can also be found by visiting the company’s Web site at www.conningresearch.com.

About Conning Research & Consulting

The Conning name has represented excellence in independent insurance industry research for more than 90 years. As a result of its wealth of experience and intimate knowledge of the insurance industry, Conning understands industry challenges and opportunities and can provide in-depth insights and analyses. Conning provides both public and proprietary research as well as consulting services to the financial services industry. Conning has offices in New York and Hartford.