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How does Centene's business future look?
(by Rebecca S. Rivas - January 01, 2001)
While the city was wooing Centene and its development plans, the sweetheart company was having financial ups and downs. In 2006, Centene reported a net earnings loss of $43.6 million, and company officials said that keeping medical costs down has been a challenge.
As a managed-care organization, Centene enrolls Medicaid recipients into private health plans that receive fixed monthly premiums from the state. The health plans are responsible for providing for all or most of the recipient’s health care needs. About 60 percent of people who receive Medicaid nationwide are enrolled in managed-care plans.
Centene tries to lower the medical costs of the patients it manages by identifying patients who are high risk or have complicated conditions. It has special monitoring programs for such patients. The company requires pre-authorization for certain procedures and hospital stays.
In 2006, Centene lost its contract in Kansas and chose to discontinue its business with Missouri. Centene spokesman Ken Fields said the net earnings loss in 2006 included “charges associated with the discontinued operations of our Missouri and Kansas subsidiaries.”
In 2007, the company bounced back and had a $73.4 million gain in net earnings.
Both Democratic presidential candidates are pushing to expand Medicaid programs. If the country elects for either Hillary Clinton or Barack Obama as the next U.S. president, then Centene’s business could potentially increase. In contrast, Republican candidate John McCain proposes to offer tax credits that would allow families and individuals to find their own health-care insurance agencies.
“The need for what we offer — a coordinated approach to health care for people who deserve quality care — will continue to grow,” Fields said.
On Apr. 30, the Missouri House and Senate budget negotiators agreed to increase the Medicaid payment rates for doctors’ visits and other medical services. By paying doctors more, it will be easier to get physicians to take Medicaid patients, said William Peck, director of the Washington University Center for Health Policy. “Medicare pays physicians more than Medicaid,” he said. “The idea is to bring the rates up to meet Medicare’s. In Missouri, the rates have been notoriously low.”
However, the decision won’t affect medical costs for Centene’s patients, because the company no longer contracts with Missouri and in the same year that Centene sold its Missouri unit, Gov. Matt Blunt and the Republican-led Missouri legislature tightened eligibility requirements and eliminated 90,000 Medicaid recipients.
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