Cath Lab Digest

Two days after WellPoint, Inc. released fourth-quarter and full-year 2011 financial results that fell short of analysts’ expectations, the managed care company today announced an initiative aimed at increasing investments in primary care, promoting quality, and helping reduce future costs.

WellPoint, the second largest health insurer measured by its approximately $22.5 billion market value, said it would begin a patient-centered primary care program in the third quarter of 2012 and would like to expand to all markets by the end of 2014, according to a news release. To be included in the shared savings model, primary care practices are required to meet quality benchmarks. If they maintain or improve quality, the practices will be eligible to earn an additional 30% to 50% compared with their current compensation.

By 2015, the company is hoping to cut medical costs by 20%, while also improving quality and its members’ health. WellPoint has 34 million members in its health plans and serves more than 65 million people through its subsidiaries.

According to the Wall Street Journal, WellPoint’s plan will cost $1 billion, but the company believes it will lead to fewer emergency-room visits and hospital stays. WellPoint has a network of approximately 100,000 primary care physicians.

“Primary care physicians who are committed to expanding access, to coordinating care for their patients and being accountable for the quality of care and the health outcomes of those patients, will get paid more than they do today, and we're committed to helping them achieve these quality and cost goals,” Dr. Harlan Levine, WellPoint’s executive vice president for comprehensive health solutions, said in the news release. “Primary care is the foundation of medicine, and it can and should be the foundation of our members’ health.”

On Wednesday, WellPoint announced its fourth-quarter net income had decreased 39%, mainly because of problems in its Medicare Advantage business. The company lost $50 million in the fourth quarter and $150 million last year in a Northern California Medicare Advantage plan that attracted an unexpected high number of claims. WellPoint discontinued the plan on Jan. 1, 2012, according to the Associated Press.

For 2012, WellPoint projects annual revenue of $62.1 billion and earnings per share of $7.60, below analyst expectations of $63 billion in revenue and $7.76 earnings per share.

As of 1:00 p.m. today, WellPoint’s shares were up 1.28% to $65.12.

Today's news release can be found at http://www.marketwatch.com/story/wellpoint-launches-innovative-reimburse...

-Tim Casey