Humana 1999 Annual Report Download

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WHY H UMANA?
1999 Annual Report

Table of contents

  • Page 1
    WHY HUMANA? 1999 Annual Report

  • Page 2
    ... million medical members located primarily in 15 states and Puerto Rico. Humana offers coordinated health care coverage through a variety of plans - health maintenance organizations, preferred provider organizations, point-of-service plans, and administrative services products - to employer groups...

  • Page 3
    ...Michael B. McCallister President and Chief Executive Officer (left) David A. Jones Chairman of the Board (right) empower members to make choices about their health. Care Financing Administration (HCFA) reimbursement rates, and are helping to create a strong base from which we can build our Medicare...

  • Page 4
    ... Finance Kansas City, MO Lynn Weber Customer Service Chicago, IL Ken Fose Web Technology Louisville, KY Laura Branker Commercial Sales Miami, FL Tracy Stillman Provider Services Milwaukee, WI Rose Timmerman National Contracting Green Bay, WI Charles Jackson Information Systems Cincinnati, OH...

  • Page 5
    ... of the health care equation in chief executive officer roles at Humana hospitals (before they were spun off in 1993) and health plans in such major company markets as Arizona, Texas and Florida. Together with his leadership team, Mr. McCallister has developed a long-term vision, purpose and value...

  • Page 6
    ... Together, Humana and Healtheon/WebMD will provide self-service transactions, marketing, deployment and content development. Transactions for physicians and members will include claim status and benefit and eligibility inquiries, with a goal to reduce claim payment processing time from days to hours...

  • Page 7
    ... Administrator The fourth relationship is with EDS of Dallas, Texas, a leader in the global information technology services industry for more than 35 years. This long-term business relationship gives Humana the means to license the EDS MetaVanceTM Health Care Portfolio to provide an enterprise...

  • Page 8
    ... historical focus has been on providing our commercial group customers with protection from the financial risk associated with their employees' health care costs. As we move forward, providing the information employers, members and physicians need to improve the value of their health care coverage...

  • Page 9
    ... Ted Martin Agent San Antonio, TX Irene Raymoure Internal Review Louisville, KY Don Franklin City of Chicago Chicago, IL Dr. Thomas Shockley Orthopedic Surgeon Cincinnati, OH Kristi Casale Agent Pompano Beach, FL Rabbi Morton Malavsky Member Hollywood, FL Bill Pepe Medical Administrator Miami, FL Dr...

  • Page 10
    ... local associates the tools they need to serve customers and physicians on a local basis. Applying the successful Cincinnati model, our core markets are developing dedicated operations teams in all our service centers. We expect to derive many benefits from this alignment, including: • increased...

  • Page 11
    ...on Web-based applications and systems integration. Previously, as chief executive officer of Prudential Service Company, he directed shared services for all of Prudential's businesses nationwide, managing 2,800 employees in 20 locations throughout the U.S. and overseeing a $650 million annual budget...

  • Page 12
    ...the best small-group business as well as multi-market solutions for our large-group business. Mr. Perkins led the successful development of Humana's hospitalists program, which has been widely emulated within the managed care industry. • Richard P. Vance, M.D., vice president of population health...

  • Page 13
    ... commercial Medicare HMO Medicaid and other TRICARE Administrative services Total Health Plan Small Group: Small group commercial Total medical membership Specialty membership: Dental Other Total specialty membership 85.7% 15.0% 83.8% 15.2% 82.8% 15.5% 84.3% 15.5% 81.7% 13.9% 1,420,500 488,500...

  • Page 14
    ... the Company's large group commercial (100 employees and over), Medicare, Medicaid, ASO, workers' compensation and military or TRICARE business. The small group segment includes small group commercial (under 100 employees) and specialty benefit lines, including dental, life and short-term disability...

  • Page 15
    ...31, 1999 hospital agreement in Florida. Long-Lived Asset Impairment Milwaukee market primarily result from the Company's 1994 acquisition of CareNetwork, Inc. Operating losses in Milwaukee were the result of competitor pricing strategies resulting in lower premium levels to large employer groups as...

  • Page 16
    ... of these issues include significant large group commercial rate increases, re-contracting with, or eliminating certain risk-sharing providers, implementing three-tier pharmacy benefit designs, instituting Medicare HMO member premium and benefit changes and exiting various Medicare markets. These...

  • Page 17
    ... rates for 1999. To mitigate the effect of higher medical costs, the Small Group segment's improvement initiatives include significant premium rate increases, improving claim payment processes, provider re-contracting, rationalizing markets and products and implementing three-tier pharmacy benefit...

  • Page 18
    ...-ofthe-art technology. All application systems are fully integrated and automatically pass data through various system processes. The Company's primary data center and the majority of its programming and support staff are located at the Company's corporate offices in Louisville, Kentucky. In order...

  • Page 19
    ... of direct financial incentives to treating physicians and other health care providers to deny coverage. The complaints, generally, do not allege that any member was denied coverage for services that should have been covered but, instead, claim that Humana provided health insurance benefits of...

  • Page 20
    ...) Shares Amount of Par Value Deferred Compensation - Restricted Stock Retained Earnings Accumulated Other Comprehensive (Loss) Income Total Stockholders' Equity Revenues: Premiums Interest and other income Total revenues Operating expenses: Medical Selling, general and administrative Depreciation...

  • Page 21
    ... the Company's large group commercial (100 employees and over), Medicare, Medicaid, ASO, workers' compensation and military or TRICARE business. The small group segment includes small group commercial (under 100 employees) and specialty benefit lines, including dental, life and short-term disability...

  • Page 22
    ... of future payments relating to services incurred in the current and prior periods are continually reviewed by management and adjusted as necessary. The Company assesses the profitability of its contracts for providing health care services to its members when current market operating results or...

  • Page 23
    ... the Company paid Columbia/HCA$5 million to settle certain contractual issues associated with the March 31, 1999 hospital agreement in Florida. Long-Lived Asset Impairment Premium deficiency Reserve strengthening Provider costs Long-lived asset impairment Losses on non-core asset sales Professional...

  • Page 24
    ...not limited to, financial tests for interest coverage and leverage. The Company is in compliance with all covenants. The Company also maintains and issues short-term debt securities under a commercial paper program. The carrying value of commercial paper approximates fair value due to its short-term...

  • Page 25
    ... Stock at a price of $145 per share. The plan expires in 2006. 10 . COM M IT M ENT S AND CON TI NGE NCIE S Leases A summary of stock options outstanding and exercisable at December 31, 1999 follows: The Company leases facilities, computer hardware and other equipment under long-term operating...

  • Page 26
    ... the Company's large group commercial (100 employees and over), Medicare, Medicaid, ASO, workers' compensation and military or TRICARE business. The small group segment includes small group commercial (under 100 employees) and specialty benefit lines, including dental, life and short-term disability...

  • Page 27
    ...) Health Plan 1999 Small Group Total Health Plan 1998 Small Group Total Underwriting margin Income before income taxes $ 66 $ 553 $ $ 24 32 $ 90 $ 585 $ $ 60 96 $ $ 13 36 $ $ 73 132 The Company's product offerings include managed health care products and specialty products. Managed...

  • Page 28
    ...(Loss) earnings per common share - assuming dilution (In millions, except per share results) $ 2,477 (25) (16) (0.10) (0.10) $ 2,505 44 28 0.17 0.17 $ David A. Jones Chairman of the Board, Humana Inc. Michael B. McCallister President and Chief Executive Officer, Humana Inc. 1998 First Second...

  • Page 29
    ..., Jr. Senior Vice President - Large Group Commercial T RAN SF E R A GENT C O R P O R ATE HE AD QUAR T E R S National City Bank Stock Transfer Department Post Office Box 92301 Cleveland, Ohio 44193-0900 (800) 622-6757 Humana Inc. The Humana Building 500 West Main Street Louisville, Kentucky 40202...

  • Page 30
    The Humana Building 500 West Main Street Louisville, Kentucky 40202 502.580.1000 www.humana.com