* Earnings per share of $0.85 for the quarter
* Successfully completed $450 million bank loan financing
* Completed funding of securities litigation settlement
TRUMBULL, Conn., Aug. 5 /PRNewswire-FirstCall/ -- Oxford Health Plans,
Inc. (NYSE: OHP) announced today net income of $72.5 million, or $0.85 per
diluted share, for the quarter ended June 30, 2003, compared to $52.9 million,
or $0.58 per diluted share, for the prior year quarter. The 2002 results
include pretax charges of $26.5 million, or $0.17 per share after tax, related
to a contract termination and reduction in the carrying value of an
investment. Second quarter run rate earnings were $0.86 per share in 2003
compared to $0.68 per share in 2002. See Exhibit 1 of this release for a
reconciliation of earnings reported under generally accepted accounting
principles to run rate earnings for the second quarter of 2003 compared to
2002.
Oxford's CEO and President, Charles G. Berg, commented on the results,
"Oxford achieved strong financial results in the second quarter as we continue
to introduce new products that provide a wider array of choice for employers
and their employees, while at the same time remaining disciplined in premium
pricing. As we move forward, we will stay focused on practical innovation,
active engagement in our marketplace and disciplined execution throughout our
business."
Business Highlights
Membership: Total fully insured commercial membership ended the quarter
at 1.457 million members compared to 1.481 million members at the end of March
2003 and 1.470 million members in the second quarter of 2002. Year to date,
Oxford commercial membership has declined approximately 5 thousand members
while MedSpan membership has declined approximately 18 thousand members.
Medicare membership increased modestly during the second quarter, ending the
period at 70,900 members.
Premium Revenue: Premium revenue increased 10.7% in the second quarter,
to $1.33 billion, compared to the second quarter of 2002. Commercial premiums
increased 11.3% to $1.17 billion compared to $1.06 billion in the second
quarter of 2002. This premium growth was due to a 0.3% increase in commercial
member months and a net premium yield increase of approximately 10.9%. For
the first six months of 2003, net per member per month commercial premium
yields increased approximately 10.7% over the same period for 2002. Medicare
premiums, which represented 11.8% of total premiums in the current quarter,
increased 6.7% to $157.4 million compared to $147.5 million in the second
quarter of 2002.
Investment and Other Income, net: Investment and other income, net, was
$26.6 million compared to $14.0 million in the second quarter of 2002. The
second quarter of 2002 included an $11 million valuation reduction in the
Company's previous investment in MedUnite. The net pre-tax yield on the
Company's investment portfolio was approximately 3.4% during the second
quarter of 2003 compared to approximately 4.7% during the second quarter of
2002.
Health Care Services Expense: Health care services expense was $1.088
billion compared to $976.8 million in the second quarter of 2002. During the
second quarter of 2003, reported net per member per month commercial medical
costs increased approximately 10.7% compared to the second quarter of 2002.
For the first six months of 2003, reported net per member per month commercial
medical costs increased approximately 9.6% from the same period in 2002.
Net favorable development of prior period medical reserves was
$1.8 million during the second quarter of 2003 compared to approximately
$11.2 million in the second quarter of 2002. For the first six months of
2003, net favorable development of prior period medical reserves was $12.3
million compared to $14.3 million for the same period in 2002.
Marketing, General and Administrative (MG&A) Expenses: MG&A expenses were
$144.7 million, resulting in an administrative loss ratio of 10.8% for the
second quarter of 2003 compared to $152.0 million and a 12.6% administrative
loss ratio in the second quarter of 2002. The second quarter of 2002 included
a charge of $15.5 million related to the termination of a computer systems
outsourcing contract. Broker commissions and premium taxes accounted for
$47.5 million, or 32.8%, of total MG&A expenses in the second quarter of 2003,
compared to $40.9 million, or 26.9%, of MG&A expenses in 2002. The increase
in these items as a percentage of overall MG&A expenses is the result of
changes in product mix between the two periods and increases in New York State
premium tax rates. Excluding the increase in these expense items and the
contract charge in 2002, the Company's MG&A expenses increased 1.6% over the
second quarter of 2002.
Medical Costs Payable: Medical costs payable were $696.6 million as of
June 30, 2003, compared to $674.9 million at March 31, 2003, and
$618.6 million at December 31, 2002. The $21.7 million increase from the
first quarter was due to net increased levels of IBNR and unpaid claims
reserves of $25.8 million offset by reductions in other medical cost
liabilities. Days in medical costs payable were 59.4 days at June 30, 2003,
approximately one half day below the level at March 31, 2003.
Cash Flow: Cash flow used in operations was $158.8 million in the current
quarter compared to cash flow provided from operations of $133.6 million for
the second quarter of 2002. The current quarter's cash flow was reduced by
the net payment of $211 million for the settlement of the 1997 securities
class action litigation and related legal costs. Operating cashflows in the
second quarter were also reduced by the prepayment of approximately $43
million in income taxes resulting from the timing of tax deductions related to
funding the securities litigation settlement.
Parent Cash Balances: As of June 30, 2003, the parent company had
approximately $256 million of free cash and investments. During the second
quarter of 2003, the parent company received dividends of $117.5 million from
its New York and Connecticut regulated subsidiaries.
Interest and Other Financing Charges: During the second quarter of 2003,
the Company completed financings for a new $400 million 6-year term loan and a
$50 million 5-year revolving credit facility. The Company used the financings
to repay its former term loan and wrote-off approximately $3.4 million of
deferred financing costs as a result of the prepayment. Total financing
costs, including this write-off, were $7.2 million for the second quarter of
2003 compared to $2.8 million in the second quarter of 2002.
Share Repurchase Program: During the quarter, the Company repurchased
636,900 shares for $21.7 million at an average price of $34.04 per share. The
Company has repurchased 21.3 million shares for $663.3 million since the
inception of its share repurchase program in the third quarter of 2001. The
Company has remaining repurchase authority of approximately $86.7 million
under its share repurchase program that expires at the end of 2003.
Conference Call and Webcast
As previously announced, the Company will hold a conference call today at
9:00 am (Eastern Time) to review the results of the second quarter and to
discuss management's outlook for the remainder of 2003. The public is invited
to listen to this conference call by dialing 1-888-677-8170 (using the
password "Oxford") at least 10 minutes prior to the start of the call.
Individuals who dial in will be asked to identify themselves and their
affiliations. Investors, analysts and the public are also invited to listen to
the conference call over the Internet by visiting our website at
http://www.oxfordhealth.com. To listen to this call live on the Internet, visit the
investor page of Oxford's Web site at least 20 minutes early (to download and
install any necessary audio software).
About Oxford
Founded in 1984, Oxford Health Plans, Inc. provides health plans to
employers and individuals primarily in New York, New Jersey and Connecticut,
through its direct sales force, independent insurance agents and brokers.
Oxford's services include traditional health maintenance organizations, point-
of-service plans, Medicare plans and third party administration of employer-
funded benefits plans. More information about Oxford Health Plans, Inc. is
available at http://www.oxfordhealth.com.
Cautionary Statement Regarding Forward-Looking Statements
Certain statements in this press release, including statements concerning
the Company's strategy, including its introduction of new products and
continuing focus on innovation, active engagement and disciplined pricing and
other statements contained herein regarding matters that are not historical
facts, are forward-looking statements as defined in the Securities Exchange
Act of 1934; and because such statements involve risks and uncertainties,
actual results may differ materially from those expressed or implied by such
forward-looking statements. Factors that could cause actual results to differ
materially include, but are not limited to:
* Changes in federal or state regulation relating to health care and
health benefit plans, including proposed patient protection legislation
and mandated benefits.
* The state of the economy.
* Rising medical costs or higher utilization of medical services,
including higher out-of-network utilization under point-of-service
plans and new drugs and technologies.
* Competitive pressure on the pricing of the Company's products,
including acceptance of premium rate increases by the Company's
commercial groups.
* Higher than expected administrative costs in operating the Company's
business and the cost and impact on service of changing technologies.
* The ability of the Company to maintain risk transfer, risk sharing,
incentive and other provider arrangements and the resolution of
existing and future disputes over the reconciliations and performance
under such arrangements.
* Any changes in the Company's estimates of its medical costs and
expected cost trends.
* The impact of future developments in various litigation including the
periodic examination, investigation and review of the Company by
various federal and state authorities.
* The Company's ability to renew existing members and attract new
members.
* The Company's ability to develop processes and systems to support its
operations and any future growth and administer new health care benefit
designs.
* Any future acts or threats of terrorism or war.
* Those factors included in the discussion under the caption "Cautionary
Statement Regarding Forward-Looking Statements" in Part I, Item 1, of
the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 2002, and Part I, Item 2, of the Company's Quarterly
Reports on Form 10-Q for the quarterly periods ended March 31, 2003 and
June 30, 2003.
OXFORD HEALTH PLANS, INC. AND SUBSIDIARIES
Consolidated Income Statements
For the Three and Six Months Ended June 30, 2003 and 2002
(In thousands, except per share, per member per month and membership
highlights data)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2003 2002 2003 2002
Revenues:
Premiums earned $1,331,330 $1,202,593 $2,641,790 $2,346,737
Third-party
administration, net 2,995 4,660 6,112 8,484
Investment and other
income, net 26,600 13,991 58,155 35,155
Total revenues 1,360,925 1,221,244 2,706,057 2,390,376
Expenses:
Health care services 1,088,302 976,764 2,122,411 1,891,205
Marketing, general and
administrative 144,710 151,979 286,960 282,167
Litigation charge for
settlement, net - - 45,000 -
Interest and other
financing charges 7,215 2,760 9,443 5,968
Total expenses 1,240,227 1,131,503 2,463,814 2,179,340
Earnings before income
taxes 120,698 89,741 242,243 211,036
Income tax expense 48,222 36,868 96,842 86,720
Net earnings $72,476 $52,873 $145,401 $124,316
Earnings per common share
- basic $0.87 $0.60 $1.74 $1.42
Earnings per common share
- diluted $0.85 $0.58 $1.71 $1.35
Weighted-average common
shares - basic 83,115 87,978 83,439 87,704
Dilutive effect of stock
options 2,080 3,912 1,748 4,344
Weighted-average common
shares - diluted 85,195 91,890 85,187 92,048
Selected Information
Medical loss ratio 81.7% 81.2% 80.3% 80.6%
Administrative loss
ratio, excluding
litigation settlement
charge 10.8% 12.6% 10.8% 12.0%
Earnings before income
taxes, financing
charges, depreciation
and amortization
("EBITDA") $134,600 $97,762 $264,170 $227,165
PMPM premium revenue $289.04 $262.37 $286.51 $260.72
PMPM medical expense $236.28 $213.10 $230.18 $210.11
Fully insured member
months 4,606.0 4,583.7 9,220.5 9,000.8
As of June 30,
Membership Highlights 2003 2002
POS, PPO and Other Plans 1,260,000 1,236,000
HMO 196,500 233,600
Total Fully Insured Commercial 1,456,500 1,469,600
Medicare 70,900 68,900
Third-party Administration 40,800 63,300
Total Membership 1,568,200 1,601,800
OXFORD HEALTH PLANS, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
As of June 30, 2003 and December 31, 2002
(In thousands, except share data)
Assets
(Unaudited)
June 30, December 31,
2003 2002
Current assets:
Cash and cash equivalents $453,205 $321,627
Investments - available-for-sale, at
market value 1,192,115 1,102,664
Premiums receivable, net 35,768 29,803
Other receivables 37,843 43,919
Prepaid expenses and other current
assets 96,621 10,214
Deferred income taxes 37,991 111,652
Total current assets 1,853,543 1,619,879
Property and equipment, net 34,539 34,445
Deferred income taxes 8,086 9,173
Restricted cash and investments 59,467 56,421
Goodwill and other intangible assets,
net 24,214 24,691
Other noncurrent assets 12,126 8,907
Total assets $1,991,975 $1,753,516
Liabilities and Shareholders' Equity
Current liabilities:
Medical costs payable $696,573 $618,618
Current portion of long term debt 4,000 30,625
Trade accounts payable and accrued
expenses 132,642 135,124
Reserve for litigation settlement - 161,300
Unearned revenue 145,277 201,045
Income taxes payable - 2,418
Current portion of long-term debt
and capital lease obligations 5,607 5,470
Total current liabilities 984,099 1,154,600
Obligations under capital lease 2,910 5,749
Long-term debt 396,000 96,250
Shareholders' equity:
Preferred stock, $.01 par value,
authorized 2,000,000 shares - -
Common stock, $.01 par value,
authorized 400,000,000
shares; issued 105,762,983 shares
in 2003 and 105,075,889 shares in 2002 1,058 1,051
Additional paid-in capital 724,991 709,258
Retained earnings 582,531 437,130
Accumulated other comprehensive income 22,521 25,038
Treasury stock, at cost (722,135) (675,560)
Total shareholders' equity 608,966 496,917
Total liabilities and shareholders'
equity $1,991,975 $1,753,516
OXFORD HEALTH PLANS, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
For the Three and Six Months Ended June 30, 2003 and 2002
(Unaudited) (In thousands)
Three Months Ended Six Months Ended
June 30, June 30,
2003 2002 2003 2002
Cash flows from operating
activities:
Net income $72,476 $52,873 $145,401 $124,316
Adjustments to reconcile net
earnings to net cash provided
by operating activities:
Depreciation and amortization 7,005 5,537 13,075 10,715
Noncash income (4,146) (3,804) (8,292) (7,604)
Litigation and other noncash
charges 3,413 26,532 48,413 26,532
Deferred income taxes 87,979 (358) 76,739 5,543
Realized gain on sale of
investments (9,562) (4,145) (23,285) (6,521)
Changes in assets and
liabilities (net of balances
acquired):
Premiums receivable 2,559 14,262 (5,177) (1,901)
Other receivables 22,268 (4,559) 23,076 (3,368)
Prepaid expenses and other
current assets (78,469) (1,307) (83,989) 35
Medical costs payable 21,762 60,670 78,115 72,168
Trade accounts payable and
accrued expenses (11,196) (5,737) (34,327) (18,728)
Reserve for litigation
settlement (225,000) - (225,000) -
Unearned revenue (2,247) (14,525) (47,476) (56,144)
Income taxes payable (45,708) 8,015 (2,418) (1,584)
Other, net 23 121 450 (2,532)
Net cash provided (used)
by operating activities (158,843) 133,575 (44,695) 140,927
Cash flows from investing
activities:
Capital expenditures (4,576) (2,828) (8,164) (6,287)
Purchases of available-for-sale
investments (325,038) (442,064) (787,450) (834,638)
Sales and maturities of
available-for-sale investments 286,177 394,968 743,854 725,356
Acquisitions, net of cash acquired - 610 - (1,288)
Other, net (62) (24) (62) (24)
Net cash used by investing
activities (43,499) (49,338) (51,822) (116,881)
Cash flows from financing
activities:
Proceeds from exercise of stock
options 5,217 11,123 12,876 27,327
Proceeds from borrowings, net 391,371 - 391,371 -
Redemption of notes payable (119,219) (6,563) (126,875) (13,126)
Payments under capital leases (1,358) - (2,702) -
Payment of withholding tax on
option exercises (382) - (382) (24,056)
Purchase of treasury shares (21,956) (16,789) (46,193) (88,889)
Net cash provided (used)
by financing activities 253,673 (12,229) 228,095 (98,744)
Net increase (decrease) in cash
and cash equivalents 51,331 72,008 131,578 (74,698)
Cash and cash equivalents at
beginning of period 401,874 198,824 321,627 345,530
Cash and cash equivalents at end
of period $453,205 $270,832 $453,205 $270,832
Exhibit 1
OXFORD HEALTH PLANS, INC. AND SUBSIDIARIES
Supplemental Schedule Reconciling GAAP Earnings to Run Rate Earnings
For the Three and Six Months Ended June 30, 2003 and 2002
($ In thousands, except per share data)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2003 2002 2003 2002
Diluted earnings per common share -
GAAP $0.85 $0.58 $1.71 $1.35
Effect of run rate adjustments:
Litigation charge for settlement, net - - 0.32 -
Changes in estimates of prior
period medical cost reserves (0.01) (0.07) (0.09) (0.09)
MedUnite investment impairment
charge - 0.07 - 0.07
CSC contract termination and asset
valuation charge - 0.10 - 0.10
Write-off of deferred financing
costs due to refinancing 0.02 - 0.02 -
Diluted earnings per common share -
Run Rate $0.86 $0.68 $1.96 $1.43
Diluted common shares 85,195 91,890 85,187 92,048
Three Months Ended Six Months Ended
June 30, June 30,
2003 2002 2003 2002
Net earnings - GAAP $72,476 $52,873 $145,401 $124,316
Effect of run rate adjustments:
Litigation charge for settlement,
net - - 27,000 -
Changes in estimates of prior
period medical cost reserves (1,092) (6,590) (7,371) (8,433)
MedUnite investment impairment
charge - 6,479 - 6,479
CSC contract termination and
asset valuation charge - 9,130 - 9,130
Write-off of deferred financing
costs due to refinancing 2,040 - 2,040 -
Net earnings - Run Rate $73,424 $61,892 $167,070 $131,492
Note: Exhibit 1 above reconciles the differences between run rate
earnings and net earnings calculated and presented in accordance with
generally accepted accounting principles ("GAAP"). Management believes
that the presentation of run rate earnings provides useful information to
investors regarding the Company's results of operations because such
presentation facilitates the period-to-period comparison of operating
performance by eliminating charges for settlement of the 1997 securities
class action litigation, which charges are unrelated to current period
operating performance, and by eliminating, among other things, the
current period impact of changes to the Company's estimates of prior
period medical cost reserves.
Run Rate Adjustments for the Quarters Ended June 30, 2003 and 2002
During the second quarter of 2003, the Company recorded pre-tax expense of
$3.4 million for the write-off of deferred financing costs related to the
repayment of its former term loan. This expense, which is included as a
component of financing costs on the accompanying income statement, reduced net
earnings by $2 million, or $0.02 per diluted share.
During the second quarters of 2003 and 2002, the Company had favorable net
prior period reserve adjustments ("PPRAs") of medical costs of approximately
$1.8 million and $11.2 million, respectively. These PPRAs had the effect of
increasing reported net earnings by $1.1 million in 2003 and $6.6 million in
2002, or $0.01 per diluted share in 2003 and $0.07 per diluted share in 2002.
The quarter ended June 30, 2002 included an $11 million pre-tax charge related
to the Company's previous investment in MedUnite, which reduced investment and
other income, and a $15.5 million pre-tax charge related to the termination of
a computer systems outsourcing contract, which increased administrative
expenses. These charges reduced GAAP net earnings by $15.6 million and
reduced GAAP EPS by $0.17 per diluted share.
Excluding the impact of these items, run rate net earnings increased $11.5
million, or 19%, to $73.4 million for the second quarter of 2003 compared to
run rate earnings of $61.9 million for the second quarter of 2002. Run rate
earnings per diluted share increased $0.18 per share, or 27%, to $0.86 per
share in the current quarter, compared to $0.68 per share for the second
quarter of 2002.
Exhibit 2
OXFORD HEALTH PLANS, INC. AND SUBSIDIARIES
Changes in Medical Costs Payable
For the Six Months Ended June 30, 2003 and 2002
($ In millions)
(Unaudited)
Amounts Relating to
Six Months Ended June 30, 2003 Claims Incurred During
2002 and
Total 2003 Prior
Balance as of December 31, 2002 $618.6 $- $618.6
Components of health care services
expense:
Estimated costs incurred 2,134.7 2,134.7 -
Estimate changes (12.3) - (12.3)
Health care services expense 2,122.4 2,134.7 (12.3)
Payments for health care services (2,044.4) (1,522.7) (521.7)
Balance as of June 30, 2003 $696.6 $612.0 $84.6
Amounts Relating to
Six Months Ended June 30, 2002 Claims Incurred During
2001 and
Total 2002 Prior
Balance as of December 31, 2001 $595.1 $- $595.1
Medical payables acquired 26.5 - 26.5
Components of health care services
expense:
Estimated costs incurred 1,905.5 1,905.5 -
Estimate changes (14.3) - (14.3)
Health care services expense 1,891.2 1,905.5 (14.3)
Payments for health care services (1,821.0) (1,332.0) (489.0)
Balance as of June 30, 2002 $691.8 $573.5 $118.3
Changes in Medical Costs Payable for the Six Months Ended
June 30, 2003 and 2002
During the first half of 2003, the Company incurred estimated health care
services expense of $2.135 billion compared to $1.905 billion in the first
half of 2002, an increase of $230 million period over period. The Company's
reserving methodologies are consistent for all periods presented.
During the first half of 2003, net favorable PPRAs were $12.3 million
compared to $14.3 million favorable in the first half of 2002. As the
Company's claims processing continues to improve and the tail of its incurred
claims is shortened, the amount of ending reserve related to prior year
periods continues to decline. As of June 30, 2003, approximately 12% of total
medical costs payable were for prior years compared to approximately 17% as of
June 30, 2002.
Exhibit 3
OXFORD HEALTH PLANS, INC. AND SUBSIDIARIES
COMPONENTS OF MEDICAL COSTS PAYABLE
As of June 30, 2003 and 2002 and December 31, 2002
($ In millions)
(Unaudited)
Amounts Relating to
Claims Incurred During
As of June 30, 2003 Total 2003 2002 and
Prior
IBNR and medical claims reserves $635.5 $585.2 $50.3
Pharmacy PBM payable 26.8 26.8 -
Stabilization and stop-loss pools,
BDCC and GME reserves, net 15.5 - 15.5
Other reserves 18.8 - 18.8
Medical Costs Payable Balance $696.6 $612.0 $84.6
Amounts Relating to
Claims Incurred During
As of June 30, 2002 Total 2002 2001 and
Prior
IBNR and medical claims reserves $600.0 $518.1 $81.9
Pharmacy PBM payable 22.4 22.4 -
Stabilization and stop-loss pools,
BDCC and GME reserves, net 41.3 33.0 8.3
Other reserves 28.1 - 28.1
Medical Costs Payable Balance $691.8 $573.5 $118.3
Amounts Relating to
Claims Incurred During
As of December 31, 2002 Total 2002 2001 and
Prior
IBNR and medical claims reserves $555.7 $521.8 $33.9
Pharmacy PBM payable 26.7 26.7 -
Stabilization and stop-loss pools,
BDCC and GME reserves, net 13.9 8.5 5.4
Other reserves 22.3 - 22.3
Medical Costs Payable Balance $618.6 $557.0 $61.6
Definitions
IBNR and medical claims reserves: Estimates of liabilities for incurred
but unreported medical claims including in-house inventories, adjudicated but
not yet paid claims, net liabilities under risk sharing arrangements and
reserves for previously denied claims.
Pharmacy PBM payable: Bi-weekly amounts due to the Company's pharmacy
benefit manager based on submission of pharmacy claims.
Stabilization and stop-loss pools, BDCC and GME reserves, net: Estimated
net liabilities related to various state programs including New York market
stabilization and stop-loss pools, bad debt and charity care and graduate
medical education surcharges.
Other reserves: Estimated liabilities for certain former medical
contracts that are in various stages of resolution.
Components of Medical Costs Payable at June 30, 2003
During the second quarter of 2003, total medical costs payable increased
$21.7 million over the balance at March 31, 2003. During the quarter ended
June 30, 2003, current year IBNR and medical claims reserves of $585.2 million
increased $80 million from $505.2 million at March 31, 2003, while reserves
for prior year IBNR and medical claims declined over $54 million due to claim
payments and modest favorable development.
IBNR and medical claims reserves represented 91.2% of total medical costs
payable at June 30, 2003, compared to 86.7% at June 30, 2002. The percentage
of IBNR and medical claims reserves related to claims incurred in prior years
was 7.9% at June 30, 2003, compared to 13.7% at June 30, 2002. This improved
aging of claims reserves is a result of the Company's improved and accelerated
claims adjudication and the shortening of incurred claims tails through
electronic initiatives. Total days medical costs payable at June 30, 2003 was
approximately 59.4 days, representing a decrease of about one half day during
the quarter.
Exhibit 4
OXFORD HEALTH PLANS, INC. AND SUBSIDIARIES
SELECTED FINANCIAL STATISTICS
($ in Thousands, except PMPM data)
(Unaudited)
2003
2Q 1Q
Commercial Premium Revenues $1,173.9 $1,155.1
Medicare Premium Revenues 157.4 155.4
Total Premium Revenues $1,331.3 $1,310.5
Commercial Medical Costs $950.3 $903.5
Medicare Medical Costs 138.0 130.6
Total Health Care Services Expense $1,088.3 $1,034.1
Commercial PMPM Revenue $267.20 $262.36
Medicare PMPM Revenue $740.10 $733.53
Commercial PMPM Medical Costs $216.31 $205.21
Medicare PMPM Medical Costs $648.80 $616.66
Commercial Medical Loss Ratio 81.0% 78.2%
Medicare Medical Loss Ratio 87.7% 84.1%
Total Medical Loss Ratio 81.7% 78.9%
MG&A Expenses (1) $144.7 $142.3
Administrative Loss Ratio (ALR) (1) 10.8% 10.8%
ALR Run Rate (2) 10.8% 10.8%
OXFORD HEALTH PLANS, INC. AND SUBSIDIARIES
SELECTED FINANCIAL STATISTICS
($ in Thousands, except PMPM data)
(Unaudited)
2002
Full Year 4Q 3Q 2Q 1Q
Commercial Premium
Revenues $4,265.8 $1,115.2 $1,094.4 $1,055.1 $1,001.1
Medicare Premium
Revenues 585.2 147.4 147.3 147.5 143.0
Total Premium
Revenues $4,851.0 $1,262.6 $1,241.7 $1,202.6 $1,144.1
Commercial Medical
Costs $3,374.9 $893.2 $828.2 $855.3 $798.2
Medicare Medical Costs 473.9 119.9 116.3 121.5 116.2
Total Health Care
Services Expense $3,848.8 $1,013.1 $944.5 $976.8 $914.4
Commercial PMPM Revenue $244.11 $250.80 $246.85 $240.96 $237.42
Medicare PMPM Revenue $710.36 $702.50 $706.47 $719.78 $713.01
Commercial PMPM Medical
Costs $193.13 $200.89 $186.79 $195.34 $189.30
Medicare PMPM Medical
Costs $575.26 $571.32 $558.28 $592.58 $579.32
Commercial Medical Loss
Ratio 79.1% 80.1% 75.7% 81.1% 79.7%
Medicare Medical Loss
Ratio 81.0% 81.3% 79.0% 82.3% 81.2%
Total Medical Loss
Ratio 79.3% 80.2% 76.1% 81.2% 79.9%
MG&A Expenses (1) $575.4 $157.7 $135.5 $152.0 $130.2
Administrative Loss
Ratio (ALR) (1) 11.8% 12.5% 10.9% 12.6% 11.3%
ALR Run Rate (2) 11.1% 10.9% 10.9% 11.3% 11.3%
OXFORD HEALTH PLANS, INC. AND SUBSIDIARIES
SELECTED FINANCIAL STATISTICS
($ in Thousands, except PMPM data)
(Unaudited)
2001
Full Year
Commercial Premium Revenues $3,653.1
Medicare Premium Revenues 659.3
Total Premium Revenues $4,312.4
Commercial Medical Costs $2,865.6
Medicare Medical Costs 535.7
Total Health Care Services Expense $3,401.3
Commercial PMPM Revenue $222.74
Medicare PMPM Revenue $658.21
Commercial PMPM Medical Costs $174.73
Medicare PMPM Medical Costs $534.84
Commercial Medical Loss Ratio 78.4%
Medicare Medical Loss Ratio 81.2%
Total Medical Loss Ratio 78.9%
MG&A Expenses (1) $489.1
Administrative Loss Ratio (ALR) (1) 11.3%
ALR Run Rate (2) 11.1%
1. Excludes net litigation settlement charges of $151.3 million in third
quarter of 2002 and $45 million in first quarter of 2003.
2. Run Rate ALR excludes all charges related to the securities class
action litigation settlement and defense costs in the first quarter of
2003 ($45 million), the third quarter of 2002 ($151.3 million) and
fourth quarter of 2002 ($20 million) and the termination charge for
the CSC contract ($15.5 million) in the second quarter of 2002.
Selected Trends and Operating Statistics
Commercial premium revenues increased $118.8 million over the second
quarter of 2002. Commercial premium yields, net of product mix and benefit
changes, increased approximately 10.9% over the second quarter of 2002. For
the first six months of 2003, commercial premium yields increased
approximately 10.7% over the first six months of 2002. Medicare premiums
increased $9.9 million over the second quarter of 2002 as a result of
increased membership, the mix of membership and increased reimbursement rates.
Commercial medical costs increased $95 million over the second quarter of
2002. Reported net commercial PMPM medical costs increased 10.7% compared to
the second quarter of 2002. Reported net commercial PMPM medical costs for
the second quarter were impacted by favorable prior period adjustments of
$0.61 PMPM in 2003 and $2.51 PMPM in 2002. For the first six months of 2003,
reported net commercial PMPM medical costs increased approximately 9.6% over
the first six months of 2003.
Exhibit 5
OXFORD HEALTH PLANS, INC. AND SUBSIDIARIES
MEMBERSHIP DATA
(in Thousands)
(Unaudited)
Total Membership 2003
2Q 1Q
POS, PPO and Other Plans 1,260.0 1,276.8
HMO 196.5 204.0
Total Fully Insured Commercial
Membership 1,456.5 1,480.8
Medicare 70.9 70.7
Third-party Administration 40.8 41.1
Total Membership 1,568.2 1,592.6
Fully Insured Commercial Change (24.3) 1.3
Fully Insured Commercial Change % -1.6% 0.1%
OXFORD HEALTH PLANS, INC. AND SUBSIDIARIES
MEMBERSHIP DATA
(in Thousands)
(Unaudited)
Total Membership 2002
4Q 3Q 2Q 1Q
POS, PPO and Other Plans 1,252.9 1,249.8 1,236.0 1,204.9
HMO 226.6 229.0 233.6 236.7
Total Fully Insured Commercial
Membership 1,479.5 1,478.8 1,469.6 1,441.6
Medicare 70.1 69.6 68.9 67.5
Third-party Administration 51.9 62.7 63.3 65.4
Total Membership 1,601.5 1,611.1 1,601.8 1,574.5
Fully Insured Commercial Change 0.7 9.2 28.0 69.3
Fully Insured Commercial Change % 0.0% 0.6% 1.9% 5.0%
OXFORD HEALTH PLANS, INC. AND SUBSIDIARIES
MEMBERSHIP DATA
(in Thousands)
(Unaudited)
Total Membership 2001
4Q
POS, PPO and Other Plans 1,154.1
HMO 218.2
Total Fully Insured Commercial
Membership 1,372.3
Medicare 77.8
Third-party Administration 60.0
Total Membership 1,510.1
Fully Insured Commercial Change 5.7
Fully Insured Commercial Change % 0.4%
Membership
Total fully insured commercial membership ended the quarter at 1.457
million members compared to 1.481 million members at the end of March 2003 and
1.470 million members in the second quarter of 2002. Year to date, Oxford
commercial membership has declined approximately 5 thousand members while
MedSpan membership has declined approximately 18 thousand members. Medicare
membership increased modestly during the second quarter, ending the period at
70,900 members.
SOURCE Oxford Health Plans, Inc.
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Related links:
http://www.oxfordhealth.com
CONTACT:
Investor Contacts: Gary Frazier,
+1-203-459-7331, or Jon Green, +1-203-459-6674; or Media Contact:
Maria Gordon-Shydlo, +1-203-459-7674 all of Oxford Health Plans
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