stanu78
14 years ago
Q22010: Net income of $5.8 million or $0.14 per diluted share, compared to $3.2 million or $0.7 per diluted share in 2009
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WEST PALM BEACH, Fla.--(BUSINESS WIRE)--Metropolitan Health Networks, Inc. (NYSE Amex:MDF), (“Metcare”) a leading provider of healthcare services in Florida, today announced the financial results for their second quarter ended June 30, 2010. Highlights include the following:
Net income of $5.8 million in the second quarter of 2010 or $0.14 per diluted share, compared to $3.2 million or $0.7 per diluted share in 2009’s second quarter;
a reduction in the medical expense ratio (“MER”) in the second quarter of 2010 to 83.8% from 89.8% in the second quarter of 2009;
net income of $12.9 million or $0.31 per diluted share for the six months ended June 30, 2010, compared to $7.2 million or $0.15 per diluted share for the same period in 2009;
a reduction in the MER to 82.8% for the first half of 2010 compared to 88.8% for the first half of 2009; and,
working capital of $40.9 million at June 30, 2010, up $13.2 million or 48% over December 31, 2009’s balance.
Second Quarter Financial Highlights:
The Company recognized revenue of $92.6 million for the second quarter of 2010 as compared to $87.1 million in the 2009 second quarter, a 6.3% increase. The Company’s medical expense ratio, or MER, was 83.8% in the second quarter of 2010 compared to 89.8% in the same quarter of 2009.
Operating income was $9.3 million in 2010 compared to $5.1 million in 2009. Net income for the 2010 second quarter was $5.8 million or $0.15 per share basic and $0.14 per diluted share as compared to $3.2 million or $0.07 per basic and diluted share for the same quarter last year. Weighted average common shares outstanding used to compute diluted earnings per share for the three month periods ended June 30, 2010 and 2009 were 41.2 million and 47.0 million, respectively.
Year to Date Financial Highlights:
For the six months ended June 30, 2010, the company’s revenue totaled $185.6 million compared to $177.5 million for the same period in the prior year, an increase of 4.6%. The Company’s MER, was 82.8% in the first six months of 2010 compared to 88.8% in the same period of 2009 and 88.5% for all of 2009.
Operating income was $20.5 million for the first six months of 2010 compared to $11.5 million for the same period in 2009. Net income was $ 12.9 million, or $0.33 per basic share and $0.31 per diluted share, compared to net income of $7.2 million, or $0.15 per basic and diluted share for the same period of 2009, an increase of 107% for diluted earnings per share. Weighted average common shares outstanding used to compute diluted earnings per share for the six month periods ended June 30, 2010 and 2009 were 41.1 million and 47.6 million, respectively.
Customer Information:
Medicare Advantage customers decreased slightly to 35,200 at June 30, 2010 as compared to 35,300 customers at June 30, 2009. Total customer months, the combined total customers for each month of the measurement period, for the first six months of 2010 increased by 0.3% to 212,200 in 2010 from 211,500 in 2009.
Balance Sheet Highlights:
Cash, cash equivalents and short-term investments at June 30, 2010 totaled $33.2 million compared to $33.8 million at December 31, 2009. Net working capital increased to $40.9 million at June 30, 2010 from $27.7 million at December 31, 2009. Included in working capital at June 30, 2010 is $10.7 million due from Humana. We expect to collect $8.5 million of this amount in August 2010.
Share Repurchase Program:
The Company’s Board of Directors has previously authorized the repurchase of up to 20 million shares of common stock. From the inception of the program through June 30, 2010 the Company has repurchased 13.7 million shares, and options exercisable to purchase 684,200 shares, at an average cost of $1.90 per share. Shares repurchased from January 1 through June 30, 2010 totaled approximately 1.7 million reducing total shares then outstanding to approximately 40.6 million. No shares were repurchased in the second quarter of 2010. Approximately 5.6 million shares remain available for purchase under the plan. The number of shares to be repurchased and the timing of the purchases will be influenced by a number of factors, including the then prevailing market price of the common stock of the Company, other perceived opportunities that may become available to the Company, and regulatory requirements.
Commenting on the results of the second quarter, Michael Earley, Chairman and Chief Executive Officer of Metropolitan Health Networks, Inc., stated, “2010 continues to be the best year in the company’s history, both in terms of financial results and in our positioning of the company to better serve our customers. In terms of financial performance, we, like most in our industry, are benefiting from lower utilization and cost trends in 2010. This, combined with changes in the benefits of the plans we service, has resulted in a lower medical expense ratio in 2010.”
Continuing, Earley noted, “The last two years were characterized by uncertainty with health care reform and in the financial markets. We took the opportunity to turn inward and focus on and invest in our operations and core business. The positive outcomes from these efforts are becoming clear. Our advances with the Patient Centered Medical Home model of care, the addition of medical and management staffing, and the implementation of new technology have produced benefits in 2010 and, we expect, will produce benefits in the future. Along with tangible financial performance, we are seeing measurable gains in customer satisfaction and employee engagement. A critical driver in our success has been our dedicated team of professionals, managers and staff that has accepted the challenge and embraced change, and we thank them for that. Today we are better positioned to address the needs of a growing senior population and better positioned to grow our business overall. The skills of providing and coordinating high quality care, of managing medical costs and risk, are more valuable than ever today. These skills, our scale, and a demographically explosive market, provide us ample opportunity for real growth in the future.”
stanu78
14 years ago
Net income of $7.1 million in the first quarter of 2010 or $0.18 per basic share, compared to $4.0 million or $0.09 per basic share in the year ago quarter;
WEST PALM BEACH, Fla.--(BUSINESS WIRE)--Metropolitan Health Networks, Inc. (NYSE AMEX:MDF), a leading provider of healthcare services in Florida, today announced the financial results for their first quarter ended March 31, 2010. Highlights include the following:
Net income of $7.1 million in the first quarter of 2010 or $0.18 per basic share, compared to $4.0 million or $0.09 per basic share in the year ago quarter;
Medical expense ratio of 81.7% compared to 87.9% in first quarter of 2009; and
Total outstanding shares of common stock reduced by 1.7 million shares since December 31, 2009 to 39.7 million at March 31, 2010.
First Quarter Financial Highlights:
The Company recognized revenue of $93.0 million for the first quarter of 2010 as compared to $90.4 million in the 2009 first quarter, a 2.9% increase. Medical expense, on a per customer per month basis, decreased 5.4% in the first quarter of 2010 as compared to the same period in 2009. The Company’s consolidated MER was 81.7% in the first quarter of 2010 compared to 87.9% in the same quarter of 2009.
Operating income was $11.2 million in 2010 first quarter compared to $6.4 million in 2009. Net income for the 2010 first quarter was $7.1 million or $0.18 per share basic and $0.17 diluted as compared to $4.0 million or $0.09 per basic share and $.08 diluted for the same quarter last year.
Customer Information:
Medicare Advantage customers increased to 35,400 at March 31, 2010 as compared to 34,900 customers at March 31, 2009, an increase of 500 members. Total customer months, the combined total customers for each month of the measurement period, increased by 1.1% to 106,700 in 2010, up from 105,500 in 2009.
Balance Sheet Highlights:
Cash, cash equivalents and short-term investments at March 31, 2010 totaled $30.3 million compared to $33.8 million at December 31, 2009. This reduction is primarily a result of the continued repurchase of our common stock and the increase in the amount due from Humana partially offset by our net income and the sale of short-term investments. During the quarter, we repurchased 1.7 million shares of our common stock for $3.9 million. Our net working capital increased to $33.4 million at March 31, 2010 from $27.7 million at December 31, 2009, an increase of $5.7 million or 20.6%.
Share Repurchase Program:
On February 24, 2010, the Company’s Board of Directors approved a 5 million share increase to its previously announced share repurchase program bringing the total number of shares of common stock authorized for repurchase under the program to 20 million shares. From the inception of the program through March 31, 2010 the Company has repurchased 13.7 million shares of its common stock, and options exercisable to purchase 684,200 shares of our common stock, at an average cost of $1.90 per share. Shares repurchased from January 1 through March 31, 2010 totaled approximately 1.7 million reducing total shares then outstanding to approximately 39.7 million. Approximately 5.6 million shares remain available for purchase under the plan. The number of shares to be repurchased and the timing of the purchases will be influenced by a number of factors, including the then prevailing market price of the common stock of the Company, other perceived opportunities that may become available to the Company, and regulatory requirements.
Michael Earley, Chairman and Chief Executive Officer of Metropolitan Health Networks, Inc., commented, “We are delighted with our first quarter results. 2010 is a year of transition and challenge for the Medicare Advantage industry as we face declining base premiums. A combination of strategies including improved medical management, continuing focus on revenue compliance, reduced plan benefits and the elimination of unprofitable plans resulted in a terrific start to the year. While one quarter doesn’t make a trend, and we don’t assume these outstanding results are a trend, it is clear that our efforts are positioning us for another good year, and convince us that our business model initiatives are further positioning us for continued success.”
Earley noted further, “While net membership grew slightly, we note that we and our industry faced dramatic uncertainty during the health care reform debate of the last 18 months. As we have often discussed, management’s decision to focus our resources and energy on improving our operations was clearly the right strategy for our company. We achieved record bottom line results in 2009, continuing through Q1 2010, but more importantly we made significant progress developing and implementing the Patient Centered Medical Home model of primary care and related initiatives. Investment in these efforts continue, of course, but we are already seeing tangible results today in terms of improved customer satisfaction, employee engagement, and medical and financial outcomes from these initiatives. With passage of the recent legislation, the paths and opportunities in the future are clearer, and we are better prepared to focus on growth. We believe that Medicare Advantage will continue as a viable and attractive health care alternative for the soon to boom senior population, and we believe that consumer-centric, coordinated care will best serve this market in terms of customer satisfaction, effective outcomes and efficiency.”
stanu78
14 years ago
looks like the new model they are testing seems to work.. hope it will show similar resul on the roll out phase...
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Metropolitan Health Networks' Patient-Centered Medical Home Pilot Delivers Outstanding Results
Collaborative Program with Humana Proves Valuable Healthcare Model in Caring for Medicare Advantage Customers
WEST PALM BEACH, Fla.--(BUSINESS WIRE)--Metropolitan Health Networks, Inc. (NYSE AMEX:MDF), (“Metropolitan” or “Metcare”), a leading provider of healthcare services in Florida, today released the utilization, financial, and quality results from the first year of its Patient-Centered Medical Home (PCMH) pilot program that was sponsored by Humana. The 12-month analysis of outcomes revealed compelling results in all three categories.
The Pilot Program Overview
In August of 2008, Metcare and Humana agreed to collaborate on a pilot program to formally study the impact of the PCMH model in a Medicare Advantage (MA) capitated group, establishing specific utilization, financial, and quality metrics. The pilot began November 1, 2008 and concluded on October 31, 2009. Baseline measures were determined from medical claims for the period November 1, 2007 to October 31, 2008, and a matched control group was identified and tracked for similar measures. This group represented Medicare Advantage HMO customers seen by primary care physicians within the same markets under a capitated risk arrangement but in a traditional medical practice model.
The 12 month Results
Utilization:
Hospital days per 1000 customers dropped by 4.6 percent compared to an increase of 36 percent in the control group.
Hospital admissions per 1000 customers dropped by three percent, with readmissions running six percent below Medicare benchmarks.
Financial:
Emergency room expense rose by only 4.5% for the Metcare group compared to an increase of 17.4% for the control group.
Diagnostic imaging expense dropped 9.8 percent compared to an increase of 10.7 percent for the control group.
Pharmacy expense increases were limited to 6.5 percent versus a 14.5 percent increase for the control group.
Overall medical expense for the Metcare group rose by only 5.2 percent compared to 26.3 percent increase for the control group.
Quality:
Preventative breast and colorectal cancer screening was 13.3 percent and 6.3 percent higher respectively, compared to the control group.
Seasonal influenza vaccination rates increased nine percent to 64 percent, compared to the national average of 43 percent.
Average LDL cholesterol levels dropped by 1.8 percent, and customers with levels below 100 (a target level) rose by 4.0 percent.
Ninety-four percent of diabetic patients had an A1C level of less than nine percent.
Customer satisfaction results improved or stayed the same in 45 of 61 categories.
Commenting on the results, Michael Earley, Chief Executive Officer of Metropolitan Health Networks, Inc., stated, “In 2008, a strategic initiative was set into motion by Metropolitan to transform a number of our medical practices from a traditional medical practice model to a PCMH model. With the release of today’s exemplary study results, we could not be more pleased. This is just the beginning. Under the PCMH model, we are experiencing levels of quality never before achieved in our system while reducing expenses across our spectrum. PCMH empowers the primary care physician, a shrinking resource, with the right tools to take the leading role in their patients’ overall healthcare plan, allowing them to deliver better care and better outcomes. Under PCMH, we are delivering unprecedented and measurable healthcare reform and savings without cutting benefits. Working within our means and without government intervention, we think this is an idea whose time has come. It is the logical and practical future of healthcare delivery.”
The Process of Change
“The transformation began by performing a comprehensive practice evaluation, focusing on process, workflow, forms, and policies and procedures,” stated Jose Guethon, M.D., M.B.A., President and Chief Operating Officer of Metropolitan Health Networks, Inc. “Considerable time was devoted to staff education and training on customer service and engagement. This was necessary to emphasize and hardwire the principle of what we call patient-centeredness. Because the PCMH model is a team-approach to care, the culture and attitudes among the staff at the medical practice had to change. This also had financial implications for us. While Metropolitan’s revenues are a mix between fee-for-service and capitation, the primary reimbursement method is capitation, making us financially responsible for all medical services covered by any particular plan for the customers we serve. In order for us to improve both the quality of care and our financial outcomes, it was imperative that we learn to better manage chronic conditions in a cost-effective manner and strive to operate our practices as efficiently as possible.”
“With gradual and measured steps we implemented the change process throughout selected practices,” Dr. Guethon continued. “Ranging from continuous education and staff training, to adoption of health information technology such as practice management systems that include telephonic messaging, electronic prescribing, a disease registry, speech recognition software, and a document management system, we immersed our people in the process of change and gave them the path and tools to succeed and the results speak for themselves.”
The Future
Guethon commented further, “With the power of today’s modern healthcare technology, it gets even better. We are now in a position to implement a fully integrated electronic medical record solution that will have a very positive impact. By leveraging this technology to track and ensure compliance and empowering and engaging patients through such tools as EmmiSolutionsTM , an interactive video health education tool, and ClientIQTM, an on-demand customer satisfaction software solution, we expect that results from the pilot’s second year will be even more impressive. What is exciting is that we think we can take this further. Later this year, we intend to recruit additional PCMHs from among our affiliate network. Metropolitan will develop teams to help facilitate continuous transformation through education, training, and implementation. We intend to be industry leaders in sharing best-practices with respect to building a PCMH.”
About Metropolitan’s PCMH Program
Metropolitan’s primary care practices employ licensed healthcare providers such as family practice and internal medicine physicians, nurse practitioners, RNs, and LPNs. These community-based practices deliver care to over 9,000 of Metcare’s 35,500 total MA patients with a mean age of 72.4 years. The transformation continues into its third year. As a commitment to its program, Metropolitan applied for NCQA’s certification program and expects to be one of the first medical practices in the State of Florida to receive such certification.
The PCMH, as defined by the Patient Centered Primary Care Collaborative (www.pcpcc.net), is an approach to providing comprehensive primary care to adults, youth and children. The key components of a true PCMH include:
Access to care based on an ongoing relationship with a personal physician who is able to provide first contact, continuous and comprehensive care;
Care provided by a physician led team of individuals within the practice who collectively take responsibility for the ongoing needs of patients;
Care based on a whole person orientation in which the practice team takes responsibility for either providing care that encompasses all patient needs or arranges for the care to be done by other qualified professionals;
Care coordinated and/or integrated across all elements of the complex health care system and the patient’s community;
Care facilitated by the use of office practice systems such as registries, information technology, health information exchange and other systems to assure that patients get the indicated care when and where they need and want it in a culturally and linguistically appropriate manner.
For more information on Metropolitan’s PCMH efforts, visit www.metcare.com/patient-centered-medical-home.html.
About Metropolitan Health Networks, Inc.
Metropolitan Health Networks, Inc., with its group of Metcare of Florida primary care practices, is a growing healthcare organization that provides comprehensive healthcare services for Medicare Advantage members and other patients in Florida. To learn more about Metropolitan, please visit www.metcare.com.
ghmm
14 years ago
I had missed this. So Early was fired!
http://www.sec.gov/Archives/edgar/data/1009379/000114036110005088/formsc13d.htm
Nicusa Capital
17 State Street
16th Floor - Box 130
New York, NY 10004
212-293-3402
February 9, 2010
Mr. Eric Haskell
Chairman of the Board
Metropolitan Health Networks, Inc.
250 Australian Avenue, Suite 400
West Palm Beach, Florida 33401
Dear Mr. Haskell and the Board of Directors of Metropolitan Health Networks:
As of February 8, 2010 Nicusa Capital owns 2,119,924 shares, or approximately 5.0%, of the outstanding shares of the Company. As one of the Company's largest shareholders, I am writing to share my views regarding recent actions by the Board of Directors.
I was shocked by the Board's decision to fire Michael Earley. Over the 6 years we have been a significant shareholder in the Company I have had extensive discussions with Mr. Earley on various business-related issues. I regard Mr. Earley as a talented CEO with strong management and strategic skills, and an understanding of the changes underway in the health-care industry. Furthermore, Mr. Earley has the trust of the Company's senior management. As such, I have the utmost confidence in him and it is clear to me that Mr. Earley is the best CEO candidate to run the Company. Enclosed please find a copy of the letter I wrote to the Board on October 7, 2008, articulating my support for Mr. Earley and his management team; I stand by that letter today.
I have little confidence that the Board will be able to find a more qualified candidate to run the Company and believe the process will be disruptive to the organization. Moreover, I believe the timing is troubling, coming when significant changes to the industry are being contemplated in Washington, D.C., and after the Company has demonstrated consistent and strong operating performance. As such, I want the Board to understand that it does not have my support as a shareholder.
Additionally, I believe the Board could be more proactive on other issues which directly affect shareholders. The five most critical steps the Board needs to take to restore my confidence are:
•
Reinstate Mr. Earley as CEO.
•
Support Mr. Earley in reconstituting the Board to be more responsive to shareholders' interests and his needs as a manager.
•
Accelerate the return of excess cash to shareholders by considering such options as a tender offer to existing shareholders.
•
Cease any contemplation of any significant strategic alternatives for the Company at the Board level. As stated above, the Board no longer has my confidence, and I do not believe it has the experience to negotiate any transaction that will result in full value being achieved for shareholders given the current uncertainty in the health-care industry and turmoil in the Company's senior management.
•
Direct Dr. Martin Harrison to not seek re-election to the Board. While he may be an outstanding physician, it is not clear that he brings any value as a Board member. If Dr. Harrison were not on the Board, his consistent selling of shares might not send such a strong negative signal to the market. His actions have effectively put a cap on the stock price and run directly counter to the desired effect of the Company's ongoing share re-purchase program.
I expect a prompt response from the Board.
Sincerely
Paul Johnson
Managing Member
stanu78
14 years ago
ghmm... Really good question. We have been discussing about that particular topic for a long time (more than a year) about 5-6 years ago (as MDF financials was very shaky back then) and then we stopped talking about it because seems that it seems to be win win situation for Humana to subcontract their patient care to MDF (and then 6 years later, HUM and MDF relationship seems to be just fine, so maybe the risk is not too high, but it's out there.. it's possible that Humana and MDF break of their relationship). and if that is the case, then MDF will be very crippled (I would guess they will cease their business altogether, as their retail , non-humana related is peobably only less than 20% of their total business, if I remember the number correctly. at one point 92% of their business was Humana). Because of that reason I think MDF tried to open/be their HMO business and recently they sold it to Humana after a couple years of losses on the HMO division (i.e. it's not easy to operate/build HMO business, and MDF expertise is apparently PSN)
What more likely to happen IMO (if the current relationship have to change drastically towards the worse for MDF) to MDF is HUM will buy MDF at a depressed price (with the threat of leaving MDF altogether if MDF doesn't accept the bid).
It's not easy to open a PSN service in the MDF established area (of similar network coverage) for HUM to switch to.
And again I think it is a win win situation for HUM and MDF right now, so I don't think HUM will risk, just to squeeze a bit more profit.
and if you see MDF is a low margin business. high sales and low bottom line profit, while HUM is higher margin (they take their cut and let MDF carry the risk).
And in some ways I think HUM will be better off if MDF is doing well. If MDF is about to go under, HUM will get a headache on figuring out where will I move their patient (Medicare members), and taking them into HUM network (and possibly have to open or subcontract other PSN in the area could probably a headache for them and their members).
This is all just my opinion.
Stan
stanu78
14 years ago
Q3 CC Q&A
Q: where the membership increase in Q3 come from
A: special needs plan (dual eligible), also through Humana sales effort. but hard to say whether it will continue to increase the rest of the year, as usually during this time, membershp actually dropped.
Q: tax lower than previous quarter, why?
A: some tax free interest income in investment
Q: patient center medical home concept. what is the long term payback? will lower the medical cost in the future?
A: this concept driven by large employer (e.g. IBM) to return the primary care practice to be the principal care for the patient, and to improve/bring technology to the primary care. there is incremental cost to put this model (investing in EMR, hope to get reimbursed by govt but bottom line if we don't think this will improve the quality of care in the long term, we won't do it).
Q: weighted average OS for Q309?
A: diluted 45.5M Q309. 53M for Q308. 87,000 more shares bought recently (in Q3)
Q: patient center model. will it bring medicare patient in too?
A: we believe the senior/medicare patient is key population but the patient care will serveice broader range of people which will bring stability (diversified?). could bring much larger population (govt sector healthcare), includig the non medicare population.
Q: what % of total doctors are in your practices (vs contracts). do you find it hard to find new doctors?
A: about 26-27% of the doctors are in our own practices. we're not interested to buy practice just for the practice and install new doctors (many has agreed to stay for some time to give us time to transition). it's definitely a challenge to attract doctors, and the patient care model help in our recruitment effort.
Q: patient mix in your own doctor, will you also get revenue from the fee for service
A: yes, we do
Q: 2010 outlook. reduction in benefit in medicare advantage. in open enrollment process, do you actually see the benefit reduction?
A: yes. and the plan is available to public as oct (15?). most of 2010 benefit is decreased. should also impact/ofset the reduced in premium
my additional comment on CC and q3 result and 2010 plan:
1. Overall good result, but more importantly they are continue to set for the long run (not looking for quick gain but setting for the continuity of the business, and I like that). Having said that they will continue to try to improve shareholder value and their business by looking at acquisition opportunity (if there is an opportunity)
2. They are updating their old (paper based) system to a computerized documentation system which should help efficiency in the long run (needs money to invest for this system but it will be good for the long term)
Great job Mike Earley on leading MDF (and setting MDF for long term success as it will navigate through the big changes in the regulation, benefit/premium cuts, post-HMO sale, and diversifying the business with the patient center care model)!
Disclosure: I own MDF shares.
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