SOURCE: Medica

May 27, 2005 12:00 ET

Medica Releases 2004 Financial Results

Another Year of Double-Digit Growth, 1% Operating Margin

MINNEAPOLIS, MN -- (MARKET WIRE) -- May 27, 2005 -- Minneapolis-based Medica continues to be one of the nation's fastest growing health plans. In addition, in keeping with its nonprofit mission, Medica in 2004 operated at very nearly a break-even basis.

Medica's membership grew 12 percent in 2004 to more than 1.2 million, continuing a three-year trend. Membership grew 12 percent in 2003 and more than 3 percent in 2002. "We're a nonprofit, so growth for growth's sake is not important to us," said Medica President and CEO David Tilford. "However, growth is the best overall barometer of our success at providing the combination of value, products and service that employers and consumers want."

Medica's operating margin in 2004 was one percent, or one penny per dollar of revenue. Other highlights from the company's 2004 financial results include:

--  Revenue increased to $2.1 billion in 2004 from $1.9 billion in 2003.
    
--  Net operating income was $21.5 million compared to $42.8 million in
    2003.
    
--  Administrative expenses (excluding broker commissions, premium taxes
    and assessments) for commercial customers decreased to 6.6% of premium from
    7.6% in 2003.
    
--  Taxes and assessments paid by Medica increased 52%, largely for two
    reasons: 1) higher premium taxes; 2) higher pool losses from the Minnesota
    Comprehensive Health Association (MCHA), a fund providing health coverage
    for otherwise uninsurable Minnesotans.
    
--  The proportion of revenue spent on medical care remained fairly
    constant at about 87%.
    
--  Generic drug and other initiatives helped Medica achieve $44 million
    in medical cost savings for customers and members during 2004.
    
Medica reports audited financial results for its entire health plan business. It does so in an effort to encourage the reporting of consistent, meaningful financial results. Comparisons to other Minnesota plans should be made carefully since some report only portions of their business.

About Medica

Medica (www.medica.com) is Minnesota's largest HMO, largest PPO and leading nonprofit and independent provider of health plans. Medica has 1.2 million members and nearly 27,000 providers in a regional network service area that includes 98 percent of Minnesotans and a growing number of residents of Wisconsin, North Dakota and South Dakota. Medica also offers national network coverage to employers who also have employees outside the Medica regional network.

HealthLeaders magazine in 2004 honored Medica for the nation's top health plan leadership team. Medica has the highest accreditation status, Excellent, from the National Committee for Quality Assurance (NCQA®) for its Minnesota and North Dakota Medicaid HMO plans and commercial health plans.

Contact Information

  • For more information, contact:
    Greg Bury
    Medica
    (952) 992-8437
    Cellular: (612) 810-4556
    E-mail: greg.bury@medica.com