Standard & Poor's has revised its 2002 outlook on the health insurance/managed care industry, to negative from stable, due to mounting negative pressures.
International ratings agency Standard & Poor's (S&P) has revised its 2002 outlook on the health insurance/managed care industry, to negative from stable, due to mounting negative pressures.
A director with Standard & Poor's insurance ratings group Shellie Stoddard said: "Rising medical costs, the current weak economy, and a growing sense of consumerism in health benefit choices are mounting the pressures on the health insurance industry.
"This stress will be felt most acutely by companies with weaker balance sheets, lackluster earnings, and smaller overall scales of membership and market concentration."
In a new report, "Health Insurance/Managed Care Outlook 2002: Negative Pressures Knock Stable Industry Off-Kilter", Stoddard said in the coming year, smaller, geographically concentrated plans would be affected far more than the larger, diverse companies, which have greater resources to combat these negative forces more successfully.
Stoddard's report added that companies that could price ahead of trend, control a niche or regional marketplace, invest wisely in technology, and react to changes in the consumer marketplace would weather the negative downturn.
