By Jane Anderson
Centene Corp. is well-positioned to expand in the Medicare
Advantage market while continuing strong performance in Medicaid managed care
as it works to close its acquisition of WellCare Health Plans, Inc.
That's the takeaway from analysts who took a close look at the
company following its most recent investor day, held June 14. Analysts remain
unabashedly bullish on Centene's ability to outperform the market, particularly
with the pending WellCare acquisition, which received its first state approval
— from Kentucky — on June 14. The company expects the acquisition to close
during the first half of 2020.
"While Medicaid remains core, the greatest incremental
opportunity is in the MA segment, which the company is looking to expand,"
said Citi analyst Ralph Giacobbe. Still, he added in an investor note, Centene
appears confident about its chances of winning Medicaid bids in three upcoming
requests for proposal: Texas, Louisiana and Oregon.
Centene CEO Michael Neidorff, who was the highest earning health
plan CEO last year, will have built the company "into a $100 billion
government health benefits powerhouse" once the WellCare transaction
closes, said SVB Leerink analyst Ana Gupte.
Gupte highlighted Centene's transition away from pharmacy
benefit manager CVS Health Corp. to PBM RxAdvance. The investment in RxAdvance,
coupled with similar investments in data analytics firm Interpreta — Centene
increased its ownership stake to 80% in Interpreta last year — have helped to
make technology Centene's "core competency accelerating growth and
innovation while improving and sustaining margins," Gupte said.
From Health Plan Weekly
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