After less than a year, Aetna president Brian Kane is out at CVS Health, it was announced today at an investor call. The change was made to address the continued pressure in the company’s healthcare benefits business.
Aetna president Brian Kane has left CVS Healthcare, and CEO Karen Lynch will assume direct leadership of the company’s Health Care Benefits segment. The move was made to address the continued pressure in the company’s healthcare benefits business, Lynch said during an investor call this morning.
Kane had joined the company in September 2023.
“The majority of our businesses are performing well, and we continue to drive the integrated value of our company by executing on our strategy to connect people to the care and the coverage they need,” she said. “However, we are disappointed by the current performance and outlook for the healthcare benefits segment, and I have decided to make leadership changes effective immediately.”
Although revenue for Aetna and CVS’s healthcare benefits segment for the second quarter of 2024 increased to $32 billion, up 21.4% compared with last year, the medical benefit ratio has also increased— from 82.2% in the second quarter last year to 89.6% this year. The company said this was the result of increased utilization, a decline in star ratings in Medicare plans, higher acuity patients requiring higher levels of care in Medicaid programs, and a change in the risk for the healthcare exchange business.
Thomas F. Cowhey, executive vice president and chief financial officer of CVS Health, said during the investor call that medical cost trend is increasing, and the company may add to medical reserves.
This has led CVS Healthcare to lower its outlook for the remainder of the year. “Full year medical benefit ratio to be in a range of 90.6% to 90.8%,” he said.
“Following the close of the second quarter, we saw indications of potential trend acceleration, which we have contemplated in our revised guidance range,” Lynch said. “We saw an increase in the dislocation between Medicaid acuity level and rate. We will continue working closely with our state partners to advocate for rates that more closely align with changes in acuity within the quarter.”
In addition, CVS Health has announced that Katerina Guerraz, executive vice president and chief strategy officer will be chief perating officer of the Health Care Benefits segment. She is a 20-year Aetna veteran with commercial and Medicare experience.
Breaking Down Health Plans, HSAs, AI With Paul Fronstin of EBRI
November 19th 2024Featured in this latest episode of Tuning In to the C-Suite podcast is Paul Fronstin, director of health benefits research at EBRI, who shed light on the evolving landscape of health benefits with editors of Managed Healthcare Executive.
Listen
In this latest episode of Tuning In to the C-Suite podcast, Briana Contreras, an editor with MHE had the pleasure of meeting Loren McCaghy, director of consulting, health and consumer engagement and product insight at Accenture, to discuss the organization's latest report on U.S. consumers switching healthcare providers and insurance payers.
Listen
FDA Clears Phase 2 Trial of Cannabis in PTSD
November 20th 2024After a three-year negotiation, the FDA has dropped its objection to allowing patients to self-titrate dosing of smoked cannabis. But regulators want to see additional information about the device that will be used for inhalation.
Read More