See which companies finished 2019 on a strong note and which ones struggled heading into 2020.
For yet another quarter, insurers produced some of the strongest earnings reports among publicly traded healthcare companies.
Buoyed by a stable market to end 2019, especially compared to the slide seen at the end of 2018, healthcare organizations largely produced strong year-over-year growth.
Some companies, like Cigna Corp. and CVS Health, benefited from megamergers that aided the bottom line, with Centene likely to enjoy similar support following the closure of its $17.3 billion purchase of WellCare Health Plans earlier this year.
However, some providers like Partners HealthCare and Community Health Systems reported weak financials at the end of the year and aim to see a turnaround in 2020.
Below is a list of healthcare's winners and losers from 2019 and the Q4 earnings season:
Winners:
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Two weeks after closing its $17.3 billion megamerger with WellCare Health Plans, Centene Corp. posted full year revenues of $74.6 billion.
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The company's year-end diluted earnings per share (EPS) was $3.14, up 39% year-over-year, while its adjusted EPS was $4.42, an increase of 25%.
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Centene's Medicaid membership increased by nearly 300,000 members in 2019, while its total at-risk membership jumped by more than 1 million members.
- CVS Health finished 2019 with more than $256 billion in total revenues and an operating income of $12 billion.
- The Woonsocket, Rhode Island–based company also generated cash flow from operations of $12.8 billion and boosted its financial guidance across several metrics for 2020.
- Looking ahead, CVS projects its operating income will be between $12.8 billion to $13 billion in 2020, while its adjusted EPS is expected to be in the range of $5.47 to $5.60.
Related: Cigna, Molina, and Teladoc Among Healthcare's Winners and Losers in Q3
- The Minnetonka, Minnesota–based insurer posted an adjusted EPS of $15.11 for 2019, which the company expects to rise to a range between $16.25 and $16.55 per share in 2020.
- The company hit its revenue projection for 2019 and now expects to produce at least $260 billion in 2020, according to a series of presentations about UnitedHealth's business strategies last month.
- UnitedHealthcare achieved revenues of $48.2 billion and earnings from operations of $2.1 billion. For the full year, UnitedHealthcare produced revenues of $193.8 billion, up 5.6% year-over-year.
- In its first full year since merging with Express Scripts Holding Co., Cigna Corp. reported total revenues of $153.6 billion and shareholders' net income of $5.1 billion, which was up 28% year-over-year.
- Cigna posted adjusted revenues of $140.2 billion during 2019 and adjusted income from operations of $6.5 billion.
- The insurer finished 2019 with a total medical customer base of more than 17.1 million, with total customer relationships above 171 million.
Middle:
- Encompass Health enjoyed a robust Q4 2019 but posted weak financials for the year as a whole.
- During the most recent quarter, Encompass reported net operating revenues of $1.1 billion, an increase of 8.1% year-over-year, along with an adjusted EBITDA of $238.2 million, up 7.4% year-over-year.
- However, the Birmingham, Alabama–based post acute care provider saw cash flows slide by nearly 17% year-over-year, with adjusted free cash flow down by 4%.
- Magellan Health's net revenue for 2019 slid just over 2% but other financial metrics showed growth throughout the year.
- Magellan reported net income of $55.9 million for the full year, a 131.2% increase compared to 2018.
- The company also achieved diluted earnings per share (EPS) of $2.28, up 135.1% year-over-year, along with a segment profit of $252.7 million, up 11% over the same period.
Losers:
- The Boston-based provider organization reported an operating income of $45 million during Q1 2020, down from $114 million in Q1 2019.
- Partners saw its operating income from healthcare provider activity drop from $118 million in Q1 2019 to $55 million in Q1 2020, while its insurance arm generated an operating loss of $10 million.
- The system also absorbed $352 million in Medicare, Medicaid, and Health Safety Net shortfalls, a 5% increase year-over-year which the provider attributed to changes in government reimbursement rates.
- The German-based dialysis company finished 2019 with revenue growth of 6% year-over-year but struggled in several other major metrics.
- For the quarter, Fresenius recorded an operating income increase of 1% but suffered significant drops in net income and basic earnings per share (EPS), which dropped 19% and 17%, respectively.
- Fresenius' operating income fell 25% compared to 2018, while both its net income and basic EPS dropped 39% year-over-year.
- Community Health Systems endured a tough end to 2019, as several quarterly and year-end financials worsened compared to similar periods in 2018.
- The Franklin, Tennessee–based for-profit hospital operator saw its net loss for Q4 2019 balloon to $373 million, a deterioration compared to the company's net loss of $328 million in Q4 2018.
- CHS also posted a net loss per share of $3.27, a 9.9% decline in admissions, and net operating revenues of $3.28 billion, down 4.8% year-over-year.
Jack O'Brien is the Content Team Lead and Finance Editor at HealthLeaders, an HCPro brand.