A.M. Best Affirms A- Excellent Rating Of Health Plan of Nevada.OLDWICK, N.J.--(BUSINESS WIRE)--May 13, 1999-- A.M. Best Co. today affirmed the A- (Excellent) Best's Ratings Best's rating A rating A.M. Best Co. assigns to insurance companies based on the company's ability to meet its obligations to its policyholders. of Health Plan of Nevada Inc., Las Vegas Las Vegas (läs vā`gəs), city (1990 pop. 258,295), seat of Clark co., S Nev.; inc. 1911. It is the largest city in Nevada and the center of one of the fastest-growing urban areas in the United States. , and its affiliated life/health company, Sierra Health & Life Insurance Co. both operating subsidiaries of Sierra Health Services health services Managed care The benefits covered under a health contract Inc. The affirmation reflects Sierra Health Services' consolidated operating profile, its dominant position in the southern Nevada health-care market, its diverse product portfolio, historically very good earnings and favorable outlook for continued commercial membership growth. Sierra Health Services--a fully integrated managed-care company--serves more than 1.3 million members through its HMO HMO health maintenance organization. HMO n. A corporation that is financed by insurance premiums and has member physicians and professional staff who provide curative and preventive medicine within certain financial, operations, managed-indemnity product line, administrative services, TriCare program and workers' compensation workers' compensation, payment by employers for some part of the cost of injuries, or in some cases of occupational diseases, received by employees in the course of their work. programs. Sierra is the largest health-care provider in Nevada. The parent company's large presence provides Health Plan of Nevada with several competitive advantages, including strong provider relations and management utilization capability. Sierra also provides health-care services to approximately 606,000 TriCare beneficiaries in the Mid-Atlantic and Northeast regions as well as Nevada and Missouri. Sierra will continue to seek opportunities to expand its government contract business to other regions of the country. Health Plan of Nevada serves more than 160,000 commercial members and has more than 45% of the market share of all HMO members in southern Nevada. The company serves the commercial and Medicare risk markets and, through other Sierra subsidiaries, offers dental, vision, administrative services and expanded mental health benefits to employers. In addition, Health Plan of Nevada is situated in a very attractive market for growth opportunities. In October 1998, in an effort to expand and diversify its operations from its core southern Nevada market, Sierra purchased Kaiser Foundation The mission of the Kaiser Foundation is to assist individuals and communities in preventing and reducing the harm associated with problem substance use and addictive behaviours. External links
penetration - the act of entering into or through something; "the penetration of upper management by women" in the Texas market and enhanced revenue streams. The acquisition increased Sierra's financial leverage to 44%, which is slightly above average for the current ratings on the operating companies operating company A business that engages in transactions with outsiders. . However, A.M. Best notes that operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before in its core southern-Nevada market will continue to be strong, despite consolidated earnings pressure overall. The negative outlook reflects the impact of Sierra Health Services' acquisition of Kaiser Foundation Health Plan of Texas. The acquisition has increased both the financial and operating leverage Operating Leverage A measurement of the degree to which a firm or project relies on fixed rather than variable costs. Notes: The higher the degree of operating leverage, the greater the potential danger from forecasting risk. , which has moderately lowered Sierra's financial strength position. Also, Sierra needs to improve the operating performance at the Texas HMO operations, which has experienced significant losses in a highly competitive Texas HMO market. To the extent that Sierra falls short of A.M. Best's expectations or other material surprises emerge, the ratings may be adjusted. However, Sierra has implemented a positive turnaround plan to improve operating fundamentals in the Texas market. These key initiatives are contingent on Adj. 1. contingent on - determined by conditions or circumstances that follow; "arms sales contingent on the approval of congress" contingent upon, dependant on, dependant upon, dependent on, dependent upon, depending on, contingent Sierra's ability to transfer its integrated health-system expertise to the Texas market. In addition, A.M. Best has assigned a B+ (Very Good) rating to Texas Health Choice. The rating reflects its role as a strategic subsidiary of Sierra Health Services, as well as its good market position in the Dallas/Fort Worth and Houston metropolitan areas. These strengths are offset by historically very weak operating earnings, as well as extremely competitive pressures in its markets from large, well-established managed-care organizations. A.M. Best Co., established in 1899, is America's oldest and most widely recognized insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com. |
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