Cigna reported solid revenue growth in 2013 but the insurer plans on being proactive in order to curtail rising costs.
The company saw revenue grow 11 percent last year to $32.4 billion, and adjusted income grow by about that rate as well, to $1.9 billion.
[See also: Humana takes Q4 hit, but remains positive about 2014 outlook]
Cigna's global supplemental benefits segment grew 27 percent, while group life/disability and global healthcare each rose about 10 percent. But still analysts were disappointed with what several said seem like rising cost trends.
The insurer's medical loss ratio for the commercial risk market was 86.6 percent, about 2 percent more than some analysts were expecting, and the Medicare Advantage MLR was 86.4 percent – continuing a year-over-year increase from 82.5 percent in 2012 to 84.8 percent in 2013.
Like other insurers, Cigna factored into its outlook reductions in Medicare Advantage, said CEO David Cordani said in a conference call last week, but, in many U.S. healthcare markets, "the cost per episode of care is going up," if not necessarily "the severity of illness."
Cordani said the company's healthcare strategy is relying on establishing what Cordani called "risk-aligned" models with providers, including capitated and shared-risk contracts.
The company is planning to "use the activated physicians to guide their patients to higher-value facilities or free-standing clinics," and possibly trying to adjust reimbursement or ending contracts with certain facilities.
Cordani also told analysts and investors that the company is going to continue its diversification strategy, especially the "go global" idea – one of three areas he thinks are ripe for acquisitions this year, along with "U.S. seniors and/or duals" and "retail-based capabilities."
In the area of the much-talked about health insurance exchanges, things are moving slowly. Cordani said the company doesn't expect public HIXs to be profitable for the next year, at least, and the private exchange space, which Cigna just entered with the launch of its own, is "in the early stages of innovation."