Citing reduced membership in its health plans and a need to become more competitive, Aetna announced Thursday that it will cut 2,750 jobs, or 9 percent of its workforce, over the next year.
Aetna, despite remaining one of the largest health insurers in the U.S., has been trying to slim down, according to the Reuters news agency. It has been shedding unprofitable plans, including its government Medicare business, after posting losses and undertaking a series of acquisitions that were widely viewed as missteps.
Total membership in its health plans fell about 595,000 during the second quarter, to 14.4 million, Reuters reported. On Aug. 1, the Hartford, Conn.-based insurer reported a big increase in quarterly earnings, thanks to cost cutting from the reorganization.
The company also gave itself a more optimistic outlook for the full year, due to cost cutting as well as forging better financing deals with hospitals. Climbing health care costs have forced some insurers to trim their coverage while also seeking higher premiums from employers.
Amid this year's general downturn in the stock market, Aetna's stock - and that HMOs in general - have been safe bets this year. Aetna's stock is up about 19 percent so far in 2002, while the index of major HMO stocks has risen about 12 percent, Reuters reports.
To read the Reuters article, via USA Today, click here.
