Cigna Corp., Philadelphia, shuffled its top leadership and said 2003 earnings would fall short of expectations because of higher medical costs partly attributable to "certain provider contract terms" and lower membership. The company also announced five initiatives to control medical costs, including standardizing and renegotiating provider contracts. Cigna said its chairman and CEO, Edward Hanway, resumed direct control of the company's healthcare business, and Patrick Welch, president of Cigna Healthcare, will resign after a brief transition period. Cigna estimates 2003 income from healthcare operations will be $500 million to $550 million, compared with the previous estimate of $675 million to $725 million. Membership is expected to drop 10% from the year-end 2002 level of 13.1 million. -- by Cinda Becker
Cigna to overhaul healthcare business
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