"OXFORD HEALTH PLANS INC (OXHP)Quarterly Report (SEC form 10-Q)"
"Net Losses; Turnaround Plan"
The Company incurred a net loss of $291 million in 1997 and $45 million in the first
three months of 1998 and expects to incur additional losses in 1998, the extent of
which cannot be predicted at this time. As a result of losses at certain of its HMO
and insurance subsidiaries in 1997, the Company has had to make capital
contributions to certain of its HMO and insurance subsidiaries and expects that
additional capital contributions will be required to be made by the Company in
1998.
The Company's ability to control net losses depends, to a large extent, on the
success of its turnaround plan, which includes improving provider contracts,
implementing certain medical management programs and improving operating
margins by, among other things, strengthening commercial underwriting, reducing
administrative and medical costs and, where appropriate, refining benefit plans and
increasing premiums. There can be no assurance that new management will be
successfully retained or that the other elements of the turnaround plan will be
implemented in the manner described herein, or, if implemented, will be successful or
that other efforts by the Company to control net losses will be successful. Moreover,
the Company cannot predict the impact of adverse publicity, legal and regulatory
proceedings or other future events on the Company's operations and financial
results, including ongoing financial losses. There can be no assurance that new
management will be successfully retained or that the other elements of the
Turnaround Plan will be implemented in the manner described herein, or, if
implemented, will be successful or that other efforts by the Company to control net
losses will be successful.
Implementation of the Company's turnaround plan depends, in part, on its ability to
implement measures to reduce its medical and administrative costs below existing
levels. The Company currently believes that, it has the ability and intent to reduce
certain costs, including those specified in the turnaround plan and others.
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