While Anthem has posted impressive earnings in the first two quarters of 2019 and raised its guidance twice, investors are questioning Anthem's efficiency as its medical cost ratio grows, according to Seeking Alpha.
Anthem's medical cost ratio, or the amount it pays toward medical claims versus overhead costs, is the highest in the health insurance industry, according to the report. At a recent presentation at the Wells Fargo's Healthcare Conference, Anthem traded lower after quoting its medical cost ratio outlook at 86.5 percent, up from 84.2 percent in 2018.
Growing medical cost ratios may signal healthcare companies are facing an inevitable trend of increasing medical costs. "With the industry trending lower, healthcare stocks look like an opportunity but Anthem's cost struggles make it second or third best," according to Seeking Alpha.
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