Molina Healthcare, Inc. (NYSE:MOH) Q3 2017 Earnings Conference Call Transcript
Nov 02, 2017 • 05:00 pm ET
Ladies and gentlemen, thank you for standing by. Welcome to the Molina Healthcare Third Quarter 2017 Earnings Conference Call.
(Operator Instructions) As a reminder, this conference is being recorded, Thursday, November 2, 2017.
I would now like to turn the conference over to Juan Jose Orellana, SVP of IR. Please go ahead, sir.
Juan Jose Orellana
Thank you, Alex. Hello, everyone, and thank you for joining us. The purpose of this call is to discuss Molina Healthcare's financial results for the third quarter ended September 30, 2017. The Company issued its earnings release reporting these results today after the market closed, and this release is now posted for viewing on our Company's website.
On the call with me today are Joseph White, our CFO and Interim CEO; and Terry Bayer, our COO. After the completion of our prepared remarks, we will open up the call to take your questions. (Operator Instructions)
(Forward-Looking Cautionary Statements)
I would now like to turn the call over to our CFO and Interim CEO, Joseph White.
Thank you, Juan Jose, and thanks to all of you for joining us today. The results we reported this afternoon demonstrate that we are strengthening our business and positioning it for long-term success. While we still have much work ahead of us, our third quarter results demonstrate that we are moving in the right direction.
Today, we reported a net loss for the quarter of $1.70 per diluted share, but restructuring charges and impairment losses net of adjustments to our Marketplace premium deficiency reserve amounted to $2.83 of that loss. If we look past those items, we can see that underlying operations showed substantial improvement this quarter.
I am pleased with the progress we have made on the restructuring initiatives we outlined last quarter. Once I have discussed our financial performance, I will provide more detail on those efforts.
When I told you last quarter that we were taking aggressive, urgent and determined actions to improve our financial performance, the benefit of those actions was only potential in nature. Today, we can point to the first actual measurable reductions in both medical and administrative costs.
Let's start with medical costs. Our medical care ratio was 88.3% for the quarter or 89% after we removed the benefit of a $30 million reduction to our Marketplace premium deficiency reserve. To be clear, the medical care ratio for our core business, Medicaid and Medicare combined, remains unacceptably high at 91%. But we did see some meaningful sequential improvements in some of our most challenging markets, with Illinois, New Mexico and Puerto Rico reflecting noticeable improvements since last quarter. Also as part of our restructuring effort, we are now refining medical cost improvement work streams that we believe will benefit our overall medical cost performance between now and the end of 2018.
As with medical costs, general and administrative expenses are also moving in the right direction. Our general and administrative expense ratio of 7.6% for the third quarter of 2017, was 50 basis points lower than