Question-and-Answer Session
Operator
Ladies and gentlemen we will now begin the question and answer session. (Operator Instructions) Due to limited time and in fairness to other listeners we ask that you please limit yourself to one question and one related follow per turn. Our first question comes from the line of Justin Lake with UBS. Please go ahead.
Justin Lake – UBS
The first question I have is just on medical costs specifically. You mentioned a couple of things there but it also seems like you’re seeing these higher costs in specific geographies potentially. Is there anything you can tell us on where it’s coming geographically? And how much of this do you think is an issue with just how you priced the business for 2008 given how 2007 costs trends where obviously you didn’t have full visibility on them versus and actual increase in costs trend in 2008?
Wayne S. DeVeydt
In terms of your question, where we’re seeing the medical cost increase is across a number of our segments. In our senior business we are clearly seeing it in our senior Medicare Advantage specifically. In addition, I would tell you that our small group trends are up as well as individual. This is an example of where I would say it is generally in most markets we missed the trend for 2008. We’ve gotten more insight into the data after January and February and having the benefit of hindsight we know we missed it by 50 basis points in 07 and that essentially gets compounded with our pricing as we move forward.
Operator
Our next question will come from the line of William Georges with JP Morgan. Please go ahead.
William Georges – JP Morgan
I’d just like to follow up a little bit more on Justin’s question. If you can give us as much specificity as you have on the different moving parts of the four commonly discussed components of trend where are you seeing pressure?
Angela F. Braly
I’ll begin to address that Bill. We are seeing some high dollar claims especially in neonatal care and oncology and we are seeing physician trends increasing. So, we are taking a number of actions around that, around cost of care generally, around recontracting, working with vendors. We do have a medical management program specifically for neonatal care, we do have radiology management programs which are now in the second phase and we are addressing, we think, through recontracting with providers and others some of the physician trends that we are seeing.
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