FOUNDATION HEALTH: Reports Increased First Quarter Earnings
Woodland Hills-based Foundation Health Systems Inc. today reported first quarter earnings for 1998, announcing a net income of $26.2 million for the quarter, compared with $47.6 million from a year ago. The company reported a 23% increase in revenues, rising from $1.8 billion to $2.2 billion, and first quarter diluted earnings of 22 cents per share, compared with 38 cents per share from a year earlier. FHS' health plan premium revenue rose 30% from last year to $1.8 billion for the first quarter, largely due to a 35% enrollment increase of 1.1 million members in the company's commercial and state-run plans. "The first quarter results are consistent with our expectations but are not satisfactory or indicative of potential future profitability. They do further reinforce the need for our restructuring efforts now well underway," said FHS Chair and CEO Dr. Malik Hasan.
Counting Up California
In California, FHS' enrollment increased seven percent in the first quarter of 1998. Commercial premiums for California members rose three percent in the first quarter while commercial enrollment declined from the prior year quarter, but rose 17,000 from year-end 1997. Enrollment in Medi-Cal plans rose 83% as participation in the program in Los Angeles County continues to grow. Medicare enrollment increased five percent compared with the year before, but overall growth in the program slowed statewide. "We are downsizing our marketing effort to the individual Medicare market in California," said Hasan. "We are intensifying our focus on contracting efforts with physicians and hospitals to achieve more favorable rates in the face of continuing pressure on Medicare reimbursement rates," he added. FHS is the nation's fourth-largest publicly traded managed health care company (FHS release, 5/5).