JOHN HANCOCK: SALE OF HEALTH BUSINESS TO WELLPOINT LOOMING

      John Hancock Mutual Life Insurance Co. is negotiating the
 sale of its health insurance operations to WellPoint Health
 Networks Inc., BOSTON GLOBE reports.  Sources warned, however,
 that the deal between the Boston-based insurer and the Woodland
 Hills, CA-based health plan "could still collapse" (Bailey/Syre,
 10/2).  WALL STREET JOURNAL reports that the deal's value could
 not be determined, but it is likely to include "most or all" of
 Hancock's health insurance operations (Scism/Rundle, 10/3). 
 Premiums from Hancock's group insurance business totaled about $1
 billion last year; however, profit from the unit was reported to
 be "less than $10 million," according to the GLOBE (10/2). 
 JOURNAL notes that while the profit margins are "thin," Hancock's
 health care operations "would be of enormous strategic value to
 Wellpoint."
      PERFECT MATCH:  According to the JOURNAL, WellPoint is
 "looking to expand" its business beyond its strong California
 base, while Hancock is "the latest in a line of insurance
 companies to decide to shed health care operations rather than
 plow more money into them to keep abreast of changing health care
 demands of employers."  The sale would add about two million new
 members to the 4.3 million people WellPoint already serves, and
 the acquisition would "bolster its position with large employers
 ... who buy a broad spectrum of health care products." 
 WellPoint's management believes that employers and patients "are
 looking for more choice in health care plans."  The company also
 contends that HMOs have "peaked in popularity," and that
 purchasing insurers like Hancock will allow WellPoint to get
 involved in traditional health insurance and launch "less
 restrictive" forms of managed care like open-access HMOs (10/3).