PacifiCare Announces 33% Increase in Second-Quarter Net Income
Santa Ana-based PacifiCare Health Systems Inc., yesterday announced a 33% increase in net income in the second quarter as a result of "improved pricing and cost controls," Reuters/Los Angeles Times reports (Reuters/Los Angeles Times, 8/1). PacifiCare posted a net income of $20.3 million, or 56 cents a share, in the second quarter, an increase from $15.3 million, or 45 cents a share, a year earlier, as medical costs "consumed a smaller portion of revenue." In the past year, PacifiCare, the nation's largest operator of Medicare HMOs, has moved to "reduce its dependence" on Medicare business and attract more members to the company's commercial health plans. In addition, PacifiCare has increased premiums and exited some "unprofitable markets." PacifiCare has raised premiums for employer health plans by 15% and for Medicare HMOs by 7% over the past year. However, PacifiCare reported that second-quarter revenue decreased 6% to $2.8 billion as health plan enrollment fell 12% to 3.3 million. PacifiCare CEO Howard Phanstiel said, "I expect that going through 2003 we will have most of our turnaround improvements in place. It will take one or two more quarters after that to se the impact on our fiancial results" (Bennett, Dow Jones News, 8/1).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.