PACIFICARE: Earnings Are Better Than Expected
Santa Ana, CA-based PacifiCare Health Systems Inc. yesterday announced that "first-quarter earnings fell 4.9%, less than expected, as it worked to integrate an acquired business and get a handle on rising medical costs." Overall, net income "fell to $41.3 million ... from $43.4 million" in the same quarter of 1997. Revenues for the quarter "climbed 29% to $2.38 billion from $1.84 billion." According to the Bloomberg News/Los Angeles Times, PacifiCare "has been struggling to keep premiums in line with rising medical costs as it digests its $2.2 billion acquisition of FHP International Inc." The company "said it has increased the number of contracts in which doctors get paid a flat fee per patient," a success that "has helped hold down costs in commercial medical plans." PacifiCare President and CEO Alan Hoops said, "After a disappointing 1997, we are pleased to begin 1998 with such a solid start. Our efforts to integrate the FHP operations are proceeding smoothly and on schedule" (5/6).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.