PacifiCare Q3 Profits Triple to $17M Despite Membership Declines
One year after its earnings "plunged sharply," PacifiCare Health Systems Inc. posted a "respectable gain" in this year's third quarter, with profits more than tripling to $17 million from $5.2 million last year, the Orange County Register reports. Even though the company's steep decline in last year's third quarter made the current one-year comparison "more favorable than in the previous three quarters," CEO Howard Phanstiel said PacifiCare is making "real progress." Revenue from its Medicare plans rose 7%, helping to boost the company's overall third-quarter revenue to $3 billion, a 2.4% increase. However, membership in PacifiCare's Medicare+Choice plans declined 3%, and commercial HMO membership fell 15% as PacifiCare "raised premiums and terminated unprofitable contracts." In commercial HMO plans, the percentage of premium revenue spent on medical costs increased to 89.5% from 87.9% a year earlier, while the medical-loss ratio from the company's Medicare+Choice plans fell from 91% to 89%. PacifiCare's stock finished yesterday at $15.49, down $2.54 from Monday and "far below the 52-week high of $40.50 in February" (Wolfson, Orange County Register, 10/31).
Separately, pharmacists at PacifiCare's mail-order pharmacy in Carlsbad have voted to unionize, "making them the first" PacifiCare employees to become union members, the Orange County Register reports. The pharmacists at Prescription Solution, "citing a lack of job security and respect," voted 41-10 last week to join the Nashville, Tenn.-based Paper, Allied-Industrial, Chemical and Energy Workers International Union, which also represents Merck-Medco, the nation's largest mail-order pharmacy. Union officials and PacifiCare management will now begin negotiations on a contract. The company is also "worried that some 175 clerks and technicians at Prescription Solutions may be the next to organize" (Wolfson, Orange County Register, 10/31).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.