Managed Care

WellPoint Health Newtworks

The Company

WellPoint Health Networks <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: WPL)") else Response.Write("(NYSE: WPL)") end if %> is a large managed health care company with operations in two distinct regions -- its California business operates under the Blue Cross of California name, and outside of the state the company operates under the name UNICARE. Membership in WellPoint's medical plans totaled 5.9 million at the end of the first quarter of 1997, compared with 3.9 million at the end of the first quarter of 1996. The significant increase was primarily the result of 11% same-store growth, the addition of approximately 1.3 million members in March 1997 with the acquisition of the group health and life businesses of John Hancock Mutual Life Insurance Company, and 260,000 members with the acquisition of the commercial operations of Blue Cross of California in May 1996.

WellPoint's strength lies with its diversified product line and its stable medical loss ratio trends. It has recently emerged with some earnings momentum after a protracted struggle with a number of unsuccessful mergers (most notably Health Systems).

Latest Financials

Net income for the first quarter ended March 31, 1997 was $50.8 million, or $0.76 per share. Following WellPoint's recapitalization on May 21, 1996, the company restated the number of outstanding shares for prior periods. If the recapitalization had occurred on January 1, 1996, interest expense, lower investment income, and other costs associated with the recapitalization would have reduced net income in the first quarter of 1996 to $44.9 million, or $0.68 per share, compared with reported net income of $60.1 million, or $0.91 per share.

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