Profits are soaring at two large HMOs.
Increased enrollment and lower medical costs drove earnings at U.S. Healthcare 39% higher in the second quarter ended June 30 to $93.3 million, or 58 cents per share, compared with $67.2 million, or 41 cents per share, in the year-ago period. Revenues rose 12% to $726.9 million.
Blue Bell, Pa.-based U.S. Healthcare's enrollment grew to 1.7 million, an increase of 142,000 for the first half of the year and the largest six-month membership growth in the company's history.
Meanwhile, profits at Rancho Cordova, Calif.-based Foundation Health Corp. rose 33% to $82.2 million, or $2.84 per share, for its fiscal year ended June 30, compared with year-ago earnings of $61.9 million, or $2.05 per share. Revenues rose 13% to $1.7 billion.
The increase came despite the expiration of Foundation's federal CHAMPUS contract in January and in part reflects the August 1993 acquisition of California Compensation Insurance Co.
Fourth-quarter profits rose less than 1% to $19 million, or 66 cents per share, from $18.9 million, or 63 cents per share, in the year-ago period.