The nation's two largest Blue Cross and Blue Shield companies, which intend to merge in 2004, posted significant year-over-year earnings gains for the fourth quarter of 2003 and the full year. WellPoint Health Networks, Thousand Oaks, Calif., saw its fourth-quarter net income surge 51% to $271.5 million, or $1.73 per share. Revenue rose 21% to $5.5 billion. For all of 2003, WellPoint's earnings rose 33% to $935.2 million, or $6.16 per share. Annual revenue rose 17% to $20.4 billion on a 9% enrollment gain to 15 million members. Meanwhile, Anthem, Indianapolis, posted a 21% rise in fourth-quarter profits to $208.8 million, or $1.47 per share. Revenue rose 8% to $4.3 billion. For the full year, Anthem's net income climbed 41% to $774 million, or $5.45 per share, on a 26% rise in revenue to $16.7 billion and an 8% enrollment gain to 11.9 million members. Anthem raised its 2004 per-share earnings forecast to between $6.15 and $6.25, from an earlier estimate of $6.05 to $6.15. WellPoint raised its 2004 per-share earnings outlook earlier this month to $7.10 from $6.90 to $7. In October 2003, the two insurers announced plans to merge in a $16.3 billion deal that would create the nation's largest health insurer and bring Blues plans in 13 states under the control of a single corporation.
Separately, a new study has found that the decade-long trend in mergers and for-profit conversions among Blues plans has had little impact on consumers and likely will continue. A number of Blues plan deals have hit snags in recent months because of increased state scrutiny. But a study of 12 markets by the Center for Studying Health System Change, Washington, predicts that conversion and merger activity will pick up again as Blues plans identify new ways to satisfy regulators' concerns. "Anthem and WellPoint believe the underlying factors driving conversions and mergers will continue and that the newly combined company will be well positioned to resume acquisitions," said Joy Grossman, co-author of the study. The authors also found little evidence of either positive or negative consequences for consumers in states where conversions and mergers have occurred. While only four of the nation's 41 independent Blue plans are for-profit, they cover more than one-fourth of the Blues enrollees across 14 states and Puerto Rico. Read the center's issue brief. -- by Laura B. Benko