Aetna, Hartford, Conn., reported an 11% increase in first-quarter profits after adding more than a quarter-million new members and appointed a new executive to handle its acquisition strategy. Net income for the three months ended March 31 reached $365.8 million, or $2.28 per share, up from $330 million, or $2.12 per share, in the year-ago period. Revenue rose 8% to $4.8 billion. Enrollment climbed by 313,000 people, or 2.4%, year over year to 13.3 million members. The company said it expects to add between 600,000 and 750,000 members this year, up from a prior estimate of between 500,000 and 700,000. It reaffirmed its full-year, per-share earnings outlook of $6.60 to $6.75.
Aetna named Craig Callen, former head of healthcare investment banking at Credit Suisse First Boston, as its new senior vice president of strategic planning and business development, in charge of mergers and acquisitions. The appointment comes as the health insurance industry continues to consolidate. Aetna avoided acquisitions in the past few years as it worked to right itself after a rash of misguided purchases in the 1990s. Having completed its turnaround, the insurer is again scouting for smaller, regional plans in the $500 million range, company officials have said. Separately, Aetna unveiled a new program for the terminally ill, which will provide benefits such as respite care, bereavement counseling, an improved case-management program and end-of-life care-decision support tools. -- by Laura B. Benko