FHP International Corp. on Thursday posted slightly higher earnings for its latest fiscal quarter and at the same time announced that it will be adding a health plan for self-employed people.
Although they did not detail the health plan, FHP officials said it will be substantially less expensive than those offered by competitors. The area's least expensive individual membership in a health maintenance organization is now offered by Kaiser Permanente Health Plan for $129 a month.
The plan will be available through FHP's staff-operated hospitals and clinics, said Wescott W. Price III, FHP's president and chief executive officer.
He is hoping that the plan will attract new members; a million self-employed people in California are without health insurance. The company is hoping to begin offering the plan in early summer, Price said.
Earnings for the company's third fiscal quarter, which ended March 31, were $10.5 million; they were $10.4 million for the same period a year earlier.
The figures for the latest quarter included $4.4 million of a $6.9-million award the company is to receive from its liability insurer. With the award, earnings were 45 cents a share; they were 36 cents a year earlier. Without the award, earnings would have totaled 32 cents a share.
FHP has not collected the award, which was ordered after arbitration with its insurer, but has been advised by its counsel that the amount is collectible.
Revenue for the quarter was $419.3 million, up 24% from $338.2 million in the same period a year earlier.
Company officials attributed the higher revenue to an increase in its membership and the premiums it charges.
Membership on March 31 was 694,000, Price said, an increase of 11% from the same date in 1991.
Earnings are being eroded by the increasing cost of providing health care, said Jack Massimino, chief operating officer. He said the company is trying to contain costs through means including changing the benefits package for Senior Plan members.
The company added a $500 cap to the pharmacy benefit within that plan; seniors can buy into an alternate plan for $39 a month, with no pharmacy cap. Other HMOs have added similar restrictions recently, Massimino said.
FHP reported nine-month earnings, before adding the arbitration award, of $20.5 million, or 62 cents a share; in the same period a year earlier, earnings were $27.1 million, or 95 cents a share. With the award, earnings totaled $24.9 million, or 76 cents a share.
Revenue for the three quarters rose 23%, to $1.2 billion from $944.3 million.