WellPoint Earnings Down 3% for the Quarter

WellPoint Health Networks Inc., a health care company based in Woodland Hills, reported a slight dip in earnings, despite a 13% surge in revenue, for the first quarter that ended March 31.

WellPoint posted a profit of $59.5 million for the first quarter, down 3% from $61.6 million in the same three-month period a year earlier. Revenue rose to $768 million from $681 million a year earlier.

Leonard Schaeffer, chief executive of WellPoint, said earnings dipped “primarily because of continued competitive pressures on premium levels and an increase in medical costs, primarily for hospital services.” Medical costs rose to $530 million in the first quarter, up 16% from a year earlier, the company said. Meanwhile, administrative costs rose 17% to $87.5 million.

Membership in WellPoint medical plans totaled 2.8 million at the end of the first quarter, an increase of 326,000 from a year earlier. Much of the growth came in the company’s health maintenance organization, which added 194,000 members over the year and grew by 32%.

Last month, WellPoint announced that it has agreed to merge with Health Systems International Inc., another large Woodland Hills-based health maintenance organization. Combined, the companies would create the nation’s largest publicly traded managed health care company, with more than $6 billion in annual revenue.