WellPoint Health Gains 11% in Profit, Membership

WellPoint Health Networks Inc., a Woodland Hills-based managed health care company, reported 11% increases in profit and membership for the second quarter that ended June 30.

The company posted earnings of $55.4 million for the second quarter, compared to $49.7 million in the same three-month period a year earlier. Revenues rose to $788 million, up 13% from $695 million in the second quarter of 1994.

Membership in the company’s health maintenance organization and other health plans totaled 2.8 million as of June 30, representing a gain of 273,000 members from a year earlier.

For the first six months of the year, WellPoint reported a profit of $115 million on revenues of $1.56 billion, compared to earnings of $111 million on sales of $1.38 billion in the corresponding period of 1994.

Leonard Schaeffer, chief executive of WellPoint, lauded the improved results but said the managed health care industry is “characterized by continued competitive pricing and moderately higher medical cost trends.”

Those pressures led the company to take a number of cost-cutting steps in the second quarter, including a 6.8% reduction in maximum fees paid to physicians in WellPoint’s network of doctors.

A proposed merger of WellPoint with its Woodland Hills neighbor and rival HMO, Health Systems International Inc., is currently being reviewed by the California Department of Corporations, which oversees managed health care companies.