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PacifiCare Reports 1st Quarter Net Loss

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NU Online News Service, May 2, 2:36 p.m. – PacifiCare Health Systems Inc., Santa Ana, Calif., is reporting an $859 million net loss for the first quarter on $2.9 billion in revenue, compared with $13 million in net income on $3 billion in revenue for the first quarter of 2001.

Net results for the latest quarter include an $897 million, non-cash charge for reducing “goodwill,” or the stated value of past acquisitions. If the accounting change were excluded, income would have increased to $38 million, from $13 million, PacifiCare says.

The managed care company provided or administered major medical coverage for 3.3 million people at the end of the quarter, down from 3.8 million people a year earlier.

Average revenue per member increased 14%, to $504.

Revenue was down during the quarter because of a retreat from the Medicare managed care market and a 11% decrease in commercial membership, but average revenue for each of the remaining members was up, PacifiCare says.

Thanks to rate increases, the commercial medical loss ratio was down 2 percentage points from the first quarter of 2001, PacifiCare says.