PacifiCare Health Systems Inc. said Thursday that its profit rose 25% in the first quarter. The catalysts: an increase in senior health plan membership, a big acquisition and growth in its mail-order drug delivery business.
The Cypress-based health plan operator said it posted net income of $86 million on revenue of $3.4 billion in the quarter, compared with a profit of $67 million on sales of $3 billion a year earlier.
Chief Executive Howard Phanstiel said the company’s earnings were at the high end of its previous guidance, even after including $5 million it spent getting ready for Medicare’s new prescription drug benefit that starts in 2006.
The company raised its 2005 profit expectation to $322 million to $335 million.
PacifiCare said its first-quarter commercial revenue was up 16%. The unit was helped by PacifiCare’s buy of American Medical Security Group, a Wisconsin-based preferred provider organization.
Senior revenue was up 15%, primarily because of a 9.6% premium hike for Medicare Advantage HMO. It also saw a 4% bump in membership.
Specialty revenue was up 48% compared to last year. A lot of the specialty unit gains came from Prescription Solutions, PacifiCare’s fast-growing drug benefit management unit that’s based in Costa Mesa.
Prescription Solutions is looking to expand its distribution operations to handle Medicare drug benefits in the next few years.
