Profits up at Anthem, WellPoint

Anthem and WellPoint Health Services, due to merge by mid-year, are coming together as their finances grow stronger.

Anthem, whose home corporate turf of Indianapolis will be the headquarters of the newly combined company, announced in late January that it had earned record profits and revenue in the fourth quarter of 2003. The company said it had earned $208.8 million, or $1.47 per share, on $4.2 billion of revenue in that period. The totals for the fourth quarter of 2002 were $171.9 million, or $1.19 per share, on $4 billion of revenue.

The company credited smaller-than-expected medical costs, particularly drugs, and strong enrollment growth -- Anthem's enrollment was up 8% for 2003, to 11.9 million. Medical costs went up 9%, the company said, but revenue from premiums went up 10%. For all of 2003, Anthem announced earnings of $774.3 million, or $5.45 per share on revenue of $16.5 billion. That was up from earnings of $549 million, or $4.51 per share, on revenue of $13.3 billion in 2002.

WellPoint, whose name will survive the merger with Anthem, also reported strong revenue and earnings growth. In the fourth quarter of 2003, WellPoint earned $271.3 million, or $1.83 per share, on $5.5 billion in revenue. For the same period in 2002, the Thousand Oaks, Calif.-based firm earned $180 million, or $1.18 per share, on revenue of $4.6 billion.

WellPoint credited its growth on efforts to keep administrative costs down, including providing physicians technology to eliminate paperwork. Also, WellPoint cited the easier-than-expected integration of Cobalt Corp. into its network. WellPoint last year bought Cobalt, which runs the BlueCross BlueShield plan in Wisconsin. WellPoint now has about 15 million members, up from 13.8 million at the beginning of last year.

For the full year in 2003, WellPoint earned $935.2 million, or $6.16 per share, on revenue of $20.4 billion. The numbers in 2002 were $703.1 million earned, or $4.67 per share, on $17.4 billion of revenue.

Anthem and WellPoint, the nation's biggest operators of BlueCross BlueShield-affiliated plans, in October 2003 announced a planned merger valued at $16.4 billion. With 26 million members, the combined companies would form the largest private health care plan in the country.