WellPoint profits fall 25 percent during first quarter

Yesterday it was UnitedHealth Group in the hot seat, and today it's WellPoint. The health insurance giant said that its first-quarter profits fell 25 percent compared with the same quarter last year. The company reported a drop in net income to $588 million for Q1 of this year, compared with $783 million for the first quarter of 2007, driven primarily by rising medical costs. This news comes despite the fact that revenues climbed 3 percent to $15.6 billion from $15.1 billion, and enrollment went up.

With a growing number of health plans reporting that they're losing ground financially, things are beginning to look bad for the sector as a whole. Generally speaking, that's not good for providers; after all, a health plan's first instinct is to clamp down on reimbursement when things look bad. The next few quarters could be scary for providers that don't have serious negotiating muscle.

To learn more about WellPoint's results:
- read this Business Courier of Cincinnati article

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