Although WellPoint posted an 80 percent drop in fourth-quarter net income compared to a year ago, when it had a big gain from a subsidiary sale, a decline in healthcare use helped the insurer top analyst expectations, reports NPR.
Net income for WellPoint totaled $548.8 million for the last three months of 2010, compared with $2.74 billion in 2009; yearly net income was $2.89 billion in 2010, compared with $4.75 billion in 2009, according to the Hartford Courant. After adjusting for the sale of NextRx pharmacy benefits management, as well as investments, charges and other items, net income was $524.7 million for the fourth quarter, down 2.1 percent from $536 million reported for the last quarter of 2009.
WellPoint's medical-loss ratio was 84.5 cents spent on members' medical expenses for every dollar earned in premium during the fourth quarter, notes the Courant.
Meanwhile, WellPoint executives said they have created a new plan to better position the company to thrive long-term. That means exiting some areas that have become a "distraction" and moving into new markets that are "nothing like what we do today," CFO Wayne DeVeydt told the Wall Street Journal.
He said the emerging strategy involves two separate pushes. The insurer will identify areas for growth in its traditional benefits businesses, hoping to accelerate investment in some areas, maintain its position in others and consider whether to jettison still more. WellPoint also might expand into areas where it doesn't currently operate, including working with healthy patients and reaching consumers directly. The company is likely to step up acquisitions to get there, notes the WSJ.
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