HealthCare USA Reports Loss for Quarter

Blaming expansion costs and unexpected increases in medical costs, HealthCare USA reported a loss of $1.7 million for the quarter ended Sept. 30, compared with a profit of $565,000 for the same quarter last year.

Revenues, however, increased to nearly $48.3 million for the quarter, more than three times the $14.9 million in sales for the same quarter last year.

The Santa Ana-based company, which changed its name last April from Greatwest Hospitals Inc., had said previously that it was canceling plans to add more health maintenance organizations because of the “disappointing” quarter.

Chairman Harlan W. Loomas said that it had taken longer than first expected “to digest” changes that included the sale of its money-losing hospital operation, the creation of two new HMOs and the acquisition of Independence Health Plan, a Southeast Michigan HMO.

The increase in revenues for the quarter was due primarily to the acquisition of IHP, which had revenues of nearly $26.4 million. General Medical Centers in Southern California contributed nearly $6.1 million in revenues. IHP membership increased to 130,000, more than a 30% boost over its membership a year ago, and General Med membership reached 100,000, a 27% increase from a year ago, he said.

HealthCare had purchased 51% of IHP last year and acquired the remaining shares last May. The total acquisition cost was about $120 million.

The company also has changed its fiscal year-end from Sept. 30 to Dec. 31. The next annual report will be for the year ended Dec. 31, 1985.