Greatwest Hospitals

Greatwest Hospitals Inc. of Santa Ana Thursday attributed a 56% drop in net income for the first quarter ended Dec. 31 to expenses related to acquisition of a Michigan health maintenance organization company in September.

However, membership in the company’s two health plans increased significantly and the consolidated revenues are nearly three times greater than the year-ago quarter. Greatwest is in the process of selling its hospital operations, including seven in Southern California, to focus on providing nationwide, prepaid health plans.

Greatwest posted first quarter net income of $245,000, including the results of discontinued operations. This compared to net income of $560,000 for the same quarter last year. Revenues increased from $10.9 million to $37.5 million.

General Medical Centers, Greatwest’s health plan subsidiary, posted pretax profits of $2.1 million, an increase of 57% over the first quarter of last year. General Medical’s revenues increased 52% to $16.7 million.

Greatwest’s newly acquired, Independence Health Plan Inc. subsidiary, based in Southfield, Mich., reported a 40% boost in earnings to $2.6 million. Revenues for the first quarter increased 89% to $20.6 million.

“The combined membership of GMC and IHP exceeded 191,000 in December,� said Harlan Loomas, chairman and chief executive officer of Greatwest, in a statement. Loomas said GMC’s membership increased 36% over December 1983 figures, while IHP’s membership grew 72%.

Earnings from continuing operations remained virtually unchanged at $401,000 for the first quarter of this year, compared to $408,000 for the first quarter of fiscal 1983.

Greatwest previously announced it is selling its hospital operations to American Healthcare Management Inc. of Dallas for about $95 million. The sale is expected to close in April.