Managed Care

 

Big Plans Turn Profits, Smaller Ones Still Hurt

MANAGED CARE June 2000. © MediMedia USA
News and Commentary

Big Plans Turn Profits, Smaller Ones Still Hurt

MANAGED CARE June 2000. ©2000 MediMedia USA

It's hard to get a handle on whether the HMO industry is headed for brighter days — or still in the doldrums. Weiss Ratings reports that 47 percent of HMOs lost money in the third quarter of last year.

Aggregate HMO profits were $69 million, down from $274 million during the first quarter; losses started to hit all but the largest HMOs (those with more than a half-million members). Previously, most serious losses had been restricted to plans with fewer than 100,000 members.

An early glance at some first-quarter 2000 results is a bit more promising. Foundation Health says operating profits rose 22 percent from the same period last year, Cigna reported 16-percent profit growth, and Kaiser Permanente posted first-quarter net income of $142 million — up 233 percent from the same quarter of 1999.

For some, the news remains bad. Humana reported a 36-percent decline in operating profits, a bigger-than-expected drop. One of the few remaining staff-model HMOs in the country, Wisconsin-based Family Health Plan Cooperative, disappeared when it was sold to United Wisconsin Services. Family lost $21 million over the last two years.

The plans seeing higher profits say their improved bottom lines are largely the result of premium hikes; most seem to be basing their pricing now on profitability, rather than market share. The poorer results for many smaller HMOs, coupled with a number of recent HMO failures, prompted Weiss Chairman Martin Weiss to comment that a broader shakeout may be in the making.

Meetings

4th Partnering With ACOs Summit Los Angeles, CA October 27–28, 2014
PCMH & Shared Savings ACO Leadership Summit Nashville, TN November 3–4, 2014
2014 Annual HEDIS® and Star Ratings Symposium Nashville, TN November 3–4, 2014
Medicare Risk Adjustment, Revenue Management, & Star Ratings Fort Lauderdale, FL November 12–14, 2014
World Orphan Drug Congress Europe 2014 Brussels, Belgium November 12–14, 2014
Healthcare Chief Medical Officer Forum Alexandria, VA November 13–14, 2014
Home Care Leadership Summit Atlanta, GA November 17–18, 2014
HealthIMPACT Southeast Tampa, FL January 23, 2015