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Marginally frightening

As of Jan. 1, 1998, fewer than one third of HMOs' operating margins were in the black. Despite having to face heavier competition, the more profitable HMOs tend to be in metropolitan markets, where the average operating margin is better than twice that of HMOs in small markets. Administrative expenses are similar regardless of market size.

SOURCE: REGIONAL MARKET ANALYSIS 8.2, INTERSTUDY PUBLICATIONS, MINNEAPOLIS, 1998

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