HMO'S EXPENSES DETAILED : ADMINISTRATIVE COSTS VARY FROM 3% TO 25%.Byline: Deborah Adamson Daily News Staff Writer
California HMOs allocated as much as a quarter of their revenues to pay for administrative costs administrative costs,
n.pl the overhead expenses incurred in the operation of a dental benefits program, excluding costs of dental services provided. that include multimillion-dollar executive compensation packages and advertising expenses, according to according to
1. As stated or indicated by; on the authority of: according to historians.
2. In keeping with: according to instructions.
3. a report released Friday by the California Medical Association.
In a survey of 35 HMOs, the report by the San Francisco-based doctors group said that administrative costs ranged from a high around 25 percent of revenues to a low around 3 percent among health plans with at least 20,000 enrollees.
Kaiser Foundation The mission of the Kaiser Foundation is to assist individuals and communities in preventing and reducing the harm associated with problem substance use and addictive behaviours. External links
That bites into the percentage spent on medical treatment.
Medical spending ran the gamut from a low of 74.3 percent of revenues at CaliforniaCare, the HMO HMO health maintenance organization.
A corporation that is financed by insurance premiums and has member physicians and professional staff who provide curative and preventive medicine within certain financial, of Woodland Hills-based Wellpoint Health Networks, to a high of 96.5 percent at Oakland-based Kaiser.
``When consumers and businesses are choosing their health plan and they see plans with high overhead or administrative costs, they should ask why,'' said Dr. Jack Lewin, chief executive of the medical association.
``They should find out if they are getting full value for their premiums,'' he said
The top 10 in spending the largest portion on medical care were Kaiser, Monarch Plan, Priority Health Services health services Managed care The benefits covered under a health contract , Contra Costa Contra Costa can refer to:
The bottom 10 were CaliforniaCare, Community Health Plan, Community Health Group, Foundation Health, MetLife, Molina Medical Centers, Maxicare, Lifeguard, Health Net and Aetna. Seven of them are for-profit firms.
The report said that Health Net, the HMO of Woodland Hills-based Health Systems International, last year paid almost $2 million to its president, Malik Hasan. Wellpoint's CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , Leonard Schaeffer, received salary and other compensation of $1.2 million in the company's last fiscal year.
For-profit companies spend less on medical care on the average than their nonprofit counterparts - 83 percent vs. 86 percent.
Administrative costs also were lower at nonprofits, at 12 percent of revenue on the average, compared with 14 percent at for-profits.
But Alan Tomiyama, spokesman for the California Association of HMOs in San Francisco, took issue with the report's validity.
He said there is no direct correlation between how much one spends on medical care and the quality of care. Furthermore, the report compares ``apples to oranges'' since it does not take into account individual differences among the plans, he said.
``It overlooks a significant number of important factors like the size of the plan, plan type and composition of benefit packages,'' Tomiyama said.
A new survey shows the percentage of revenue spent on medical care by the 10 largest health maintenance organizations in California.
HMOs Percent spent
on medical care
Health Net 80.1
FHP fhp or f.hp.
friction horsepower Inc. 83.8
CIGNA CIGNA CG (Connecticut General Life Insurance Company) INA (Insurance Company of North America) 86.0
Foundation Health 77.4
Blue Shield Blue Shield A US not-for-profit health care insurer that is a reimbursement intermediary for physicians. Cf Blue Cross. HMO 82.4
SOURCE: California Medical Association
Box: HMO SPENDING (See Text)