Printer Friendly

HMOs: number shrinks but enrollment grows.

HMOs: Number shrinks but enrollment grows While the number of health maintenance organizations (HMOs) in the U.S. has dropped since 1987, their membership continues to increase.

This was one of the trends highlighted in the Marion Managed Care Digest/HMO Edition 1990, just published by Marion Merrell Dow Inc., the Kansas City--based health care firm.

At the end of 1989, 623 HMOs were operating, down 5.5 per cent from 1988. Enrollment, however, was up 3.9 per cent to 35,031,000 members, compared with 1988, when 659 HMOs had 33.7 million members (see Table I).

The number of HMOs crested at 707 in 1987. Thus the 1989 figures represent still further consolidation of the industry, as HMOs are shut down, become insolvent, or are acquired by other HMOs. The number is expected to continue shrinking each year through 1994 when forecasts indicate there will be 568 plans surviving.

Projections indicate that HMO enrollment will continue to grow to an estimated 36.9 million this year, hitting 53.2 million by the end of 1994. Open-ended HMOs, which allow participants to decide at the time of needing care whether they want to receive care from an HMO provider or go to an outside hospital or physician, have not grown as quickly as experts thought they would. Nevertheless, the popularity of these plans is expected to generate increased enrollment in HMO plans.

Multistate HMO chains are becoming increasingly dominant. The 1989 data show 47 multistate HMO chains, up from 30 in 1988. Kaiser Foundation Health Plan, by far the largest HMO in the nation, grew 9 per cent in 1989, repeating its performance of 1988. HMO chains now enroll nearly three-fourths (73.8 per cent) of all HMO participants in the U.S.

Besides Kaiser, large HMO chains that experienced growth in 1989 included Blue Cross/Blue Shield, the HMO Group, United HealthCare, Humana, Foundation Health Corp., and Aetna. Yet others shrank, such as Maxicare, Healthcare Corporation of America, and PruCare.

HMO penetration in 1989 inched up to 13.9 per cent of the population from 13.6 per cent in 1988. Penetration topped 15 per cent in 14 states, up from 12 states in 1988. In the four states of the Pacific region (California, Oregon, Washington, and Hawaii), where HMOs are more popular than anywhere else, penetration hit 28 per cent in 1989.

Of the four major HMO model types, IPAs, which use independent physicians practicing alone or in groups to care for enrollees, have become more and more dominant. IPAs accounted for 62 per cent of all plans and 44 per cent of all members in 1989. They also comprised 73 per cent of all plans under five years old, and nearly half of all HMOs with 100,000 or more members were IPAs.

The major challenge facing the managed care industry, of course, is to control costs and utilization, in large part by keeping people healthy and delivering the right treatment to sick people in the right setting at the right time. HMOs successfully held hospital utilization to 372.8 days per 1,000 non-Medicare members in 1989, up only 2 per cent from 1988. But the number of physician encounters for non-Medicare enrollees dropped 11 per cent to 3.3 per member in 1989 from 3.7 the previous year.

And HMOs managed to push the number of hospital days for Medicare members 1 per cent lower than in 1988. The 1989 figure was 1,924.4 days per 1,000 Medicare members.

The evolving growth of HMOs as a significant segment of the health care delivery system certainly merits our continued attention.
COPYRIGHT 1990 Nelson Publishing
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1990 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Title Annotation:health maintenance organizations
Author:Fitzgibbon, Robert J.
Publication:Medical Laboratory Observer
Article Type:editorial
Date:Oct 1, 1990
Previous Article:Vendor-proof your LIS contract.
Next Article:Breaking with tradition to relieve the shortage.

Related Articles
HMO Partners largest and growing.
State HMOs show growth; Health Advantage at top.
Step right up: In the competition among health plans for popularity and enrollment growth, PPOs are attracting bigger crowds. (Life/Health).
Condition critical: urban HMOs are struggling to stay afloat. (Business News).
State HMOs report operating losses; Fallon, HMO Blue, Harvard Pilgrim rely on investment income.

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters