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MANAGED CARE SAVINGS VARY SIGNIFICANTLY, SURVEY FINDS

 MANAGED CARE SAVINGS VARY SIGNIFICANTLY, SURVEY FINDS
 NEW YORK, April 7 /PRNewswire/ -- Managed care health plans are


providing many employers with large cost savings, but some employers around the nation are receiving little, if any, savings, a new survey reports.
 The nationwide survey of 2,409 employers also reports that while nearly three-fourths of employers offered managed care options in 1991, the majority of employees participated in traditional indemnity plans.
 The survey was conducted by A. Foster Higgins & Co., Inc., the international employees benefits consulting firm.
 Nationwide, employers spent $3,046 per employee in 1991 for Health Maintenance Organization (HMO) coverage -- 14.7 percent lower than the average $3,573 per employee cost for traditional indemnity plan coverage. The average cost for Preferred Provider Organizations (PPOs) -- $3,355 per employee -- was 6.1 percent below indemnity plan costs while the per-employee cost for Point-of-Service (POS) plans ($3,291) was 7.9 percent lower.
 "Managed care plans can be an attractive cost-savings vehicle," said John Erb, a Foster Higgins principal and one of the study's authors. "Purchasing cost-effective health services is a function of where an employer is located and the ability of the managed care providers who serve that area to control costs."
 Nearly three-fourths of employers offered at least one type of managed care plan to employees in 1991, but more than half (55 percent) of all employees who receive health coverage enrolled in traditional indemnity plans. Less than one-fourth of employees (23 percent) were covered in HMOs, while 17 percent were in PPOs and 5 percent were in POS plans.
 The survey reported the greatest variation in cost savings was in the Pacific region, where employers has the lowest HMO cost per employee, but the highest PPO cost. The average HMO cost among Pacific employers (2,894) was 16.6 percent lower than the average indemnity plan cost. Conversely, the average PPO cost ($3,991) was 15.0 percent higher than the traditional indemnity plan cost.
 In the mid-Atlantic region, average HMO and PPO costs were significantly lower than the traditional plans -- 23.6 percent and 17.1 percent, respectively. However, the survey noted two regions -- Mountain and North Central -- where managed care programs offered little savings (less than 6
percent). The one exception among North Central employers is HMO costs, which averaged 10.2 percent below traditional plans.
 The survey also noted that the cost of HMO and PPO plans increased 13.5 percent and 13.7 percent, respectively, in 1991, slightly more than the 13.0 percent increase in traditional indemnity plans, but still more than four times the rate of inflation.
 /delval/
 -0- 4/7/92
 /CONTACT: Ed Emerman of A. Foster Higgins, 609-520-2766/ CO: A. Foster Higgins & Co., Inc. ST: New Jersey IN: INS SU:


CC-JS -- PHFNS2 -- 5681 04/07/92 08:20 EDT
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Publication:PR Newswire
Date:Apr 7, 1992
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