New England HMOs Still Own 48% of Health InsuranceBusiness.

Business/Health & Medical Writers

KENNEBUNK, Maine--(BW HealthWire)--July 14, 2000

Consolidation of New England's managed care industry accelerated in 1999. Insurance regulators adopted and enforced more stringent financial solvency requirements and several HMOs liquidated

in the region. Kaiser Permanente announced plans early in the year to sell and divest its money-losing Northeast operations. In September 1999, Tufts Health Plan of New England began to pull out of Maine, Rhode Island and New Hampshire and the New Hampshire insurance commissioner subsequently ordered the liquidation of this HMO. The year ended with the closing of Harvard Pilgrim Health Care of New England in Rhode Island.

Anthem Health Plans, who had acquired Blue Cross Blue Shield of Connecticut a few years ago, gained considerable New England market share with the acquisitions of Blue Cross Blue Shield of New Hampshire and Blue Cross Blue Shield of Maine. Aetna U.S. Healthcare continued to integrate HMO business from its recent Prudential and NYLCare acquisitions.

Other surviving HMOs in the region increased premiums in 1999 to offset higher drug prices and lower government reimbursements and many actually improved their bottom lines. Nonetheless, the number of operational HMOs in the region dropped from 54 in 1998 to 48 as of December 1999 and this moderate, downward trend is likely to continue.

Despite escalating health care costs and mounting political pressures, HMOs have maintained a significant presence in New England. In 1999, HMO plans owned 48% of all health insurance business in the region and collectively they earned $12.7 billion in premium revenue.

Quick Facts

-- New England HMOs enrolled 6.1 million members as of December 1999, a two percent decline in enrollment compared to 1998.

-- Market penetration was highest in Connecticut; 56% of those insured were enrolled in an HMO. Market penetration was lowest in Vermont where only 22% were enrolled in an HMO.

-- Approximately 57% of New England's commercial health care coverage was provided by HMOs in 1999.

-- An estimated 24% of the region's Medicare enrollees were covered by an HMO plan.

-- Medicaid managed care HMOs enrolled 30% of the region's Medicaid recipients.

The New England HMO Performance Analysis, published by Mark Farrah Associates of Kennebunk, Maine, presents an intuitive analysis of the region's HMO business by market segment. The report offers insightful information about enrollment trends, financial performance and health care utilization in the commercial, Medicare and Medicaid market segments. The New England HMO Performance Data report, a companion product in the New England HMO Monitor series, presents detailed data, performance ratios and comparative measures for HMOs and managed care organizations in the region.

Mark Farrah Associates is the leading source of New England health care business information. We recently expanded our analysis of New England HMOs and will soon release a timely new series of state-focused health care market assessments.