CALIFORNIA HMOs: RETURN TO PATIENT CARE EXAMINED

      A new survey of managed care companies in California "shows
 a wide difference" in the companies spend on patients, SAN
 FRANCISCO CHRONICLE reports.  According to the California Medical
 Association (CMA) survey, the 15 largest California HMOs spent,
 on average, "82.6 cents of each health care dollar on medical
 care during the last fiscal year."  Kaiser Foundation Health
 Plan, the largest HMO with almost five million enrollees, topped
 the list, "plowing back 96.5% of revenues into medical care." 
 Kaiser was followed by Prudential Health Care Plan of California,
 with 87.4% of revenues going back to care and CIGNA HealthCare of
 California, with 86% being put back.  "At the bottom of the list"
 of the 35 HMOs surveyed, Chinese Community Health Plan,
 "reportedly put just 72.3% of revenues" back into medical care. 
 CaliforniaCare Health Plans, owned by WellPoint Health Networks
 "and marketed under Blue Cross," returned 74.3% of revenues in
 health care, while Foundation Health gave back 77.4%.  
      PROMISES, PROMISES:  "The promise of managed care was that
 it would make the health care system more efficient by removing
 administrative waste and inappropriate care without sacrificing
 quality," said Dr. Jack Lewin, CEO of the medical association. 
 He continued, "But in reality, in the for-profit era, we see some
 contradictions.  Some administrative costs seem to be rising." 
 CHRONICLE reports, however, that the largest HMOs decreased their
 overhead costs slightly over the past three years.  The "top five
 HMOs have raised the amount of premiums going to health care to
 83.7% from 83.5%."  
      COUNTERPOINT:  Cynthia Coulter, a WellPoint spokesperson,
 said, "The survey is flawed.  It ignores the fact that more than
 half our California enrollees are served by our preferred
 provider organization, not HMOs, and that we serve some small
 groups and individuals on the high-risk end."  CHRONICLE reports
 that both "factors tend to drive up administrative costs."  CMA's
 Lewin conceded that the survey is "not perfect," because "it does
 not consider some factors that affect operating costs, such as
 whether managed care groups serve lots of small businesses, have
 merged or entered new lines of business."  However, Lewin said
 that the survey is one of the few ways "for businesses and
 consumers to evaluate how their health care premiums are being
 spent" (Sinton, 2/22).