FOUNDATION HEALTH SYSTEMS: Plans Shift In Strategy
The head of Woodland Hills-based Foundation Health Systems Inc. yesterday "said managed health care companies need to change their business models to produce sustainable profits," and that FHS plans to retool its business strategy accordingly. FHS President Jay Gellert said HMOs "have been operating as the start-up companies they once were, chasing new membership to boost revenue and using capital inefficiently. ... As a result, many HMOs are now facing lower earnings or losses." Gellert said the industry "must focus on profit, consolidation and more efficient use of capital." He also said FHS plans to "focus on major urban areas, where it has had the most success." Gellert said the company may sell its vision, dental, and workers' compensation units, but it "will probably retain its pharmacy and mental-health operations" ( Bloomberg News/Los Angeles Times, 2/12).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.