HEALTH INSURERS: 1998 Financial Results Mostly Troubling
Financial results for 1998 continue to roll in for many of the nation's health insurers and managed care organizations, and for the most part the news is quite grim:
- The University of Michigan's M-Care HMO lost $14.1 million and St. Joseph Mercy Health System's Care Choices HMO lost $4.8 million in 1998, joining most of Michigan's 21 HMOs in the red (Wahlberg, Ann Arbor News, 4/1).
- Minnesota's HMOs lost $58 million last year, capping three years of consecutive losses, with executives predicting a 10% - 15% rise in premiums next year (Howatt, Minneapolis Star Tribune, 4/2). Medica had operating losses of $18.8 million last year, HealthPartners' operating loss totalled $17.5 million, Central Minnesota Group Health Plan lost $3.9 million and Blue Cross and Blue Shield of Minnesota's Blue Plus HMO posted operating losses of $3 million plus a $60 million pre-tax charge (Padley, St. Paul Pioneer Press.
- MVP Health Plan of Schenectady, NY, turned a $4 million profit and Capital District Physicians' Health Plan of Albany was up $2.8 million last year, but Kaiser Permanente Northeast lost $89.5 million -- $33.8 million in New York alone -- and Blue Cross Blue Shield of Western New York's Health Now posted a $10 million loss (Hughes, Albany Times Union, 4/2).
- Industry consolidation helped many Chicago-area HMOs turn a profit, with Humana Inc. posting a $5.5 million profit and Rush-Prudential HMO showing a $2 million gain. Aetna Inc. and Blue Cross and Blue Shield of Illinois' HMO, Illinois and Blue Advantage, also landed in the black. United HealthCare of Illinois, however, posted a "staggering" $20.2 million loss, and American Health Care Providers Inc. landed $560,000 in the red (Japsen, Chicago Tribune, 4/2). Independent analyst Allan Baumgarten found that overall, Illinois HMOs "lost an average of 1.6% of revenues in the first half of 1998 (release, 4/1).
- Cigna HealthCare of Georgia posted a $4 million gain and Blue Cross & Blue Shield of Georgia Inc.'s net income soared 37% to $11.4 million, but Aetna U.S. Healthcare of Georgia continued its losing streak with a $6.8 million net loss, Prudential lost $6.6 million and United HealthCare lost $13.8 million -- six times greater than the company's 1997 losses (Robbins, Atlanta Business Chronicle, 3/29 issue).