HMO PULLOUTS: Group Health Coop. Ends Rural Coverage
Group Health Cooperative, Washington State's largest HMO and one of the nation's first fully integrated HMOs, has announced it will terminate the coverage of 21,000 enrollees in 11 rural counties in the state, as well as three in Northern Idaho, as of Jan. 1. Vice President Scott Armstrong blamed heavy losses in rural areas for the pull-out. The Seattle Times reports that "[o]verall, the HMO lost $19.7 million in 1998." Washington Rep. Linda Parlette (R), co-chair of the House Health Care Committee, called the decision "sad," adding, "In some of these counties, even for group plans, there's not enough options for people." Washington Insurance Commissioner Deborah Senn said, "There is a nationwide problem of delivery of health-care services in the rural community. Managed-care plans cannot fill their networks. In other words, they can't get enough doctors and providers (and members) in the networks to make a go of it" (Beason, 5/27).
Cities Not Immune to Trend...
In "probably the first time a health plan has ceased operations in Houston's competitive HMO market without being part of an acquisition," UniCare will drop its Houston-area plan "as part of a strategy to exit the HMO business in Texas altogether." While UniCare was one of only five area HMOs to finish 1998 in the black, the organization is seeking to move to a PPO-only system. Two-thirds of UniCare's 3,500 HMO members have already switched to the PPO, and the rest have until June 15 to do so, or choose another insurer. The PPO currently has 135,000 members. Janice Fagen, UniCare's regional vice president of network development for Texas, said, "The individuals won't feel any disruption at all as they move into the PPO plan. I will venture to say we'll be the only carrier-based PPO not offering an HMO plan. We were really only offering the HMO as an additional option" (Darwin, Houston Business Journal, 5/24 issue).