Report Indicates Ohio HMOs Losing Patients, Money

By MARK WILLIAMS, AP Business Writer

COLUMBUS, Ohio (AP) - After growing strongly through the 1990s, enrollment in Ohio's HMOs started to decline in 1999 as health maintenance organizations lost millions of dollars and started cutting services or raising premiums, according to a report released Friday.

Employers, frustrated with higher costs and concerned about fewer choices, are searching for alternatives, said Allan Baumgarten, a health care analyst who prepared the fifth annual report on the health of HMOs in Ohio.

"They see the double digit increases with no end in sight and they say, 'What are my options?'" Baumgarten said in a telephone interview from Minneapolis.

Enrollment in HMOs nearly doubled from 1.5 million in 1992 to peak at 2.8 million people in 1999. Enrollment has since fallen to less than 2.6 million, or 24 percent of Ohioans, as of July 2001.

The number of senior citizens enrolled in Medicare HMOs, set up as an alternative to traditional Medicare, also has declined, from a peak of 300,000 in 1999 to 250,000 by September, Baumgarten said.

The top four HMOs now have 60 percent of the market, while many smaller plans have withdrawn from Ohio and some hospitals that once operated HMOs decided to get out of the business, he said.

About 25 HMOs are operating in the state, down from 37 in 1998, Baumgarten said. The number of Medicare HMO providers has gone from 19 to just a handful, and many Ohio counties have no Medicare HMO available, he added.

Ohio's HMOs lost $41.2 million in 2000, less than 1 percent of the $4.7 billion in the revenue they took in, according to the report. They also lost $25 million in the first half of 2001, even though premiums increased 11.9 percent in 2000. From 1996 to 2000, Ohio HMOs lost $97 million.

Most of the losses were concentrated at a few HMOs. Aetna U.S. Healthcare, the state's second largest HMO, lost the most, $57 million, from Jan. 1, 2000, to July 1, 2001.

John Charlton, spokesman for the Ohio Department of Insurance, said that the state remains competitive despite the consolidation.

"We probably have more options for consumers than other states do," he said.

Kelly McGivern, president and chief executive of the Ohio Association of Health Plans, blamed expensive government regulations for forcing HMOs to raise premiums along with skyrocketing costs to reimburse hospitals and doctors.

But she said she believes that the industry's finances got stronger in 2001 as HMOs took steps to cut losses.

"Premiums are rising overall no matter what product you have," she said.

She said HMOs traditionally have been the lowest-cost plan for most employers.

"I think HMOs still have a role to play," she said.

(Copyright 2002 by The Associated Press. All Rights Reserved.)