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By MARK GUYDISH; Times Leader Staff Writer
Thursday, November 12, 1998 Page: 5A
Heavily used, “loosely managed” and generally not profitable. Not exactly
descriptions of a business you’d want to get into.
A study comparing health maintenance organizations in Pennsylvania, New
York, New Jersey and Connecticut shows that in 1997, HMOs in four states saw
enrollment climb while losing money. By comparison, in 1996, of the four
states only Pennsylvania HMOs reported losses.
The study was released by the Harrisburg-based Hospital and Healthsystem
Association of Pennsylvania in conjunction with similar organizations in the
other states. Some of the findings:
Pennsylvania HMOs had the highest average total premiums “per member per
month” at $166. Connecticut had the lowest at $136.
Locally, the two largest HMOs were below the state average, with Blue Cross
First Priority Health of Northeastern Pennsylvania’s average premium at $146
per member per month in 1997, and the Penn State Geisinger Health Plan premium
at $150.
The state had the highest average premium for government-payer programs
like Medicare and Medicaid, but had the lowest average premium from
commercial, non-government payers.
Pennsylvania HMOs also spent the highest average amount on medical costs-
in contrast to administrative costs- at $150 per member per month. Connecticut
had the lowest average medical expenditures at $118.
First Priority Health spent $140 per member per month on medical costs and
Penn State Geisinger spent $135.
HMO members in Pennsylvania use hospital inpatient services more often- by
far- than those in the other three states. Pennsylvania’s average use of
“hospital inpatient days” was 655 days per 1,000. New Jersey was second
highest at 463 per 1,000.
Industry standards define commercial insurers with 317 days or more per
1,000 as “loosely managed,” while 133 days per 1,000 is considered “well
managed.” The study notes Medicare patients use inpatient services at least
five times as often as commercial enrollees.
Though HMOs in all four states lost money in 1997, Pennsylvania fared
better than the others, losing $2 per member per month, compared to $3 in New
Jersey, $4 in Connecticut and $6 in New York.
First Priority had a net loss of $9.73 per member per month in 1997. Penn
State Geisinger, which is a not-f