STILL HEALTHY
Despite Some Churning, HMOs Grew Memberships 6% in OC in 2001
By VITA REED
Orange County’s largest health maintenance organizations added members in 2001, with the nine plans on the Business Journal’s list reporting a 6% membership hike on the year.
Local HMOs, after a period of double-digit growth, have grown in the single digits the past three years. Orange County, however, now is considered a mature managed-care market,the nine biggest plans reported total enrollment of 1.39 million, out of a total population of around 2.8 million.
The last two years or so had been eventful ones for local HMOs, particularly when it came to battling with doctors and hospitals over contract terms. In particular, PacifiCare of California and Health Net of California were involved in some rather public squabbles with St. Joseph Health System, the Orange-based operator of three local hospitals.
This year’s list contains nine plans, in contrast with the 10 on previous annual lists. Maxicare, a Los Angeles-based company, dropped off the list because it no longer offers an HMO or a preferred-provider organization in Orange County.
Kaiser Permanente continued its reign as the list’s No. 1 HMO here. Kaiser reported a membership increase of 7%, slightly more than the list average. In terms of numbers, Kaiser reported 335,200 members as of December, compared with 314,100 a year earlier.
Cypress-based PacifiCare of California, a unit of PacifiCare Health Systems Inc. of Santa Ana, lost its rank as the No. 2 plan in this year’s list. PacifiCare of California, after contract wrangles with providers, reported a 25% drop in membership to 200,000 OC enrollees.
PacifiCare’s Orange County HMO membership decline is related to two factors, said spokeswoman Cheryl Randolph. One, she said, was that some of its commercial and Secure Horizons Medicare HMO en-rollees chose to switch plans to stay with their St. Joseph Health System doctors.
PacifiCare and St. Joseph ended their longtime business relationship last year. PacifiCare contended the breakup was a result of “significant cost increases” demanded by St. Joseph, while St. Joseph argued that it was looking for a more equitable arrangement for absorbing increases in costs of care.
Secondly, Randolph said that some of PacifiCare’s Orange County Secure Horizons members switched back to traditional Medicare because of benefit changes. PacifiCare and other HMOs have argued that reimbursement from the federal government is inadequate for providing healthcare services to senior citizens.
PacifiCare’s slide moved Blue Cross of California up one notch on the list. Blue Cross, a unit of WellPoint Health Networks Inc. of Thousand Oaks, had a 16% membership gain to 234,299 local enrollees.
No. 4 Health Net of California was the plan that had the largest enrollment gain, with a 91% membership surge to 175,000 Orange County members. Last year, Health Net came in at No. 7 in terms of local enrollment.
“In Orange County, there were network changes among the health plans,” said Brad Kieffer, a spokesman for Woodland Hills-based Health Net. Those changes, according to Kieffer, resulted in enrollment growth for Health Net across all lines of business, including its commercial HMO.
Additionally, Kieffer said, Health Net’s OC membership growth was consistent with what officials saw throughout California.
Last year, Kieffer said it appeared that new members that Health Net had gained during an open-enrollment period in late 2000 would “more than make up for the slight dip in enrollment in Orange County” and that those members would go into 2001 figures.
Health Net’s surge caused some reordering among other list plans. Blue Shield of California, last year’s No. 4 plan, went to No. 5 on this year’s list. Blue Shield’s OC membership number remained flat at 132,317, compared with 132,199 members a year ago.
No. 6 Cigna HealthCare of California, fell from No. 5 last year. Cigna reported 116,182 local members, down 4% from last year.
No. 7 Aetna U.S. Healthcare also is down a notch, although it grew to 111,535 local members, up 2% from last year.
Universal Care, a smaller HMO based in Signal Hill, saw its Orange County membership grow 11% to 65,967 members from last year. Universal Care is No. 8 on this year’s list. No. 9 SCAN, a Long Beach-based HMO that mainly caters to Medicare beneficiaries, saw its enrollment grow 12% to 16,365.
Preferred-Provider Organizations
Several companies listed in the Business Journal’s directory of preferred-provider organizations did not break out specific enrollment figures for Orange County. Those PPOs that reported numbers had a total enrollment of 846,691, up 9% from 779,555 a year ago.
Health analysts have frequently said that PPOs, which usually allow their members wider latitude in terms of doctor selection, were gaining on HMOs in popularity during better economic times. The economy has slowed, however, which could shift momentum back to HMO plans.
Blue Cross of California continued as the largest reporting PPO, with 274,720 Orange County members, up 8% from 255,124 a year earlier. Private Healthcare Systems reported having 179,838 enrollees, up 9% from the previous year’s 165,323 its numbers, however, include Los Angeles County markets.
San Diego-based CCN reported having 176,087 local members, a 5% gain from 2000.
Health Net of California reported a 189% membership increase, to 14,000 from 4,841 members reported last year. Kieffer attributed the gains in Health Net’s PPO to a mix of network changes and benefit changes intended to make the product more attractive to employers and healthcare consumers.
Other plans that report Orange County numbers and reported enrollment gains were Aetna U.S. Healthcare, Interplan Corp., a Stockton-based PPO and One Health Plan of California.
Blue Shield of California was the only PPO that reported Orange County enrollees to show an enrollment drop. Blue Shield reported 86,138 local members, down 10% from the 95,821 reported last year.
Three PPOs dropped off the directory Maxicare, which no longer offers the product in Orange County, CompPartners Inc., an Irvine company that specializes in worker’s compensation, and the Orange County Foundation for Medical Care, an affiliate of the Orange County Medical Association.
Dental Plans Filling
Enrollment growth at Orange County’s medical HMO and PPO plans has remained in the single digits during the past few years. But that wasn’t the case this year at their dental counterparts.
The nine companies on the Business Journal’s annual HMO/PPO list that reported numbers that could be compared to last year’s saw their enrollments grow 17% to 1,151,149 members. By contrast, the 10 plans on last year’s list reported a 4% enrollment gain.
No. 1 PacifiCare Dental and Vision, the Santa Ana-based subsidiary of PacifiCare Health Systems Inc., reported 316,062 dental plan members in Orange County, compared with 125,690 in dental plan enrollment last year. PacifiCare Dental and Vision’s apparently huge gain came from a change in how it reported data, said spokeswoman Sandy Klein. This year’s numbers, Klein said, reflect both commercial and Senior Horizons Medicare dental enrollees, rather than just the commercial plan membership reported last year. The company could not provide a combined commercial and Secure Horizons number for last year by presstime.
With PacifiCare’s inclusion of its senior plan members, Delta Dental Plan of California fell to No. 2 on the list although it saw its Orange County dental enrollment grow 15%. Delta reported 261,723 dental enrollees, compared with 228,020 in the year-ago period.
Aetna U.S. Healthcare ranked No. 3 on the list, with Orange County dental plan enrollment of 163,000. Last year’s number of 103,000, a Business Journal estimate, was not disputed by the company in its reporting for the list this year.
United Concordia, a unit of Highmark Inc. of Harrisburg, Pa., which was No. 3 on last year’s list, fell to No. 5 on this year’s. United Concordia’s total local dental HMO/PPO enrollment ticked up 3% to 132,905. United Concordia officials didn’t respond to a request for comment by this article’s deadline.
The No. 6 plan, SafeGuard Dental Health Plans of Aliso Viejo, reported a 2% enrollment jump. SafeGuard reported 120,000 OC enrollees, compared to 118,000 last year.
The bottom four plans on the list posted double digit enrollment gains. No. 7 Blue Cross of California Dental HMO & PPO, reported a gain of 19% to 110,112 enrollees. No. 8 Ameritas Managed Dental Plan, which reported an 11% hike to 100,000 OC enrollees from 90,000. No. 9 SmileSave Dental Plans grew its OC membership 24% on the year, to 57,175. And Golden West Dental and Vision came in at No. 10 with an OC enrollment of 50,892, up 20% from 42,343.
Denticare of California, an Irvine-based company, dropped off this year’s list. Last year, Denticare ranked No. 10 with 35,000 members.
,Vita Reed