OC Plans Continued to Pick up Members
in 2000; Kaiser Still No. 1
Orange County’s largest health maintenance organizations continued to grow enrollments in 2000, with the 10 plans on the Business Journal’s list reporting a 7% membership hike as of December, compared with a year ago.
It was the second year in a row that HMOs reported single-digit growth in OC, compared with previous years of double-digit growth. However, the local market is pretty thoroughly penetrated, with the 10 largest HMOs reporting an Orange County enrollment total of 1.36 million, out of a total population of about 2.7 million.
HMOs have continued to grow despite skepticism from Wall Street, ongoing attempts to increase regulation by state and federal lawmakers and allegations of care delays or denials from some consumer groups. Certain analysts believe that is because HMOs have been able, for the most part, to offer benefits at a lower cost to employers than preferred-provider organizations and traditional healthcare insurance plans.
There are some changes on this year’s list. For instance, UnitedHealthCare dropped off this year after Blue Shield of California purchased a subsidiary of United. United HealthCare was replaced by SCAN, a Long Beach-based HMO that mainly covers Medicare beneficiaries.
Eight of the 10 plans on this year’s list reported membership gains. Kaiser Permanente, the No. 1 plan, reported an increase of 2%, below the list average. In raw numbers, Kaiser reported 314,100 enrollees.
No. 2 PacifiCare of California posted a 3% enrollment gain. PacifiCare reported having 300,000 members this year, compared with 291,000 last year. On last year’s list, PacifiCare’s membership was listed at 236,855 members, but the Cypress-based managed care organization revised its year-ago figure to include Secure Horizons Medicare members.
No. 3 Blue Cross of California reported a 19% growth in its HMO enrollment, to 202,056 Orange County members this year. WellPoint Health Networks Inc., Woodland Hills, owns Blue Cross.
Blue Shield of California jumped two slots to No. 4 on this year’s list, with 132,199 OC enrollees, 26% more than last year.
Cigna HealthCare of California, this year’s No. 5 plan, reported 120,791 local members, a 1% decline from last year, when it ranked No. 4. Cigna announced last summer that it would cease selling its Medicare HMO product in Orange County, saying it was unable to achieve its membership goals.
Aetna U.S. Healthcare, No. 6 on the list, reported a 5% increase in enrollment, going to 109,593 members.
No. 7 Health Net posted a 6% drop in Orange County enrollment from 97,642 to 91,732.
“The best I can describe it is that our performance in 2000 really can be broken down into two phases,” said Brad Kieffer, a spokesman for the Woodland Hills-based company.
“In the beginning part, the first half of 2000, our competitors were being very aggressive in their pricing and we would not underprice our business,” Kieffer said. “As a result, we saw a slight dip in our membership numbers.”
Health Net turned it around in the second half, according to Kieffer. “We saw sales increase as our competitors’ pricing was not nearly as aggressive as it was before. So we acquired new business and we were very successful at open enrollment.”
Kieffer didn’t have official numbers, but he said it appeared that new Health Net members gained during open enrollment “more than make up for the slight dip in enrollment in Orange County.” Those members will go into 2001 figures, he added.
Universal Care, the No. 8 HMO, saw its Orange County membership rise 22% to 59,611 from last year’s 49,019. No. 9 Maxicare saw its OC clientele get bigger by 11%, going to 19,944 enrollees from 17,919 on last year’s list. SCAN, this year’s newcomer, reported 14,553 Orange County members, up 5% from 13,925 last year.
PPOs
As has been the custom for some time, several companies listed in the preferred-provider organization directory didn’t report Orange County-specific enrollment figures. Those that reported numbers had a total local enrollment of 744,930, a 6% increase from the previous directory’s 699,896.
Blue Cross of California was the largest reporting PPO, with 255,124 Orange County enrollees, up 2% from 249,863 in the previous year. San Diego-based CCN, a business unit of HCA-The Healthcare Co., reported having 167,702 local members, up 5% from the 159,717 reported last year.
CompPartners Inc., an Irvine company that specializes in workers’ compensation, reported a 339% membership gain to 65,000 members on this year’s directory, compared to 14,800 on last year’s directory.
Overall, eight of 10 PPOs that reported enroll ment figures over a two-year period said they gained membership. Besides CCN and CompPartners, gainers included Aetna U.S. Healthcare, Blue Cross of California, Blue Shield of California, Health Net, Interplan Corp. and the Orange County Foundation for Medical Care, an affiliate of the Orange County Medical Association.
Maxicare, which has fewer than 1,000 PPO enrollees in Orange County, reported a slight decline in local enrollees, while One Health Plan of California reported flat enrollment gains.
Healthcare observers have said that PPOs, which usually allow their members more choice in terms of doctor selection, among other things, will gain more acceptance among employers that desire something other than a straight HMO health plan.
In fact, PacifiCare Health Systems Inc., the Santa Ana-based parent of PacifiCare of California, announced last week that it will begin offering a PPO option in 2002 that will be marketed alongside its existing HMO option. President and Chief Executive Howard Phanstiel said the PPO is part of PacifiCare’s goal of growing into a full-service managed care company. n
