Health maintenance organizations in Orange County posted steady growth during the past year, though a pair of plans saw their enrollments surge.
The county’s managed care sector was relatively quiet last year, compared to 2005, when UnitedHealth Group Inc. bought out Cypress-based PacifiCare Health Systems Inc. for $9.2 billion.
The nine HMOs on this week’s Business Journal list reported a 6% increase in local membership to 1.23 million people, compared to 1.16 million the previous year.
The list is ranked by enrollment, with figures compiled from the California Department of Managed Care and the companies themselves.
OC and California are considered mature HMO markets,the state is an influential region in the growth and development of managed care.
HMOs work to control healthcare costs through a combination of preventive care, emphasis on steering patients to primary care doctors and carefully watching the use of more expensive specialty doctors.
Huge membership gains for HMOs were common back in the 1980s and 1990s, as businesses sought ways to control rising healthcare costs. The pace of enrollment has slowed considerably after different forms of health plans emerged.
Meanwhile, a backlash against HMOs from consumers, doctors and politicians also took a bite out of enrollment, though sentiments have improved during the past decade.
This year’s list has a caveat: Enrollment figures for No. 1 Kaiser Permanente and No. 5 Blue Shield of California are estimates.
The majority of membership figures were as of June 30.
Kaiser Permanente continued its reign as OC’s largest HMO, with an estimated 372,000 enrollees in OC.
Kaiser was followed by No. 2 Blue Cross of California, which saw its local enrollment increase 5% to 235,750 people. Blue Cross’ growth catapulted it ahead of No. 3 UnitedHealthCare/PacifiCare.
UnitedHealthCare/PacifiCare’s membership was nearly flat at 232,000 members, a year after seeing major growth from UnitedHealth Group’s PacifiCare buy.
The biggest local enrollment jump among the HMOs came from No. 4 Health Net of California. Health Net’s OC membership shot up 53% to 141,000 people. The only HMO that posted a decline was No. 9 Great-West Healthcare, which was down 38% to 6,500 members. Great-West is a unit of Englewood, Colo.-based Great-West Life & Annuity Co.
Health Net attributes the growth to several factors, including stable pricing, “creative broker outreach” and growth in its Healthy Families commercial HMO plan, said spokesman Brad Kieffer. Healthy Families is designed to cover children whose parents don’t qualify for traditional Medi-Cal publicly subsidized coverage.
The Business Journal estimates that Blue Shield has 129,000 OC enrollees. No. 6 Cigna Healthcare follows with 50,870 local HMO members.
For Aetna, enrollment was up 28% to 48,580 local members.
Scan Health Plan, a Long Beach-based HMO that serves senior citizens, came in at No. 8 with a 4% enrollment gain to 17,251 members.
PPO Directory
Several companies on the Business Journal’s separate preferred-provider directory declined to provide local enrollment figures.
The plan providers that gave local numbers posted a 6% gain in enrollment during the past year.
Of the plans that reported figures, none grew more than 5%.
Interplan Health Group, the largest PPO, saw flat enrollment at 590,000 members. Interplan is a unit of Interplan Health Group of Farmington, Conn.
Blue Cross’ local PPO posted a 5% gain to 267,517 members.
Beech Street Corp. of Lake Forest had an estimated 160,000 OC members. Beech Street now is owned by Naperville, Ill.-based Viant Holdings Inc. (see story, page 4).
Cigna’s PPO enrollment was up 5% to 42,077 members. UnitedHealthCare/PacifiCare’s local PPO enrollment was up 3% to 31,000 members. Health Net’s PPO enrollment was flat at 23,000 members.
First Health, a unit of Bethesda, Md.-based Coventry Health Care Inc., reported 37,000 members. First Health was estimated with the same figure last year.
Great-West’s PPO enrollment was the only one to decline,12% to 11,000 members.
PPOs, which give their members more leeway in selecting their doctors, albeit at a higher cost than HMOs, gained popularity at the expense of HMOs in the past decade.
Fluctuations in the economy and a bit of relaxation among some HMOs in terms of allowing access to specialist doctors could limit PPOs’ appeal. PPOs were particularly popular during the go-go years of the late 1990s, when competition to hire workers was cutthroat and employers were more likely to use benefit packages as hiring enticements.
