After a year of decline, Orange County’s health maintenance organizations rebounded during the past year.
The eight HMOs on this year’s Business Journal list reported a 5.6% gain in local membership to about 1.3 million enrollees, compared to just less than 1.2 million members a year ago.
HMOs are generally less expensive than other forms of health insurance and use things such as patient co-payments, rather than pricey deductibles, and that could have spurred the membership gain.
Back in the 1980s and 1990s, HMOs saw large membership gains as businesses tried to deal with double-digit healthcare cost hikes. But in the late 1990s, a backlash against HMOs by patients, doctors and politicians hurt enrollment,although such sentiments later eased.
Today, the enrollment pace has slowed as new forms of health insurance have emerged, such as health savings accounts or plans with high deductibles but more freedom to choose doctors.
HMOs try to control healthcare costs by encouraging regular checkups that can prevent expensive care for problems that would otherwise go undetected, using primary care doctors to direct patients’ care and monitoring the use of more expensive specialists.
Enrollment
The Business Journal list is ranked by plan enrollment, with figures compiled from the California Department of Managed Care and the companies themselves.
Kaiser Permanente, an Oakland-based plan, continued its run in the No. 1 spot. Kaiser had 392,000 enrollees in the county, 2% higher than a year ago.
Kaiser’s enrollment has more than doubled since the early 1990s. To go with the growth, it has aggressively expanded in the county.
Kaiser opened a hospital on Sand Canyon Avenue in Irvine last year and is starting work on a new hospital in Anaheim that will replace its aging facility on Lakeview Avenue.
In an earlier interview, Julie Miller-Phipps, Kaiser’s senior vice president and OC executive director, said the Sand Canyon hospital “has been a big help” in driving membership growth.
“It’s a big beautiful building, so it’s very visible,” Miller-Phipps said.
Anthem Blue Cross of California, the No. 2 plan, posted the highest enrollment gain,its OC enrollment shot up 23% to 296,806 people.
The company attributes the growth to new products and vision insurance.
“We believe (the growth) reflects the value of the products and services we offer. We continue to bring new products to the market for both individual consumers and employers,” Sally Kweskin, director of corporate communications for Anthem Blue Cross, said. “Our sales of vision products have exceeded our expectations. We find that consumers value the access to providers that are not found in other vision plans, including Lenscrafters and Sears Optical.”
The list’s No. 3 plan, UnitedHealthcare/PacifiCare, a Cypress unit of Minnesota’s UnitedHealth Group Inc., reported an un-changed local enrollment of 180,000 members.
Woodland Hills-based Health Net Inc. came in at No. 4 on the list with 150,000 OC members, a 1% rise from last year’s total.
Blue Shield of California, a San Francisco-based HMO, ranks No. 5 on the list. Blue Shield’s local membership was down slightly at 107,943 members, compared to 108,954 a year earlier.
No. 6 Aetna Health of California reported 67,233 enrollees. An Aetna spokeswoman said the company added lines of business to this year’s HMO count that were not included last year, so its percentage gain or decline could not be determined.
Aetna was followed by No. 7 Cigna Healthcare, a unit of Philadelphia’s Cigna Corp., with an estimated 50,000 members.
The HMO list is closed out by Scan Health Plan, which is located just over the county line in Long Beach. Scan, an HMO that serves the Medicare market, grew its local membership by 6% to 19,345 enrollees.
PPO Directory
The six preferred provider organizations that reported OC enrollment figures together posted a 1.5% increase during the past year.
The five remaining companies on the directory didn’t provide local enrollment figures.
PPOs differ from HMOs in that they allow patients more leeway in their healthcare decisions, albeit at a higher cost.
They gained some popularity at the expense of HMOs in the past decade or so, particularly during the late 1990s and early 2000s, when competition for workers was more cutthroat and employers were more likely to use benefit packages as hiring incentives.
Today, some analysts believe that PPOs’ appeal could be limited because of economic fluctuations and a bit of relaxation among HMOs in allowing access to specialist doctors.
Only one PPO, Anthem Blue Cross, had a double-digit membership percentage gain. Anthem said its OC PPO enrollment grew 10% to 298,072 members.
Blue Shield of California said its local PPO membership rose 8% to 130,578.
Aetna Health of California’s PPO membership fell 3% to 128,099 enrollees.
Health Net Life Insurance Co.’s OC PPO membership fell 14% to 23,000 en-rollees, something that spokesman Brad Kieffer said was “a factor of the current economy.”
Health Net has seen its customers go from higher-cost plans, such as PPOs, to lower-cost ones, Kieffer said.
While Health Net posted a higher percentage drop than Aetna Health did, it actually lost about the same number of enrollees as Aetna.
MultiPlan Inc., an Irvine-based PPO, said its local enrollment dropped 7% to 107,000 members,this was the biggest decline in terms of actual enrollees.
Interplan Health Group, which is based in Farmington, Conn., is the largest PPO by membership on the directory. The Business Journal estimates it has 600,000 local members.
Beech Street Corp., a Lake Forest-based business unit of Illinois’ Viant Holdings Inc., has an estimated 160,000 local enrollees. Beech Street, which was established in 1951 and put its first preferred provider network together in 1984, is considered a formative figure in the PPO movement.
We estimate that Private Healthcare Ser-vices, owned by Private Healthcare Systems Inc. of Waltham, Mass., has 135,000 OC members.
