REVERSING COURSE
HMO Operators Reported a Slight Decline in OC Enrollment in Past Year
By VITA REED
Membership growth at Orange County’s largest health maintenance organizations was off slightly in the past year, with the nine plans on the Business Journal’s annual list reporting a 2% decline.
The drop comes after growth of 6% and 7% in the prior two years.
Orange County is considered a mature HMO market,the nine plans on the list had total enrollment of 1.3 million versus a county population of 3 million.
A caveat: This year’s list includes estimates for three health plan providers. No. 7 Universal Care declined to provide this year’s enrollment, while No. 6 CIGNA Healthcare and No. 8 Aetna Health of California wouldn’t give last year’s figures.
Without the estimates, the remaining six HMOs posted a narrower 1% decline in enrollment. Most figures were as of June 30, though some HMOs reported numbers as of March and April.
Healthcare costs have surged in recent years, which could bode well for future HMO enrollment gains.
HMOs, which typically keep a tight rein on expenses, could come back into favor with employers looking to cut costs amid spiraling health care expenditures in the state.
Memories of the late 1990s HMO backlash,a time when HMOs’ image was sullied by allegations of care delays or denial from industry critics,are fading.
The top three plans on the list reported either flat growth or membership losses during the reporting period.
No. 1 Kaiser Permanente in Anaheim maintained its reign as OC’s biggest HMO. Kaiser said its county membership grew 1% to 343,839.
Next was No. 2 Blue Cross of California in Costa Mesa, which posted a 6% decline to 285,645 local enrollees.
Part of its drop came after Blue Cross didn’t renew its contract for 2003 with CalOptima, an Orange-based agency that administers MediCal benefits for OC residents, according to Lisa Mee-Stephenson, a Blue Cross spokesperson.
Blue Cross and CalOptima had worked together since 1995. But CalOptima said Blue Cross decided to focus its MediCal efforts “in geographies where its MediCal business structure is better suited to either a two-plan model or geographic managed care counties.” The move affected some 30,000 Blue Cross members.
No. 3 PacifiCare of California, a unit of Cypress-based PacifiCare Health Systems Inc., rounded out the top. PacifiCare’s membership fell 7% to 150,000 in OC as of March.
The health plan provider’s Secure Horizons Medicare HMO lost members who signed with other plan providers after PacifiCare adjusted benefits to reflect lower government reimbursement rates and higher healthcare costs, according to company spokesperson Cheryl Randolph (see related story, page 18).
PacifiCare has moved to shed less profitable enrollees to cut its reliance on Medicare reimbursement.
The largest gain came from No. 4 Blue Shield of California in Orange. Blue Shield reported a 13% enrollment gain to 149,979.
Costa Mesa’s No. 5 Health Net of California reported flat enrollment of 131,457.
In the past, Health Net had reported a strong surge in growth, sparked by network changes among health plans in Orange County. Both Health Net and PacifiCare found themselves in public tussles over payments with St. Joseph Health System, the Orange-based operator of three local hospitals, in 2000 and 2001.
CIGNA in Santa Ana reported 93,342 local members while Universal Care, a smaller HMO based in Signal Hill, came in with an estimated 65,000 enrollees.
Aetna reported 54,100 HMO members in OC.
SCAN Health Plan, a Long Beach-based HMO that mainly caters to Medicare recipients, ranked No. 9 on the list, with an OC enrollment drop of 17% to 12,180 members.
PPO Directory
Blue Cross of California is Orange County’s largest preferred-provider organization with 305,796 enrollees, according to this week’s Business Journal directory. That’s up 5% versus a year ago for the company’s Costa Mesa-based operations.
As in previous years, several companies listed in the directory did not carve out specific enrollment figures for OC.
Health analysts say that PPOs, which offer members more flexibility in selecting doctors, have gained on health maintenance organizations in recent years. But the economic downturn may have slowed growth for PPOs, which were particularly popular during times when competition to hire workers was fiercer and employers used benefits packages as a carrot to attract workers.
Orange-based Blue Shield of California was the second-biggest PPO plan in OC with 101,437 members, up 6% from the previous year’s 96,041.
Private Healthcare Systems Inc. in Irvine reported 183,664 PPO members, up 2% from the previous year’s 179,838 enrollees. But Private Healthcare’s numbers include Los Angeles-area figures, and the company wouldn’t break out its OC enrollees.
Other PPOs that report OC-specific members included Santa Ana’s Aetna Health of California with 74,980 members; CIGNA Healthcare in Santa Ana with 54,506 enrollees; PacifiCare Health Systems with 42,900 members; Health Net of California, a unit of Woodland Hills-based Health Net Inc., which reported 20,024 members through April, up 26% from last year; and CorVel Corp. in Irvine with 9,500 members, up 6% from last year.
Several PPOs on this year’s list wouldn’t break out OC numbers, including Lake Forest-based Beech Street Corp., which said it had 16 million U.S. members,the same as last year.
Dental Plans Swell
Enrollment at Orange County’s dental healthcare maintenance organizations and preferred-provider groups posted healthy growth in the past year.
The 11 plan providers on this year’s Business Journal list of dental HMOs and PPOs saw OC membership increase 5% to 1.1 million members in the past 12 months.
Estimates were made for three companies: No. 1 Delta Dental Plan of California and No. 7 Ameritas Group Dental & Eye Care, which declined to give last year’s enrollment number, and No. 3 Aetna Health of California, which wouldn’t disclose this year’s total.
Factoring out the estimates, the remaining eight dental plans posted 14% growth in enrollment.
San Francisco-based Delta Dental Plan of California topped the list with 243,023 OC enrollees. No. 2 CIGNA Dental moved up three spots on the list with a 76% gain in membership to 164,000 enrollees, versus a year ago.
Its membership gains came after CIGNA expanded its plan choice and boosted its dentist network, according to spokesperson Gwyn Dilday.
Aetna Health had an estimated 163,000 members in OC. Aetna was followed by No. 4 United Concordia, a unit of Highmark Inc. of Harrisburg, Pa., which posted a 5% decline in membership to 126,497.
No. 5 Blue Cross of California said its dental HMO and PPO had 101,833 members, up 2% from last year’s total.
No. 6 Aliso Viejo-based SafeGuard Health Enterprises Inc. came in with a 10% membership increase to 69,603. SafeGuard bought the dental HMO operation from Ameritas Group in April. Ameritas reported 63,505 OC dental plan members.
Irvine’s No. 8 Guardian Life Insurance Co. of America moved up three spots with 48% growth in dental plan enrollment to 60,998. The company didn’t respond to requests for comment on the higher member number.
Santa Ana-based PacifiCare Dental and Vision, a unit of Cypress-based PacifiCare Health Systems Inc., ranked No. 9 on this year’s list with 58,681 local members, down 7% from last year.
Most of PacifiCare’s overall enrollment drop came as members left the company’s Secure Horizons Medicare dental plan, according to Cheryl Randolph, a PacifiCare corporate spokeswoman. PacifiCare adjusted its benefits structure to reflect tepid growth in government reimbursement rates.
No. 10 Golden West Dental and Vision reported a 1% decline in enrollment to 50,462 members. And No. 11 GE Wellness Dental & Vision, formerly SmileSaver Dental Plans, posted an 11% membership drop to 43,443.
, Vita Reed
