HMO Financial Problems
Special E-Mail Bulletin
Hi, everyone.
Weiss Ratings has just released its latest report on HMO financial stability and performance. Many HMOs continue to have problems and several apparently are at risk for going belly-up.
As a follow-up to my recent e-mail bulletin regarding healthplan downcoding and payment delays, here's more information you need to know. I've attached a small snippet of the latest Weiss new release. More complete information is available at the URL at the end. I encourage you to check Weiss Ratings for the whole story.
You simply can't afford to be unaware of the financial condition of your managed care contracting partners.
Gil Weber
10 HMOs at High Risk of Failure
PALM BEACH GARDENS, Fla., October 25, 1999 – Ten of the nation’s HMOs, covering over 533,000 members, are believed to be at high risk of failure due to continuing losses and capital deficits, according to a study by Weiss Ratings, Inc., the nation’s only provider of ratings for most HMOs. The 10 HMOs, all receiving a Weiss Safety Rating of E- ("very weak"), are:
| Company | Capital Deficit ($) 3/31/99 | Total Enrollment |
| Community Health Choice, Inc. (Texas) | 957,526 | 20,564 |
| Heartland Health Plan of Oklahoma | 860,284 | 27,189 |
| Memphis Managed Care Corp. (Tenn.) | 6,953,698 | 56,381 |
| North Medical Community Health Plan (N.Y.) | 1,095,946 | 11,789 |
| PrimeHealth, Inc. (Ala.) | 21,350,562 | 41,481 |
| PrimeHealth of Alabama, Inc. (Ala.) | 2,468,763 | 24,715 |
| PriorityPlus of California, Inc. (Calif.) | 23,046,708 | 101,907 |
| Rio Grande HMO, Inc. (Texas) | 3,416,455 | 165,165 |
| Vista Health Plan, Inc. (Texas) | 3,427 | 26,532 |
| Wellcare of New York, Inc | 17,117,828 | 57,371 |
| Total | 77,271,197 | 533,094 |
"With 10 plans at risk, plus 14 others that have already failed this year, the industry shakeout we’ve been warning about is now clearly here," commented Martin D. Weiss, Ph.D., chairman of Weiss Ratings, Inc. "The silver lining is that this may be the end of a two-year decline in industry profits."
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