By mid-1999, the HMO-enrollment growth rate had hit its lowest level of the decade — 2.6 percent from July 1, 1998 to June 30, 1999. A closer analysis may be even more troubling for HMOs: From Jan. 1 to June 30, 1999, total enrollment actually dropped for the first time, by 0.6 percent. After peaking at 81.5 million members by the end of 1998, HMOs lost more than half a million enrollees during the first six months of 1999 — a time when many plans raised premiums to cover operating losses. The figures suggest an industry that has moved well beyond the growth phase into consolidation, and that is struggling to define itself as it matures.
SOURCE: HMO INDUSTRY REPORT 10.1, INTERSTUDY PUBLICATIONS, BLOOMINGTON, MINN., 2000