Managed Care


Many Misjudge HMOs' Slice of Premium Pie

MANAGED CARE December 2002. © MediMedia USA
News and Commentary

Many Misjudge HMOs' Slice of Premium Pie

MANAGED CARE December 2002. ©MediMedia USA

A significant gap exists between how a health care premium dollar is spent and how patients perceive it's being spent, a new Zogby survey reveals.

Respondents believe that 49.5 percent of premiums are spent on medical care, 26.8 percent on insurer's business expenses, and 23.7 percent goes to profit for the insurer.

In reality, 90 percent of premiums are spent on medical care, 7.5 percent for business expenses, and about 2.5 percent is income.

The poll of 800 HMO members with employer-based coverage was conducted from Sept. 16 to 21. The respondents are enrollees of BlueCross BlueShield of the Rochester Area, BlueCross and BlueShield of Central New York, and BlueCross BlueShield of Utica-Watertown.

"The polling data make clear a substantial disconnect between how consumers see their premium being spent and the reality of where the money really goes," says John Zogby, president and CEO of Zogby International. Of the amount spent on medical care, respondents believe that 32.8 percent pays for physician services, 30.1 percent goes for hospital services, 24.6 percent goes for prescription drugs, and 12.5 percent goes for other health care services.

In reality, 42 percent goes to hospital services, 34 percent is for physician services, 18 percent is used to purchase prescription drugs, and 6 percent is for other health services.

Another interesting finding of the Zogby poll is that the level of education of the respondent had little to do with how accurately he can assess how premiums are spent.


2014 Annual HEDIS® and Star Ratings Symposium Nashville, TN November 3–4, 2014
PCMH & Shared Savings ACO Leadership Summit Nashville, TN November 3–4, 2014
Medicare Risk Adjustment, Revenue Management, & Star Ratings Fort Lauderdale, FL November 12–14, 2014
World Orphan Drug Congress Europe 2014 Brussels, Belgium November 12–14, 2014
Healthcare Chief Medical Officer Forum Alexandria, VA November 13–14, 2014
Home Care Leadership Summit Atlanta, GA November 17–18, 2014
6th Semi-Annual Diagnostic Coverage and Reimbursement Conference Boston December 4–5, 2014
Customer Analytics & Engagement in Health Insurance Chicago December 4–5, 2014
Pharmaceutical and Biotech Clinical Quality Assurance Conference Alexandria, VA December 4–5, 2014
9th Semi-Annual Medical Device Coverage and Reimbursement Conference San Diego December 5, 2014
8th Annual Medical Device Clinical Trials Conference Chicago December 8–9, 2014
HealthIMPACT Southeast Tampa, FL January 23, 2015