Financially, did health plans do better last year than in 1998 or worse? The answer may depend on whom you talk with and the indicators you consider.
The rating company A.M. Best says for the first nine months of 1999, profitability of 9 of the 15 largest publicly traded MCOs improved over the same period in 1998. A big reason, says Best, was a drop in special charges one-time expenses associated with mergers or restructuring.
But Weiss Ratings says that second-quarter earnings for HMOs fell to $97 million, after reaching $274 million in the first quarter of the year "a big disappointment," says chairman Martin Weiss. Even worse, HMOs with fewer than 100,000 members lost a collective $155 million in the second quarter, after losing $51 million in the first three months of the year.
Weiss says 16 HMOs failed last year, up from nine in 1998.