Large HMOs Do Well While Small Ones Slide

Weiss Ratings reports that the nation's HMOs lost a collective $187 million during 1999, despite the positive performance of most of the country's largest managed care organizations.

Chairman Martin Weiss says the disparity between smaller and larger plans is growing — an observation that supports the critical-mass theory that is driving the current round of HMO consolidation. The 34 largest HMOs posted aggregate profits of $753 million. Of the smaller plans, 57 percent of those with with fewer than 100,000 members lost money.

On the positive side, the country's 53 Blue Cross and Blue Shield plans made $172 million on underwriting operations last year, after posting $788 million in underwriting losses in 1998. Blues plans had managed to stay in the black because of investment income.