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MANAGED CARE January 2001. ©MediMedia USA
NEWS AND COMMENTARY

More HMOs to fold, consolidate in 2001

More than six dozen HMOs have characteristics that put them in danger of going out of business, according to projections by InterStudy publications. InterStudy looked at specific operational aspects of HMOs that shut down in 1999 and determined that 75 now operating fit the same mold. These characteristics of plans that ceased operations are significantly different from better-performing HMOs:

 Ceased operation in 1999
(Averages)
Rest of HMO industry
(Averages)
Enrollment per plan31,600142,428
Medical loss ratio92.3%88.5%
Administrative expense ratio17.4%14.1%
Operating profit/loss–11.8%–1.1%
Days of unpaid medical claims6155
SOURCE: NATIONAL HMO FINANCIAL DATABASE, INTERSTUDY PUBLICATIONS, ST. PAUL, MN., 2000