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HMO Profits Improved In First Quarter

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NU Online News Service, Nov. 26, 11:02 a.m. – U.S. health maintenance organizations recorded a total net profit of $323 million for the first quarter, up 8% from the total for the first quarter of 2000.

But Weiss Ratings, Inc., Palm Beach Gardens, Fla., the insurance rating service that compiled the figures, says as many as 40% of the HMOs may have lost money during the first quarter.

Most of the money-losing HMOs were small, with 100,000 or fewer enrollees, Weiss says.

Small HMOs lost a total of $21.7 million in the first quarter, and 44.5% of the companies in the small HMO category lost money, Weiss says.

Although the first-quarter results looked good, Weiss analysts say they believe recent increases in unemployment levels are now hurting HMO results.

Loss of jobs is probably cutting enrollment levels, and it may also make it more difficult for HMOs to continue to raise rates, Weiss says.


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