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HMO Profits Soar 60%

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NU Online News Service, Jan. 20, 2004, 11:32 a.m. EST – U.S. health maintenance organizations reported a 60% increase in profits for the first 3 months of 2003.[@@]

Successful efforts to cut costs and raise rates increased total HMO profits to $2.3 billion for the quarter, up from $1.4 billion for the first quarter of 2002, according to Weiss Ratings Inc., Jupiter, Fla.

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Weiss also compared HMO profits for the first quarter of 2003 with HMO profits for the first quarter of 2001.

The percentage of HMOs reporting a profit rose to 80.2%, up from 61.6% in the first quarter of 2001, and profitability improved sharply at HMOs of all sizes, Weiss says. In earlier comparisons, Weiss found that large, publicly traded HMOs were flourishing as many small, nonprofit HMOs were struggling to survive.