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HMO Profits Rise

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Total net income at U.S. health maintenance organizations increased to $3.6 billion in the first quarter, up 21% from the total for the first quarter of 2004.[@@]

Although the increase was impressive, it is smaller than the 61% increase the HMO industry achieved between 2003 and 2004, according to researchers at Weiss Ratings Inc., Jupiter, Fla., the firm that published the profit data.

The HMO with the biggest profit was Kaiser Foundation Health Plan Inc., Oakland, Calif., which is known for sticking most closely to the original “staff model” HMO concept. Kaiser is reporting $552 million in net income for the first quarter, up from $431 million for the first quarter of 2004.

The runner-up, Horizon Healthcare Services Inc., Newark, N.J., is reporting $50 million in net income, up from $15 million in net income.