Managed care plans now cover medical costs for more than 200,000West Virginians but growth is slowing, according to a new report.
Though the number increased from 128,000 at the end of 1996, itreached a peak in September of last year.
After that, Public Employees Insurance Agency enrollment inmanaged care decreased 13 percent, said Jill McDaniel of the WestVirginia Hospital Association.'HMO growth is leveling off,' she said.In the only report of its kind, the hospital association compiled1997 statistics from the state Insurance Commission, PEIA, Medicaidand Medicare.Currently, 11 percent of the state's population belongs to ahealth maintenance organization.West Virginia was one of the last states to develop managed careoptions as opposed to traditional fee-for-service insurance.Lagging behind enabled the state to examine others and refineregulations, said Insurance Commissioner Hanley Clark.'We anticipate managed care to grow especially as the state movesforward with its Medicaid program,' Clark said.Currently nine counties offer managed care to Medicaidparticipants. The state Department of Health and Human Resources hasproposed expanding it to another eight.Increased participation hasn't helped all state health maintenanceorganizations make money, however.Five of seven HMOs in the state still were operating in the red atthe end of 1997. They lost a total of $17.2 million for theiroperations in West Virginia and other states.The losses are decreasing, however. In 1996, combined losses werenearly $40 million.The two HMOs that made a profit were Health Plan of the Upper OhioValley, the state's oldest HMO, and MAMSI, also known as OptimumChoice.Carelink, a subsidiary of Charleston-based Camcare, lost about $6million, down from about $8 million in 1996.Al Mytty, Carelink chief executive officer, said it traditionallytakes five years for an HMO to operate at a profit. The HMO finishedits third year in December.'We expect to break even next year, our fifth,' Mytty said.Carelink also gained more membership than any other HMO last year.It now controls nearly 29 percent of the state HMO market, with58,671 enrollees.Carelink's gains were with commercial members and PEIA.The leading HMO, Health Plan of the Upper Ohio Valley, enrolled60,698 at the end of 1997.Six of seven HMOs gained membership.PrimeOne lost about 1,000 enrollees. McDaniel attributed that toa loss of PEIA members due to changes in the premium rates.For the first time, hospital officials learned that 25,317Medicare recipients are enrolled in managed care, McDaniel said.Another surprise was the number of privately insured customersusing an HMO compared to public programs. Forty-nine percent of HMOcustomers come from private plans, she said.Officials still question whether West Virginia can sustain sevenHMOs in a state with relatively few residents, many of whom live inrural counties.Clark said he would not be surprised if there were mergers in thenext few years.'I do feel seven HMOs operating successfully in a population of1.8 million is going to be difficult,' he said.Therese S. Cox can be reached at 348-4874.
