CMA's Annual HMO Report Shows HMO Profits Down - Health System Cost-Squeeze Tightens

Apr 12, 2000, 01:00 ET from California Medical Association

    SAN FRANCISCO, April 12 /PRNewswire/ -- The California Medical Association
 today released its 1998-99 Knox-Keene Health Plan Expenditures Summary,
 providing information on HMO spending to help consumers and employers choose a
 health plan. In 1998-99 HMO profits were down, reflecting for the first time a
 cost squeeze on health plans that physicians and physician groups have
 experienced for the past five years.
     Noting that many medical groups are insolvent and physicians are leaving
 medical practice, CMA President Marie G. Kuffner, M.D., said, "We've seen
 lately that health plan investors aren't happy with the companies'
 performances. This is further evidence of impending chaos for patient care in
 California unless we all -- plans, physicians, employers, patients and
 government -- find some new solutions."
     The publicly-sponsored health plans that primarily provide coverage to
 Medi-Cal beneficiaries seem to be the only plans experiencing an increase in
 revenue that exceeds operating expenses. While some of those plans incorporate
 a return of profits to providers, CMA believes all public plans should adopt
 such policy.
     "We are surprised that many of the public plans appear to be making excess
 income without sharing that income with underpaid providers," said
 Steve Thompson, CMA vice president for government relations and the report's
     First published in 1993, this is CMA's seventh Knox-Keene Health Plan
 Expenditures Summary. The summary is based on expenditure data derived from
 HMO reports to the Department of Corporations, from shareholder statements
 provided by the publicly traded health plans to Securities and Exchange
 Commission, and from annual reports provided by the Public Health Plans.
     CMA hopes the information in this summary will help health insurance
 purchasers make an informed choice. Consumers must remember that many factors
 should be considered when choosing a health plan. To read the summary on CMA's
 web site, go to and look in the "For Your Information" section.
     The California Medical Association represents more than 34,000 California
 physicians from all regions, modes of practice and medical specialties. CMA is
 dedicated to the health of all Californians.

SOURCE California Medical Association