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ISMS Press Release - November 25, 1996
Illinois HMO Study
November 25, 1996
For information:Pete Friedmann or Peter Gallager info@isms.org
ISMS Dept. of Public Relations
312-782-1654, x1413 or 1288
STUDY: PATIENTS, BUSINESSES MUST QUESTION HMOs TO ENSURE VALUE
Chicago-Illinois patients and businesses selecting health plans during end-of-year open enrollment periods will find that Health Maintenance Organizations (HMOs) operating in the state returned as little as 47 cents - and as much as $1.49 - in health services for every dollar of income last year, according to a study released today by the Illinois State Medical Society (ISMS).
"There are big differences among HMOs in Illinois," said ISMS Sandra F. Olson, M.D. "These findings should help patients become better informed about what is available, ask better questions of either the plans or their employers, and get better value for their health care dollars."
The study, which looked at the plans' medical expense ratios, administrative costs and profits, found that in 1995 the 37 HMOs operating in Illinois returned in health services to patients between 47.15 and 149.11 percent of the income they collected.
Plans spent up to 40 cents or more of every dollar on paperwork and administration, and plans pocketed as much as $387 in profit last year from every patient they covered. The most profitable HMOs in the state were among those which spent the least actually providing medical care, the study found.
"Patients and purchasers can look at these results, assess if a plan's profits and administrative expenses appear to be in a reasonable balance, and determine whether a plan appears to return a fair value in health care services for the dollars the plan takes in," Dr. Olson said.
"This study presents objective information on the HMOs. It provides a starting point for people reviewing HMOs and making decisions on the selection of a plan."
The ISMS study further reported on HMOs' longevity, size, geographic areas of coverage, and financial stability. It looks back at HMOs' historical data to see if the most recent results are anomalous or indicative of a trend. It also lists those HMOs which serve Medicare or Medicaid patients.
"Patients and business purchasers will want to know if an HMO has a track record and if it is financially viable before they make a decision," Dr. Olson said. "Most importantly, they will want to know if they will get value for their money."
Total HMO enrollment in Illinois had climbed to nearly 2 million people by the end of 1995, up more than seven percent from 1994.
The information in the study was taken from the annual reports the HMOs are required to file with the state Department of Insurance. Each HMO was offered the opportunity to explain and comment on the information reported about it; comments received were included in the report.
The complete study is available here or in hard copy by contacting ISMS at 20 N. Michigan Ave., Suite 700, Chicago, IL 60602 or calling 1-800-782-ISMS
The Illinois State Medical Society represents 18,000 physicians practicing statewide in all specialties. Dr. Olson is a board-certified neurologist practicing in Chicago.
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