Financial problems at two of the state`s Health Maintenance Organizations (HMOs) have led to their takeover by the Mississippi Insurance Commission and concerns about how the failures might impact other HMOs in the state.
Mississippi Insurance Commissioner George Dale said the state is currently operating the HMOs to assure that policyholders are taken care of, and that bills are paid.
“Unless we find a buyer for both of them, which is probably unlikely, we will liquidate both of them and pay outstanding claims as far as the money goes,” Dale said. “Then we will assess the existing HMOs to pay the rest of the claims. So there is some protection for the consumers.
“This also hurts other HMOs. Many of them are marginal. You have to assess them to pay for these two that have gone broke, so you could create a domino effect. The HMO industry as we know it today is very tenuous as long as there are this many, and the business is spread out the way it is. Let me be quick to say the managed care theory is a good idea, but it has a lot of pitfalls to be worked out before it is an competitive industry for the standard health insurance business in Mississippi.”
The two HMOs taken over by the state include AmeriCan, which had 7,000 people insured, half of which were Medicaid customers, and Care/Three, which had 6,000 policyholders, most of those casino employees on Gulf Coast.
There have been 16 HMOs licensed to do business in Mississippi. With two taken over by the state, that leaves 14 HMOs.
“A very few of them are writing very much business, and of those writing business, even less of those are making money,” Dale said. “But most of those are owned by entities with a considerable amount of financial capacity, such as insurance companies and hospitals, so we`re not that worried about them now. They have access to capital.”
Dale said that, in his opinion, the population of Mississippi can`t support 14 HMOs. He anticipates there will be mergers and buyouts to reduce the number of HMOs to what the population can support.
“Florida, with a much bigger population base than we have, only has 15 HMOs,” Dale said. “So you can see with their population base and the same numbers that we have, we just don`t have enough population to support all of them we have now.”
Dr. Joan Exline, assistant professor for health policy and administration at the University of Southern Mississippi, said adjustments are still being made in Mississippi and nationwide to efficiently implement managed care.
“This shakeout we`re seeing now in Mississippi and other places in the country, maybe that`s not bad,” Exline said. “Maybe that will be good in the long run. It may benefit the larger HMOs, which have more experience and can control costs better, especially administrative costs.”
Exline said managed care penetration is gradually increasing in Mississippi and the rest of the nation despite bad press about some HMOs which have limited services for patients with legitimate needs. She said some hybrid-type plans are being developed that blend point-of-service plans, providing more choices to policy holders.
“Patients are concerned about having their own doctor, and being able to go out of plan,” Exline said. “The type of plans we are developing are a little easier for some people to accept, and that is why the growth is continuing despite some of the bad press that managed care gets.”
Exline said managed care won`t work if there are attempts to force traditional health care delivery into the managed care system.
“We really have to revamp how we do things,” she said. “I think it is this cycle of revamping that has caused some of the companies to go out of business. Being able to go to any doctor, take any test, and not having to wait, those things may have to change a little. We have to focus on preventative care. That isn`t easy to do, and that is why some of the weaker companies are going out of business. Hopefully some of the stronger HMOs are going to be acquiring them, and maybe some of the administrative costs will go down in long run.
“I don`t know where it is all going to end up. But I don`t think we are anywhere near ready for it to all go away. It will be interesting to see what happens in the next presidential election, if managed care gets back on the agenda with that.”