InterStudy Publications, a division of Decision Resources, has released The HMO Financial Performance Report and Outlook, a comprehensive financial and market analysis of HMO sustainability and market exit. Seventeen financial and organizational characteristics were identified which distinguish HMOs that left the market from those that remain. These characteristics are combined into an index of HMO sustainability and market exit which indicates how similar current HMOs are to those that previously left the market.

(Photo: http://www.newscom.com/cgi-bin/prnh/20000303/DECISION )

"This multi-factor approach is superior to analyses that use only one factor, such as market share or profitability to handicap health plans," says Richard Hamer, InterStudy's Director and lead report author. "It is a comprehensive approach that accounts for the breadth of health plan operations. This report raises the question of whether any health insurance organization is sustainable without care management."

The HMO Financial Performance Report and Outlook provides a rational, defensible and explainable means for evaluating health plans. The report analyzes 98 HMOs that left the market between 1999 and 2001. Among its findings, smaller HMOs who stuck with restrictive gatekeeper benefit designs, and did not offer out-of-network coverage were more likely to leave the market. HMOs that left the market were also unable to improve either administrative expenses or medical loss ratios over the three year period prior to market exit.

The report finds that the majority of HMOs have relied on premium increases to maintain profitability, while allowing medical and administrative expenses to rise. The report also finds that a minority of HMOs, approximately one in four, succeeded in lowering medical expenses per member per month in 2001.

About InterStudy Publications

InterStudy Publications, a division of Decision Resources tracks changes and trends in health insurance services, enrollment, and profitability. Visit InterStudy Publications at www.interstudypublications.com.

About Decision Resources

Decision Resources, Inc. is a world leader in research publications, advisory services, and consulting designed to help clients shape strategy, allocate resources, and master their chosen markets. Visit Decision Resources at www.dresources.com.

All company brand or product names contained in this document may be trademarks or registered trademarks of their respective holders.

   For more information, contact:    Meg Schmidt    Communications Specialist    InterStudy Publications    1-800-844-3351 x105    mschmidt@interstudypublications.com     Heath Hickok    Marketing Manager    InterStudy Publications    1-800-844-3351 x143    hhickok@interstudypublications.com 

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SOURCE: Decision Resources, Inc.

CONTACT: Meg Schmidt, Communications Specialist of InterStudy
Publications, +1-1-800-844-3351 ext. 105, mschmidt@interstudypublications.com;
or Heath Hickok, Marketing Manager of InterStudy Publications,
+1-1-800-844-3351 ext. 143, hhickok@interstudypublications.com

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