Unable to compete against newer HMOs that allow patients to get care at individual doctors' offices, Connecticut's oldest HMO plans to go out of business.
Last week, New Haven, Conn.-based Community Health Care Plan, a staff-model HMO that's been up and running for a quarter of a century, was expecting a decision from the Connecticut Department of Insurance on a plan to dissolve the HMO.
Last December, CHCP announced a proposal to transfer the plan's assets and liabilities to North Haven, Conn.-based Blue Cross and Blue Shield, its affiliate since 1987. Under the proposal, CHCP's 43,000 enrollees would be assumed by BlueCare Health Plan, an HMO incorporated by the Blues in 1993.
CHCP had hoped to make the switch effective Feb. 29. A hearing on the proposed dissolution was held Feb. 13. But, at deadline, the insurance department had not announced its decision.
As a staff-model HMO, CHCP provides services to its enrollees through its healthcare centers located in Branford, Bridgeport, Hamden, New Haven, Wallingford, Waterbury and three affiliated family practices. As new HMOs have entered the market, CHCP has struggled to compete. Since 1987, CHCP's market share has declined from 16% to just 4% in September 1995.
In 1987, having depleted its capital reserves, the HMO received a four-year, $24.6 million capital infusion from Blue Cross and Blue Shield of Connecticut. Despite the assistance, CHCP currently has $106,000 in reserve, less than what the insurance department requires.
Over the past six or seven years, CHCP's premiums have been among the highest in the state, causing the plan to lose enrollment, said Albert F. May Jr., Blue Cross and Blue Shield's director of corporate communications. Plan officials blame the higher rates on the cost of operating its health centers.
Today, 15 HMOs are licensed in Connecticut, and many of them allow patients to get their care from individual doctors' offices. The staff-model HMO "just doesn't seem to be attractive," May said.
If the plan closes, an estimated 192 jobs would be eliminated. CHCP's 200 medical professionals have formed an independent corporation, CHCPhysicians, which will continue to serve enrollees under a contract with the Blues.