Wisconsin HMOs turned a profit in 1998, but that was only about half as much as they made the year before.
The state's 24 HMOs posted total net income of $6.7 million in 1998 on total revenues of $2.7 billion, according to annual statements filed with the Wisconsin insurance commissioner and recently made public. That's a drop of 48% from 1997, when 25 HMOs earned $12.8 million on total revenues of
$2.5 billion (April 20, 1998, p. 3). One HMO was sold and renamed in 1998.
"The bottom line is that medical expenses are increasing faster than premium revenues," said Nancy Wenzel, executive director of the Association of Wisconsin HMOs, a not-for-profit trade group. "People are getting more care than what they are paying for through their premium dollars."
Losing money on operations in the state last year were nine HMOs, including three health plans owned by or affiliated with providers.
The three provider plans are Medica Health Plans, part of the Minneapolis-based Allina Health System; Medical Associates Health Plans, owned by a 110-physician multispecialty clinic in Dubuque, Iowa; and Physicians Plus Insurance Corp., owned in part by 378-bed Meriter Hospital in Madison, Wis. Combined, the three plans have about 118,000 enrollees and lost $465,742.
The largest of the three-and the biggest money-loser-was Physicians Plus, with 112,400 enrollees and a total loss of $374,858 last year.
Besides Meriter, the plan's owners include about 180 physicians from the former Physicians Plus Medical Group, Madison. Last year, the clinic merged with the University of Wisconsin Medical Foundation, creating a clinic with more than 800 physicians.
Robert Coats, Meriter's chief operating officer, said the HMO lost money because utilization was up in some areas and extraordinary costs related to patient care were incurred. "That's not an event that is expected to continue," he said.
The Wisconsin division of the 4,100-enrollee Medical Associates plan posted a $37,727 loss because it contributed to local charities, said Lonnie Fawver, director of marketing for Medical Associates.
The plan, which operates in Illinois, Iowa and Wisconsin, posted overall net income of $1.3 million, Fawver said.
Medica, which has only 1,300 enrollees in Wisconsin, blamed its $53,157 in losses in the state on increasing costs associated with medical technology and the price of prescription drugs. Overall, Medica, which has more than 1 million enrollees, posted net income of $14.3 million in 1998. Medica, a dominant health plan in Minnesota, also has enrollees in North Dakota and South Dakota.