Most large HMOs in Texas lost money in the second quarter, which may blunt buyer interest in two large plans for sale in the state.
One of those plans, 314,000-enrollee Harris Methodist Health Plan, Arlington, posted a $17 million loss on revenues of $169.2 million in the second quarter.
The plan is owned by Irving-based Texas Health Resources, which announced its intention to sell the plan a year and a half ago. THR's inability to sell the plan has contributed to the delay of the system's mergerlike partnership with five-hospital Baylor Health Care System, Dallas.
Harris spokesman Brian Levinson said the same issues that have challenged other HMOs, such as the rising costs of care and prescription drugs, affected Harris' performance. But Harris is also burdened by unprofitable long-term contracts and accelerating operating losses.
Last year the plan lost $49.6 million and set aside $49.5 million against future losses.
Local newspapers have named PacifiCare of Texas as a likely buyer of the plan, but both companies declined comment.
PacifiCare, with 187,000 enrollees, posted a profit of $5.1 million on $131.6 million in revenues last quarter.
Overall, profits were the exception. Humana Health Plan of Texas, with 280,000 enrollees, led the pack in losses, with a $27.1 million deficit on revenues of $191.5 million.
A financially weak industry might also affect Aetna U.S. Healthcare's attempt to sell the commercial operations of its NYLCare units in Dallas and Houston.
Houston-based NYLCare Health Plans of the Gulf Coast posted a $5.2 million profit on $231.1 million in revenues last quarter. But historically the plan's commercial operations have lost money. NYLCare Health Plans of the Southwest, Dallas, posted a loss of $1.2 million on $123.6 million in revenues.