Three not-for-profit South Carolina hospital systems have found a buyer for the HMO they jointly own and planned to close at year-end.
But the hospital owners have carved their own employees out of the deal.
HealthFirst-a for-profit health plan owned by four-hospital Greenville (S.C.) Hospital System, 364-bed Anderson (S.C.) Area Medical Center and three-hospital Spartanburg (S.C.) Regional Healthcare System-was to cease operations Dec. 31 (Oct. 11, p. 3).
But last month, HMO Blue, a subsidiary of Blue Cross and Blue Shield of South Carolina, announced it would cover 6,300 HealthFirst enrollees. About 11,000 employees of the three systems will not be covered by HMO Blue.
Financial terms were not disclosed for the deal, which takes effect Jan. 1.
The 11,000 hospital employees will be covered by the self-insurance plans at their respective hospitals, said Donna Thorne, spokeswoman for Blue Cross and Blue Shield of South Carolina.
That's what the hospitals wanted, said Ruth Shuck, HealthFirst president and chief executive officer.
"Why would a large hospital that can afford to self-fund want to pay a premium that would be higher than its liability would be?" Shuck asked.
HealthFirst, a 3-year-old for-profit managed-care joint venture, had about 19,000 enrollees, according to the South Carolina Department of Insurance. For the first nine months of this year, it reported a net loss of $6.9 million on premium revenues of $22.5 million. The HMO's net worth was $3.5 million, according to the state.
Excluding the HealthFirst enrollees it picks up, HMO Blue has about 56,000 members. For the nine months ended Sept. 30, it reported a net loss of $578,000 on premium revenues of $35.5 million; the HMO's net worth was $2.3 million, according to state figures.
HMO Blue, which has existed since 1994, has only commercial enrollees, Thorne said. Though Blue Cross and Blue Shield of South Carolina is based in Columbia, it also has a large office in Greenville.
Hunter Kome, spokesman for Spartanburg Regional, said his system already had a self-insured plan. To accommodate the 2,000 or so employees affected by the HealthFirst change, the system created a second self-insurance plan, which duplicated HealthFirst benefits, he said.
At Greenville Hospital System, about 5,500 employees and an equal number of their dependents used HealthFirst.
The system has had its own PPO for about 10 years, and with the sale of HealthFirst, employees will revert to the system's existing product, said Douglas Dorman, Greenville's vice president of human resources.
"Given the size of our group it's less expensive for us to have a self-insured plan," he said.