Heritage Health Group Hospital Service Corp., a provider-owned health plan based in Tyler, Texas, said it will shut down by Jan. 31, 2002.
The plan's chief executive officer, Paul Christman, said it expects to lose $2.2 million this year on revenue of $17 million. Christman said the plan had just under 9,000 enrollees as of June 30, down from about 15,000 at its peak two years ago. However, a document from the Texas insurance commissioner's office dated July 31 indicates that the plan has about 5,800 enrollees.
Christman described the plan as an indemnity product, not an HMO.
Owners are five Texas hospitals and systems: St. Joseph Regional Health Center in Bryan, Trinity Mother Frances Health System in Tyler, United Regional Health Care System in Wichita Falls, Valley Baptist Medical Center in Harlingen and Wadley Regional Medical Center in Texarkana.
Heritage provides marketing and administrative functions, while the hospital owners are responsible for funding the plan's operations in their local markets, Christman said.
Christman, who is vice president in charge of insurance operations at Trinity Mother Frances, said the owners made a "series of decisions" during the past 18 months to disband the plan for financial reasons. Christman declined to say how much the owners have collectively paid to fund the plan.