Six-hospital Carilion Health System, Roanoke, Va., said it would sell its 21,000-member Carilion Health Plans, lay off about 50 employees, and slow capital spending to offset a projected $20 million increase in expenses next year. The for-profit HMO has lost between $2 million and $4 million annually since its 1992 launch, and Carilion officials said it was unlikely the health plan would ever enroll enough members to break even. The announcement follows a lengthy contract dispute between Carilion and the state's largest insurer, Trigon Healthcare, Richmond, Va., which was acquired by Anthem this year. The companies signed a new five-year contract in June. Separately, California regulators announced that Lifeguard, San Jose, Calif., will be shut down Dec. 31, leaving 168,000 HMO members and 20,000 PPO members to find new coverage. The health plan, which lost $3.9 million in the first half of the year, was seized by the state earlier this month. It will be the fourth HMO closed by the California Department of Managed Health Care since the department was established in 2000. -- by Laura B. Benko
Va. system to sell HMO; Calif. to close Lifeguard
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