Nationwide HMO enrollment has dropped to 74.2 million, the lowest level in five years, according to InterStudy Publications, St. Paul, Minn. HMOs lost 3.8 million enrollees, or almost 5% of their total membership, from July 2001 to July 2002, mainly because of closures, mergers and acquisitions, the research firm said in a new report. HMO enrollment had climbed steadily from 1990 through 1999, when it peaked at 80.5 million. The total number of HMOs in operation fell to 476 in July 2002, from 531 in 2001 and 646 in 1998. Meanwhile, a separate study by investment banking firm Cain Bros., New York, found that integrated healthcare systems are divesting their owned managed-care plans at an increasingly rapid rate. Last year, healthcare systems sold 10 health plans, accounting for 31% of all HMO and PPO sales that year. In 1996, four provider-owned health plans were sold, accounting for 15% of such transactions. Hospitals owned 77 HMOs in 2001, the most recent year for which data were available, down from 91 HMOs in 1998, the study found. However, with industry consolidation, average enrollment in provider-owned HMOs climbed nearly 35% to 82,000 in 2001 from 61,000 in 1998. -- by Laura B. Benko
HMO enrollment at lowest level in five years: study
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