FOR IMMEDIATE RELEASE:
October 16, 2003

FOR INFORMATION CONTACT:
Kelley Elwood, 312/580-6497
Elizabeth Morgan, 312/853-6528

HMOs Continue to Profit As Enrollment Declines, Premiums Increase;
Medical Society Guide Helps Assess Value of Premium Dollar

Chicago, IL - Illinois’ HMO patients continue to pay higher premiums, but that doesn’t mean that money is going toward their medical care. The “2003 Guide to Illinois HMOs,” released today and published annually by the Illinois State Medical Society, shows premiums paid by Illinois’ HMO patients increased 12.7 percent, while enrollment in these managed care plans declined five percent. All HMOs operating in Illinois in 2002 had positive net worth, in fact, from 2001 to 2002, Illinois HMOs’
net worth increased, on average, 10.3 percent.

“With health insurance premiums on the increase, it is important to know how plans are spending your money,” said William E. Kobler, M.D., ISMS president. “Patients should know the financial health of plans in order to get the most for their health care dollar.”

Of the HMOs operating in Illinois in 2002, 17 made a profit, six took a loss and one broke even. HMOs spend a portion of their total income on administration, another part on medical care, and the remaining amount is considered profit. Those HMOs with more than 10 percent of their business in Illinois in 2002 made an average profit equal to 8 percent of total income, an increase in income from the 6.2 percent of total income made in 2001. The amount spent on administration among these HMOs ranged from 7.1 percent to 66.5 percent in 2002. The higher the percentage that goes toward administration and profit, the lower the percentage there is to go toward medical care. The percentage spent on administration is virtually unchanged from 2001.

HMO Guide 2003

Additional findings show that the number of Illinois Medicare and Medicaid patients who chose to participate in HMOs has declined by 36.6 percent and 10.2 percent respectively.

The Guide also shows that in 2002, patients visited their physicians 35.8 percent less than in 2001 and are spending more days in the hospital, with the average day count climbing to 0.46 days per patient from 0.33 days per patient.

While these figures provide some insight into the business practices of HMOs in Illinois, the guide is meant to help consumers and their employers in the decision-making process of choosing a health plan. Specific data on each HMO helps readers make value comparisons between plans.

The information in the guide was taken from each HMO’s 2002 annual report. These reports must be filed yearly with the state’s Department of Insurance, and are publicly available. All HMOs were offered the opportunity to explain and comment on the information reported about it; comments received are included in the guide.

The guide is available for no charge at the ISMS site at www.isms.org.

The Illinois State Medical Society is a professional membership association representing 14,000
physicians statewide practicing in all specialties.

William E. Kobler, M.D. is a board-certified family physician practicing in Rockford, Il.

Twenty North Michigan Avenue, Suite 700 Chicago, Illinois 60602 Telephone: 312-782-1654 Toll Free: 800-782-ISMS Fax: 312-782-2028