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Another interesting eBMJ article!From: RModugno@aol.comSat Jan 15 12:58:00 2000
Leading health maintenance organisation near bankruptcy Fred Charatan , Florida Harvard Pilgrim Health Care (HPHC), the largest and fastest growing health maintenance organisation in New England, has been placed by court order into temporary receivership. Linda Ruthardt, insurance commissioner for Massachusetts, last week assumed management of the $2.8bn (£1.75bn) a year health plan. The action, one step away from bankruptcy, is for the purpose of conservation and rehabilitation of HPHC, which is ranked one of the top 10 health maintenance organisations in the United States. HPHC provided care in 1998 to over 1.3 million members in Massachusetts, New Hampshire, Maine, and Rhode Island. It employs over 20000 doctors and has affiliations with over 140 hospitals. Its president, Charles Baker, told employers last October that the organisation was ending its Rhode Island operations at the end of 1999, affecting 127000 members there. Most of them found a new insurer but paid higher monthly premiums. More than 3000 doctors, nurse practitioners, midwives, and others who worked for HPHC are without jobs. HPHC announced that 1999 losses could total $177m, generating a negative net worth. Nancy Turnbull, a health insurance specialist at the Harvard School of Public Health, said that a health plan could operate with a negative net worth for some time, as long as cash keeps coming in to meet current expenses. But cash can dwindle rapidly if subscribers start to leave, in the same way that nervous depositors pull their cash out of a troubled bank. "To allow this to drag out will clearly worsen the situation," said Robert Bernstein, chairman of the legislature's joint insurance committee, predicting widespread defections. Mr Bernstein and others are worried about the impact on other Massachusetts health maintenance organisations if large numbers of subscribers jump ship. "Other insurers may not be able to absorb the volume," Mr Bernstein said. Executives at Tufts Health Plan and Fallon Community Health Plan, which suffered major losses last year and were placed with HPHC on a state watch list, said they are scrambling to gear up for an onslaught if HPHC is liquidated. ****************************************************************************** ******** Robert Modugno MD MBA FACOG Marietta, GA
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