BUSINESSNews in brief - Dec. 27, 2004Quarterly HMO profits top $3 billion Quarterly HMO profits top $3 billionThe profits of the nation's HMOs increased by 33% in the first quarter of 2004, a $742 million gain over the $2.3 billion in net revenue earned in the same period a year earlier, according to an analysis by Weiss Ratings Inc. of Jupiter, Fla. The figure excludes Kaiser Foundation Health Plan, whose profits were affected by regulatory changes and whose results would have greatly increased the overall numbers for increase in earnings. The three HMOs with the largest first-quarter profit gains were California Physician Service, based in San Francisco; Highmark, based in Camp Hill, Pa.; and WellPoint Inc.'s Blue Cross of California, based in Thousand Oaks, Calif. Weiss nonetheless found that rising health care spending continued to create slim profit margins for the HMO industry in general, with 69% of HMOs reporting either negative margins or small margins -- less than 5% -- for 2003. The study covers 544 insurers and is based on publicly filed financial documents. Copyright 2004 American Medical Association. All rights reserved.
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