HMO Enrollments Up, HMO Profits Down

OPEN MINDS, The Behavioral Health & Social Service Industry Analyst Industry News Despite rapid enrollment growth, HMO profitability declined during the period from 1994 to 1997, according to a "lnterStudy HMO Trend Report" released by InterStudy Publications of Minneapolis. Close to 90% of HMOs were profitable in 1994, with an average margin of 2.4% compared with the third quarter of 1997, when only 49% of industry plans were found to be profitable, with an average margin of I .2%. Declining profits could be attributed in part to aggressive pricing strategies, used to attract new enrollees in the 1980s and . . .