| (St. Paul) ... Spending
by Minnesota's health plans on patient care increased just
6 percent in 2003, compared to a 15 percent jump the prior
year. According to reports filed today with state regulators,
health plans spent $6 billion in 2003 on payments to hospitals,
clinics and others who provide medical care.
Revenues
for Minnesota's health plans were up 6 percent, with the average
premium increase dropping to 9 percent in 2003, in comparison
to 12 to 16 percent jumps in previous years.
"The
double-digit increases in medical spending and premiums stopped,
" said Julie Brunner, executive director of the Minnesota
Council of Health Plans, a trade group representing Minnesota's
nonprofit health plan companies. "We're still spending more
and more on health care, but the rate of growth is slowing
and that's good news for employers and consumers."
Two
of the reasons for the slow down, Brunner said, are the education
and cost sharing efforts of employers, and the investment
health plans are making in one-on-one patient education and
support to help patients manage chronic diseases. In 2003,
plans spent more than $62 million on health improvement initiatives,
a fast growing category of administrative expenses.
Yet
revenues were not enough to cover expenses for all Minnesota's
health plans in 2003. One company, Sioux Valley Health Plan,
dipped into its state-mandated reserves to cover expenses
that exceeded revenues.
Other
trends in the annual filings include:
•
48 percent of Minnesotans are enrolled in managed care health
plans
•
MinnesotaCare enrollment dropped 6 percent - more than 8,700
people
•
Administrative costs averaged 8 percent of premium revenue
Margins
tight, required reserves increase
Minnesota's
eight nonprofit health care companies collected a total of
$6.7 billion in revenue in 2003. T he industry as a whole
posted an operating margin of 1.6 percent of revenue, or $104.7
million. In addition, investment income added an additional
$49 million, making the total contribution reserves $150 million.
Any
operating gain posted by a nonprofit health plan must be placed
in reserve. State law addressing HMO solvency requires that
health plans maintain a reserve of between one and three months
of operating expenses. This reserve protects consumers if
the company experiences a financial shortfall. As spending
on care increases, so must the dollars in these reserves.
Currently, health plans hold an average of 2.3 months of operating
expenses in reserve.
"Unlike
our for-profit investor-owned counterparts in other states
that pay shareholder dividends, any money nonprofit health
plans have left over at the end of the year stays in Minnesota
to lower premium increases, fund programs to improve the health
of Minnesotans and protect consumers," Brunner said.
Enrollment
up overall
Overall
enrollment remained steady at 2.4 million. Enrollment in government-supported
products was mixed: Prepaid Medical Assistance enrollment
was up 3 percent, while MinnesotaCare enrollment decreased
by 6 percent, or more than 8,700 people. This decrease was
expected, Brunner said, because in October 2003 new laws tightened
MinnesotaCare eligibility guidelines.
State
statute requires Minnesota's health plans to submit reports
on their financial status. The reports are independently audited
to comply with generally accepted accounting principles, standards
of the Financial Accounting Standards Board, and definitions
and standards promulgated by the National Association of Insurance
Commissioners and the State of Minnesota. Established
in 1985, the Minnesota Council of Health Plans is a trade
association of eight licensed nonprofit health plans. Council
members have pioneered a style of health care that has improved
quality and consumer satisfaction and expanded access to health
care for all Minnesotans. The council and its members are
leaders in health care reform, practice guidelines development,
technology assessment and data collection and analysis.
For information
about an individual health plan's numbers, contact:
Monika Strom
(651) 662-6889
Karl Oestreich
(651) 662-1502
Blue Plus
Eagan, MN
Cathy Nevanen
First Plan of Minnesota
Duluth, MN
(218) 529-9957
Chris Reese
HealthPartners
Bloomington, MN
(952) 883-5304
Larry Bussey
Medica
Minnetonka, MN
(952) 992-8013
Bonnie Hays
Metropolitan Health Plan
Minneapolis, MN
(612) 337-7160, office
Marcus Merz
PreferredOne
Golden Valley, MN
(763) 847-3201
Ruth Krystopolski
Sioux Valley Hospitals
and Health System
Sioux Falls, SD
(605) 328-6801
Debbie Weiner
UCare Minnesota
Minneapolis, MN
(612) 676-3562
|
