West meets east: Philadelphia HMOs follow California into price war

Article Abstract:

Six Philadelphia, PA-based health maintenance organizations (HMO) are cutting rates to gain market share. HMO basic service rates for singles have fallen 4.5% below the rates posted for the 1st qtr of 1994. Rates for families have fallen 4.8% below the HMO family rates in the 1st qtr of 1994. This market share drive has helped boost HMOs' share of the overall Philadelphia insurance market from 30% to 40% in 1994. Only market leader US Healthcare has decided to raise rates.

Health care industry, Philadelphia, Pennsylvania

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HMOs dominate, shape the market

Article Abstract:

Health maintenance organization (HMO) enrollment is expected to reach 65 million in the US in 1996, an increase of over 25% over enrollment of 50 million in 1995. As a result, competition among HMOs is expected to increase rather than competition between HMOs and higher-priced health care programs. HMOs are expected to try to obtain lower prices from providers because of the low premiums of these other health care programs.

Industry Overview

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HMOs bullish on Wall Street: megamerger of two public plans spurs new interest in stock offerings

Article Abstract:

The merger of WellPoint Health Networks and Health Systems International has sparked HMOs' interest in making stock offerings. Public HMOs' total market capitalization has increased more than 600%, from $6.5 billion to over $40 billion, since 1991, according to analyst Douglas Sherlock. He noted that the capital markets have responded favorably to new HMOs' financing needs.

Securities

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