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Regence will pull HMO here Mail Tribune / Bob Pennell He�ll need new insurance: Physician�s assistant Katherine Sadzewicz examines 10-month-old Matthew Krull Monday in Medford. Matthew and his parents� health insurance comes from Regence HMO Oregon, which announced Monday it will terminate its HMO program in Jackson County. Company will still offer other health insurance By Bill Kettler The exodus from Southern Oregon�s health insurance market continued Monday when Regence HMO Oregon announced it would drop its HMO program in Jackson County. The decision ultimately could mean higher insurance premiums or reduced benefit packages for 13,000 local members of the HMO who will need to find new insurance when their current contracts expire. Regence officials said they would continue to offer other kinds of health insurance in Jackson County, but could no longer afford to lose money on the HMO plan. Providence Health Plan announced July 31 it would terminate health insurance for all of its 9,200 subscribers in Southern Oregon on Feb. 28, 2001. Regence will phase out its existing contracts over the next year. Subscribers who now have HMO coverage will have the option to choose from one of Regence�s other insurance plans or find a new insurance provider when their contracts expire. Health insurance still available Regence HMO Oregon�s decision to leave Jackson County means some 13,000 members will be looking for new health insurance over the coming year. Regence Blue Cross Blue Shield of Oregon and at least five other companies sell health insurance in Southern Oregon. Here are their telephone numbers and Web addresses: Health Net of Oregon 1-800-388-8335 www.healthnetoregon.com Lifewise, 1-800-777-1502, www.lifewisehealth.com ODS Health Plans, 1-800-578-1402, www.odshealthplans.com One Health Plan, 1-800-722-0087 www.onehealthplan.com PacificSource, 1-800-624-6052, www.pacific-source.com Regence Blue Cross Blue Shield of Oregon, 734-8968, www.bcbso.com Regence spokesman Ken Strobeck said the company lost "several" million dollars on its Jackson County HMO plan in 1999, but declined to quantify the losses more specifically. "The medical costs in Medford are higher than anywhere in the state on a member basis," he said. "We can�t charge enough ... to make it viable." Strobeck said Regence will continue to offer other insurance programs, including its Medicare HMO (Preferred Choice Sixty Five) and Regence Blue Cross Blue Shield Advantage program. Regence will continue to offer HMO coverage, along with all its other insurance programs, in Josephine County. "We, as a corporation, are committed to staying in Southern Oregon," said Les Cracraft, marketing manager for Regence�s Southern Oregon regional office. Strobeck said Regence�s costs-per-member in Jackson County exceeded the statewide average of $108 per month by 30 to 40 percent. He declined to disclose costs per member in Josephine County, except to say "they�re enough better than Jackson County to make it worthwhile to be there." Regence�s departure from the market came seven years after it first offered an HMO program in Jackson County. In the early 1990s, HMOs (health maintenance organizations) were hailed as a way to provide generous medical benefits at low cost. HMO subscribers are assigned a "primary care physician" who takes responsibility for most health problems. Patients have to visit their "PCP" before they can see a specialist for more serious problems. Strobeck said HMOs have worked best in big metropolitan areas where there is a large patient base and enough hospitals to form a competitive market. HMOs in smaller communities and rural areas often have seen costs increase rather than decrease. "In many communities, those who choose an HMO use it more," Cracraft said, "driving costs upward." Regence had earlier terminated its HMO program in most of Eastern Oregon as well as Douglas County and several coastal counties. Regence currently provides HMO coverage to several large employers, such as the Medford School District and Jackson County, as well as such smaller employers as the Medford-Jackson County Chamber of Commerce. The decision did not surprise Brad Hicks, executive director of the Medford chamber. "We�ve been seeing the handwriting on the wall," he said. "And the handwriting has been the rate increases." Hicks said the chamber faced a rate increase of 78 percent for health insurance for its eight employees and a 114 percent increase for drug coverage when its Regence policy came up for renewal this summer. The chamber found a different insurer. "My sense is most (insurance) carriers don�t want small groups," he said. While Southern Oregon health care officials generally agree costs are higher here, nobody seems to understand why. "We don�t get enough data (from the insurance companies) to make independent judgments about what�s happening," said Bob Doolen, vice president for administration and finance for Asante Health Systems Doolen said HMOs have struggled with similar problems in other regions, too. "This industry has a lot of really smart people trying to figure this out," he said. "We�re not coming up with many concrete solutions." "Many HMOs in Oregon never got to a size where they had a big enough risk pool," said Chuck Wright, chief executive for Providence Health Systems in Southern Oregon. Wright said HMOs work efficiently only when some people are denied certain levels of health care. "Americans have resisted being channeled into certain care patterns," he said. "The more they have the more they want." Reach reporter Bill Kettler at 776-4492, or e-mail [email protected] Obituaries | Sports | Business | Classifieds | Tempo | Prime Times | So Oregon Sites | Outdoor Journal | Subscribe | Contact | Movies | Advertise | Real Estate Showcase | Archive | Editorials | Letters to the editor | Religion | Wake-up Call | NIE | Cyber Chef | Job Network | So Oregon Weather | WSJ Northwest | Forums | AP Wire | AP Money | F.A.Q. | Awards Ottaway Newspapers, Inc. The Community Newspaper Subsidiary of Dow Jones & Co, Inc Copyright �The Mail Tribune 2000, Medford, Oregon USA