Recent Developments in the Medical Insurance Industry

This will attach the arguing for business and reward those treatment options which atomic number 18 the most apostrophize effective. In addition, integ sum upd delivery networks are likely to come forward from this trend. Other physicians may be forced to move their practices to much lucrative markets, or to a different location deep down their own network.

There is in any case likely to be an increase in the number of hospital closures, which causes concern in the contiguous community, but which makes sense given the low use rate and the technological advances that are being made in the attention.

As the product enters a more mature phase of its disembodied spirit cycle, pricing will also become a line factor, and some companies are likely to continue the consolidation which has marked much of the industry during the early 1990s; Humana's encyclopaedism of Emphesys is certainly in reenforcementing with this strategy (Lewis, 1995, p. 669).

Health tending organizations also stand to benefit from the current legislative climate in which Congress has dictated that Medicare will reimburse a hygienicness alimony organization 95 percent of average per capita Medicare personify in a given area. This is strong incentive for health maintenance organizations to court outstanding employers, and employers are able to keep their costs down since the current climate essentially subsidizes function offered by the health maintenance organization on a regional or national basis (Novack, 1995, p. 50).

As companies evaluate the legislative and competitive environment, they are searching for shipway to expand their market share and ways to enter markets in which they do not currently participate. Humana has a strong background in growth through acquisition (as to other managed care programs), and it is continuing that strategy as the industry regroups for the health care reform that is certain to accompany a balanced budget.

Overall commercial premiums grew by 23.1 percent recently, helped by 13 percent increases in same plan enrolment and the addition of CareNetwork in Milwaukee. Commercial membership of 1.

703 million grew by 53,000 in recent months. Medicare enrollment rose by 5.5 percent and now stands at 295,400. Administrative-services only coverage (where Humana receives a tiptoe for processing claims), have also been up recent.

In 1993, the fiscal Accounting Standards Board issued a new guideline which requires companies to record the cost of post-retirement medical examination benefits as they are earned by workers. In response to this, a number of employers began to require than futurity and even current retirees pay more of their own medical premiums. In 1994, the number of large employers who offered retired employees health maintenance organizations as an option for their medical services surged from 7 percent to 17 percent (Novack, 1995, p. 49).

The changes in the environment in which health maintenance organizations operate makes this an industry which offers tremendous challenge as well as significant risk to its participants. Local health maintenance organizations are increasingly becoming acquisition victims by large organizations seeking a regional or national presence, and health care reform in one form or another is certain to have longterm ramifications for the industry.

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