ARCHIVED  November 1, 1995

HSI seeks approval for HMO

FORT COLLINS — HSI Health Plans Inc. plans to launch a health-maintenance organization for Northern Colorado and expects to have about 19,500 members of HealthLink HMO within three years.

“What we’re talking about is a locally owned, locally controlled, locally managed, locally operated HMO in Northern Colorado,´ said Chuck Mabry, president and chief executive officer of the Fort Collins-based insurance plan provider HSI.

Health-maintenance organizations sign up organizations and individuals for health-care coverage, then contract with providers such as hospitals, physicians and specialists for a discounted cost structure. HIS filed its intent with the Colorado Division of Insurance in June.

HealthLink would serve the Northern Colorado counties of Larimer, Weld, Morgan, Logan, Washington, Phillips and Yuma. Mabry envisions relationships with hospitals, medical centers, physicians groups and specialists throughout that territory.

A cadre of 216 primary-care physicians and 351 specialists work with HSI on its non-HMO products, and the nonprofit will strive to sign most of them for the HMO as well, Mabry said.

HSI serves the health-care needs of approximately 375,000 Northern Colorado residents. Mabry projects that 46.2 percent of the HMO’s membership would hail from Fort Collins and its environs, 19.8 percent from the Loveland area, 24 percent from Greeley and surrounding communities and 10 percent from the northeastern Colorado counties.

The application originally had assumed an initial enrollment date of Oct. 1, 1995, but officials at the Division of Insurance have not completed their review of the plan.

Frank Dino, chief actuary for the Division of Insurance, said he hopes to “bring it to closure soon.”

“We have either addressed or cleared up any of the issues that they’ve brought to our attention,” Mabry said.

Seventeen HMOs currently operate in Colorado, with two, including HSI, in the application stage. Dino said additionally applications are expected.

Charles Harms, administrator of McKee Medical Center in Loveland, said his facility has not yet signed a letter of intent or contract with HSI for its HMO. But the idea of a locally controlled HMO has merit, he said.

“There’s tremendous money flowing toward the big HMOs across the country,” he said.

With a community HMO, he added, the dollars “wouldn’t necessarily flow out to some group somewhere and to the shareholders.”

Keeping that money in the region would benefit the community, he said.

Harms said HMOs have contributed to the nation’s debate on rising health-care costs.

“I think HMOs fill an important void,” he said. “They’re causing change in the industry and making people think more about the costs of health care.”

HSI is overseen by a 12-person board consisting of leaders from Fort Collins, Greeley and Loveland. The nonprofit insures 20,000 members and does claims work for another 5,000 individuals who work for self-insured companies.

HSI is affiliated with Health Systems Management Inc., which incorporated in late 1994 to manage the business of HSI. HSM employs 55 workers, while HSI has no employees.

Founded in 1940, HSI arranges comprehensive health-care services for a fixed payment, using a network of physicians, hospitals and support services. The group recorded total assets of $7.4 million in 1993. Revenues dipped slightly in 1994 to $24 million from $24.1 million in 1993. Net income, however, rose to $804,068 from a net loss of $7,385 the previous year.

HSI is projecting that revenues will climb annually with the new HMO to $56.9 million in 1998.

Health Systems Management recently agreed to sell a controlling interest to Poudre Valley Health Care Inc., which runs Poudre Valley Hospital.

FORT COLLINS — HSI Health Plans Inc. plans to launch a health-maintenance organization for Northern Colorado and expects to have about 19,500 members of HealthLink HMO within three years.

“What we’re talking about is a locally owned, locally controlled, locally managed, locally operated HMO in Northern Colorado,´ said Chuck Mabry, president and chief executive officer of the Fort Collins-based insurance plan provider HSI.

Health-maintenance organizations sign up organizations and individuals for health-care coverage, then contract with providers such as hospitals, physicians and specialists for a discounted cost structure. HIS filed its intent with the Colorado Division of Insurance in June.

HealthLink would serve…

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