FHP International Will Extend Service Into San Diego County : Health care: HMO plans a $1-million marketing campaign aimed at businesses. It is seeking approval of a later offer of its programs to Medicare recipients.

In a bid to expand its already large Southern California membership base, FHP International Corp. said Tuesday that it will soon expand its health maintenance organization network into San Diego County.

Clemens Scharwath, FHP’s newly appointed regional vice president for San Diego, said the company hopes to begin marketing its prepaid health plans in the county later this month. The membership drive will be kicked off by a $1-million marketing campaign in the local media.

FHP initially will market its health plans only to businesses in the San Diego area. But the company is awaiting approval from the federal Health Care Financing Administration to offer its programs for Medicare recipients in the county also.

“We expect to get at least 40,000 new members, both senior and commercial, within two years,” Scharwath said.

FHP now has 560,000 members, including 300,000 in Southern California. FHP’s members are concentrated in Los Angeles and Orange counties, but the company has recently expanded into Riverside and San Bernardino counties.

The company’s entry into San Diego follows two years of planning and efforts to gain approval from the state, Scharwath said.

The timing is important, he said, because it coincides with the three-month period during which most corporations offer employees the opportunity to switch medical insurance plans.

Breaking into San Diego won’t be easy for FHP, which will have to compete with numerous other HMOs that “have pretty much saturated the marketplace,” said Michael Wilson, a Los Angeles medical benefits consultant. “The question will not be getting new enrollment, but who do you get it from.”

Among the HMOs already established in San Diego are Kaiser Permanente, by far the largest with 375,000 members, followed by Health Net with 100,000 members, Pacificare Health Systems Inc. with 70,000 and Aetna Choice Health Care Plan with 62,000 members.

“There aren’t any weaklings there,” Scharwath said, acknowledging that FHP will face stiff competition. He noted that 32% of San Diego employees are already enrolled in an HMO.

Scharwath said FHP’s move into San Diego is prompted by its corporate customers in Los Angeles and Orange counties who want to offer the same health plan to their employees in San Diego. Scharwath is a former associate vice president of marketing for FHP in California.

To prepare for the move to San Diego, FHP has been quietly contracting with about 200 physicians and eight hospitals in San Diego that have agreed to serve any new members it enrolls, Scharwath said.

In Orange County most FHP members receive medical treatment from FHP physicians, but all care under FHP’s plans in San Diego will be provided by independent physicians, Scharwath said.