Survey Ranks PacifiCare and Health Net Best HMOs in State

In an unusual survey that asked doctor groups to voice their opinions about HMOs, PacifiCare and Health Net were rated the best health plans in California.

Aetna U.S. Healthcare and Blue Cross of California were rated the worst HMOs overall, according to the survey released Tuesday by the Pacific Business Group on Health, an influential health insurance-purchasing consortium.

Dismayed by their low rankings, Aetna and Blue Cross executives offered a second opinion of the medical group’s diagnosis.

“I don’t think these results reflect the consumers’ view,” said Tom Williams, manager of Aetna’s Western region.

The consortium also said it had negotiated an average 8.1% increase in medical premiums with 12 HMOs for 1999. The percentage would have been much lower, except for a steep rate hike granted to Kaiser Permanente, the group’s largest HMO in terms of membership.

Kaiser was seeking a double-digit rate hike, claiming special hardship after a disastrous 1997 that saw the giant HMO post a $270-million loss. The group did not disclose the exact percentage of Kaiser’s premium increase, except to say the HMO made several concessions in rates and other issues.

Excluding the Kaiser rate hike, the Pacific Business Group said its average rate hike was a more modest 3.8%. That increase is in line with state and national trends for medical costs.

“With the exception of Kaiser, we were satisfied,” said Paul Fearer, executive vice president of Union Bank of California, a member of the Pacific Business Group.

The survey ranked HMOs in eight categories, including efforts to improve medical quality and access to specialists, and capture crucial patient data. Rather than a broad survey of physicians, the group relied on a questionnaire completed by top administrators at 71 doctor groups in California.

The survey is part of an ongoing effort by the business group, which represents such employers as Bank of America, Chevron Corp., Pacific Bell and Stanford University, to pressure HMOs to improve the quality of patient care and services. For several years, the business group has also published results of satisfaction surveys of HMO members.

By releasing the surveys to the public, the group hopes to reward top-performing HMOs and give weak performers a powerful incentive to improve.

“Trying to figure out what’s happening in health care these days is like trying to piece together a jigsaw puzzle,” said Pat Powers, the business group’s executive director. The survey of doctor groups “adds another piece to the puzzle . . . and is a good indicator of the average physician’s experience.”

Some HMOs that fared poorly, while avoiding criticism of the powerful business group, took issue with the survey’s credibility.

The survey is “a work in progress,” said Dr. Michael Kaufman, Blue Cross of California’s chief medical officer. “It kind of reflects the attitudes of the people [medical administrators] who fill out the questionnaire. I’m not sure there is much internal validity there.”

Kaufman noted that although Blue Cross was ranked “the second-worst HMO to do business with,” it rated as one of the top plans in several areas. Moreover, Kaufman said Blue Cross recently received a full three-year accreditation from the National Committee for Quality Assurance, an influential HMO rating group.

The PBGH survey only listed the plans that were ranked the first or second best or worst in each category. It did not give a ranking for each of the California HMOs surveyed.

Kaiser was not included in the survey because Kaiser members are treated by a single medical group closely affiliated with the Kaiser HMO. Smaller HMOs were also excluded because of the relatively small number of doctor groups that serve their members.

The survey noted that while PacifiCare Health Systems and Health Net ranked high by many measures, the results do not reflect their recent mergers with two HMOs that rated poorly, FHP International and Foundation Health. PacifiCare recently merged with FHP, and Health Net combined with Foundation Health.

“Health Net and PacifiCare acquired plans that had very low ratings,” Powers noted. “We’ll have to wait and see how well they do next year.”

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A Checkup of HMOs

The best and worst HMOs in three categories, as ranked by California physician groups:

Access to specialists

Best: PacifiCare, Health Net*

Worst: Aetna U.S. Healthcare, Blue Cross/Cigna (tie)

*

Quality improvement

Best: Health Net, PacifiCare

Worst: Blue Cross/Cigna (tie), Aetna/Foundation Health* (tie)

*

Consumer education

Best: Health Net, PacifiCare

Worst: Aetna, Blue Cross

*Foundation Health recently merged with Health Net.

Source: Pacific Business Group on Health