Health care:
The 8-month-old agency plans to break even in its third year.
A Medicaid HMO created by the public Central Health hospital district lost $6.6 million in its first eight months, but officials say they still expect it to break even in its third year.
A Medicaid HMO created by the public Central Health hospital district lost $6.6 million in its first eight months, but officials say they still expect it to break even in its third year.
Sendero Health Plans’ average monthly membership as of November was 9,128 adults and children, fewer than its three better known competitors, according to documents filed with the Texas Health and Human Services Commission. But its membership is close to what the HMO’s creators predicted — and so are the losses, Sendero Presi- dent and CEO David Lamkin said. Those losses had been estimated to be $7.1 million, he said.
Lamkin presented the data, gleaned from a state report, to the Central Health board at its regular meeting Wednesday.
“It’s a good report,” Central Health President and CEO Patricia Young Brown said. “In the early years, you expect to have losses.”
The plan is a nonprofit, and “we’re not in it to make a profit,” Young Brown added. “We’re in it to provide coverage and continuity of care” to Medicaid patients.
The Central Health board has earmarked $33.9 million in taxpayer dollars to cover Sendero’s startup costs and reserves to satisfy state Department of Insurance requirements. Central Health officials have said they created the HMO to better manage health care services for their patients, increase their network of health care providers and leverage state dollars.
All but one of the privately owned Medicaid HMOs in Travis County lost money last year, the state report shows. Blue Cross Blue Shield had 14,431 members and lost $6.2 million during the same period compared with the Seton Health Plan, which enrolled 25,698 adults and children and lost $994,480, according to the state report.
The only moneymaker was the well-established Superior HMO, which reported enrollment of 114,775 and had a profit of $13.2 million.
Lamkin said that Sendero
has the least name recognition and is new, so he was pleased with the results. As a smaller plan, a few catastrophic illnesses can mean the difference between making money or losing it, he said. In the break-even third year, the plan is projected to double enrollment to 20,000.
The state sought HMOs to enroll its Medicaid patients as a way to save money in the health coverage program for the needy, elderly and disabled. As a result, the state has a vested interest in seeing that the plans are sustainable, Central Health spokeswoman Christie Garbe said.
Board member Clarke Heidrick said he hopes Sendero will at least break even, adding, “it’s not time to panic.”
State leaders have balked at expanding Medicaid — an expansion Sendero had hoped for. If Texas does not expand Medicaid, it will make Sendero’s financial health more challenging, Heidrick said.