Hopkins HMO to be bought by Prudential Hopkins will still provide medical care

February 22, 1991|By Ross Hetrick | Ross Hetrick,Evening Sun StaffJohns Hopkins Health System and Prudential Insurance Co.

After using its famous name to sell its health maintenance organization since 1984, the Johns Hopkins Health System will be swapping its hospital dome logo for the Rock of Gibraltar.

Hopkins will sell its profitable HMO to Prudential Insurance Co., the nation's largest commercial health insurer, for an undisclosed amount. But Hopkins will continue to provide medical care to the HMO's members.

Hopkins officials yesterday said it will take about three months to get regulatory approval for the sale. Then the HMO will change its name from the Johns Hopkins Health Plan to the Prudential Health Care Plan Inc., which trades as PruCare.

When it drops the Hopkins name, the HMO no longer will be able to use its slogan: "Your good health deserves our good name."

But Hopkins officials say they welcome the Rock of Gibraltar, the corporate symbol for Prudential.

"We think Prudential means a lot," said Barbara B. Hill, president of the Hopkins HMO. "We are partnering up to a high-quality name."

Hopkins has a 10-year agreement with Prudential to continue providing medical care to the HMO's 115,000 members. There should be no layoffs or changes in service to HMO members, Hopkins officials said.

The HMO has 80 locations in Maryland with 2,000 participating physicians. It had revenues of $95 million in the fiscal year that ended June 30.

Dr. Robert M. Heyssel, president of the health system and Hopkins Hospital, said the HMO is being sold because today's employers are requiring more insurance options from a single provider.

"If the world looked today as it did in 1985, we wouldn't even look at this," he said. He also noted a nationwide trend toward consolidation of HMO's.

Under the new arrangement, Prudential will be responsible for all the HMO's insurance functions, while Hopkins will coordinate medical service.

"Each will be doing what we do best," Heyssel said. "The only change will be in the name," he said.

The HMO has been profitable for the past two fiscal years and is expected to be profitable this year, Heyssel said. In fiscal 1990, the HMO earned $2.5 million.

About 25,000 of the members of the John Hopkins HMO have their care paid for by Medicaid, the government medical program for low-income people. That service will continue under Prudential.

Prudential, a mutual company based in Newark, N.J., is the nation's largest carrier, offering all varieties of insurance, a spokeswoman said. The company also offers extensive financial services through various subsidiaries, including Prudential Securities Inc..

The new operation will absorb Prudential's small, existing HMO operation in Maryland, Washington and Northern Virginia, which has 1,800 members, said Dennis R. Walsh, vice president in charge of Central Atlantic Group Operations for Prudential.

The company also has a managed-care health plan in the Baltimore-Washington area called Prudential Plus that has about members. In this plan, members can choose from a variety of doctors who are part of a network put together by Prudential.

Nationally, Prudential provides health insurance to 20 million people. In health insurance, it is second only to the nonprofit Blue Cross and Blue Shield system, Walsh said.

The Hopkins HMO had its origins in the East Baltimore Medical Plan, an early HMO set up in the late 1960s by the East Baltimore Community Corp. Hopkins assumed control of that operation in 1984. Since then, its membership has grown from 5,000 to 115,000.

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.