Health Plan's Losing Streak May Be Over

Newly Independent Columbia Medical May Use Profits To Expand

December 30, 1991|By Lorraine Mirabella | Lorraine Mirabella,Staff writer

In 1969, James E. Jordan joined four other doctors to introduce the state's first prepaid medical plan, formed to care for residents of James Rouse's new planned community in Howard County.

Jordan, now president of the Columbia Medical Plan, recalls that the concept was foreign to most Marylanders in those days.

Since then, the plan has expanded to Anne Arundel County. The number of patients served at the Annapolis regional center and three satellites has jumped from 500 in 1984 to about 24,000, and the total served plan-wide has increased from 19,000 in 1980 to 72,000.

Despite the steady stream of new patients, Columbia Medical has lost millions of dollars each year.

But after six months under new managementby the group of doctors the original plan owners hired 22 years ago,Columbia Medical has reversed its money-losing trend, officials reported last week.

The plan turned a profit in September, October andNovember, opening up new possibilities, such as eventually expandingsatellite offices and slowing the rate of premium increases, Jordan said.

"When you're making money, you can find internal grants for physicians to do research," said Jordan, a gynecologist.

The financial problems go back almost as far as the plan itself.

Johns Hopkins Hospital and the Connecticut General insurance company formed theplan during the Columbia community's early development, hiring the first five physicians, including Jordan, in October 1969. When Hopkinspulled out of the plan five years later, the doctors who remained formed Patuxent Medical Group to care for the Columbia Medical Plan's patients.

At first, the plan lost money because income failed to keep up with the rate of medical inflation, Jordan said.

In 1986, the doctors sold Patuxent Medical to Columbia, which had become a subsidiary of Blue Cross Blue Shield of Maryland in 1980. The sale meant that the doctors worked solely for Columbia Medical.

Around the same time, Blue Cross combined Columbia Medical with FreeState Health Plan, a Baltimore-based health maintenance organization. The merger formed Columbia-FreeState.

But the two plans turned out to be far from compatible, Jordan said, causing administrative costs to skyrocket.

Last June, the financial problems began to turn around.

At that time, the former Columbia Medical split from FreeState. Blue Cross officials decided instead to merge FreeState with CareFirst, a 100,000-member HMO it bought earlier this year, and form a new HMO next year.

As part of the separation agreement, the doctors in Patuxent took over the newly independent Columbia Medical Plan.

"We'd been there for 22 years, but this gave us the opportunity to run the plan," Jordan said. "Our goal was by the end of seven months to be profitable. We've been fortunate enough to do it."

All the restructuring has confused a lot of patients, said Liz Ziemski, Blue Cross spokeswoman.

She stressed that patients won't find any changes in actual medical care or increased premiums under the independent Columbia Medical Plan.

"The (FreeState-CareFirst) merger won't have any affect onthe Columbia Medical Plan, whether it's in Annapolis or Columbia," Ziemski said. "Columbia Medical Plan members don't need to worry aboutwhat is happening."

Patients will continue seeing their doctors at the same sites, which include the Admiral Cochran Drive regional center and three satellites, in Crofton, Old Mill and Lake Shore, Ziemski said. The plan offers internal medicine, family practice, gastroenterology, dermatology, ophthalmology, cardiology, pediatrics, obstetrics/gynecology, radiology and lab and pharmacy services.

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.