Mid Atlantic Medical posts 3rd straight losing quarter Costs are rising, but premiums aren't

February 28, 1997|By M. William Salganik | M. William Salganik,SUN STAFF

Mid Atlantic Medical Services Inc. announced yesterday its third straight losing quarter, with a $6 million loss in the quarter ending Dec. 31, and a loss for the year of $4.9 million. The Rockville-based managed-care company found itself caught between static premiums in a time of tough price competition and rising medical costs.

Revenue per member per month was $126.62 for the quarter, virtually unchanged from $126.32 in the corresponding quarter in 1995. And the medical loss ratio -- care costs as a percentage of income -- rose to 93.9 percent for the quarter, compared with 82.7 percent in the last quarter of 1995.

The loss was equivalent to 7 cents a share for the quarter and 6 cents a share for the year, compared with an average expectation of a 3-cents-a-share loss for the year, based on a survey of 15 analysts by I/B/E/S International.

In 1995, MAMSI showed profits of $23.8 million for the fourth quarter and $96.3 million for the year.

The company announced yesterday that it does not plan to offer any stock options to senior management during 1997.

George T. Jochum, chairman, president and chief executive officer, said he believed MAMSI had taken actions during 1996 that would improve profitability in 1997, including premium increases averaging more than 5 percent. The company also PTC dropped its Medicaid participation in Maryland and Virginia, and cut back Medicare HMO programs in counties where it felt federal reimbursements were too low.

Revenue for 1996 was $1.1 billion, up 18.7 percent from $955 million in 1995. Membership was flat for the quarter but up 13.2 percent over a year earlier. With total membership, including Medicare and Medicaid beneficiaries, of 1.679 million, MAMSI is the largest managed-care company based in Maryland.

The results were released after the stock market closed yesterday. MAMSI shares gained 25 cents to finish at $14.50.

Pub Date: 2/28/97

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