WHERE HMO $ GOES

September 16, 2008
Michael Sheehan

Physician's Money Digest, July15 2003, Volume 10, Issue 13

A recent Zogby Poll shows thatHMO members are way off whenthey estimate how HMOs spendtheir premium money. The surveyindicates that members think theHMOs spend less than half of theirincome on health care and that theykeep almost one fourth of the premiumas profit. The real breakdown is90% for health care, 2.5% for profit,and the rest for administrativeexpenses. The survey respondentsalso guessed that hospitals receivedonly 30% of the money spent onhealth care, when in reality 42 centsof every HMO dollar spent on healthcare goes to hospitals. The estimateof the payout to doctors, on the otherhand, was pretty close—physiciansreceive 34% of HMO health caredollars, compared with the 33% estimatedby survey respondents.