Madison Teachers Inc. and five other Madison-based unions are so concerned about significant financial losses at Group Health Cooperative of South Central Wisconsin, they’re urging members to vote for particular candidates in Group Health’s board election Thursday.
“MTI cannot stand idly by and watch GHC disappear,” John Matthews, the teacher union’s executive director, wrote in a letter last month to members.
Group Health lost $18.7 million last year after losing $15.7 million in 2013 and $5.5 million in 2012, according to financial statements filed with the National Association of Insurance Commissioners.
Kevin Hayden, Group Health’s CEO, is on leave for reasons the HMO won’t explain.
Group Health made $364,000 the first quarter of this year and expects a “substantial improvement over 2014,” a statement by board president Ken Machtan said.
The losses were covered by “substantial reserves so no debt was accumulated,” Machtan said. Group Health “continues to maintain a healthy reserve,” he said.
Meanwhile, Physicians Plus, which lost an average of $19.1 million a year from 2011 to 2013, made $2.8 million last year.
Dean Health Plan gained $183,000 last year after making $32 million in 2013, an unusual gain related to spinning off a subsidiary. Unity Health Plans made $4.7 million last year after losing $694,000 the year before.
The four HMOs insure most people in Dane County and many in surrounding counties.
Letters sent April 24 by Madison Teachers Inc. and the other unions expressed concern about Group Health’s viability and said it appears the HMO will lose another $17 million this year.
The letters said Group Health recently hired 14 doctors plus other staff, and “erroneously thought they could sell sufficient new members to offset the cost of the hiring.”
The letters urged members to vote for three of 11 candidates running for Group Health’s board: Ann Hoyt, a UW-Madison emeritus professor who is an expert on cooperatives; Bill Oemichen, president and CEO of the Cooperative Network; and Judy Ziewacz, a consultant on home care cooperatives and senior housing.
Another letter from Matthews Thursday referred to “talk” that Group Health “was selling its health insurance component to Unity.”
The other unions are AFSCME Local 6000, Building and Construction Trades Council of South Central Wisconsin, International Brotherhood of Electrical Workers AFL-CIO Local 2304, Fire Fighters Local 311 and Madison Professional Police Officers Association.
About 2,015 members of Madison Teachers Inc. and roughly 900 members of the other unions have Group Health insurance, Matthews said.
They and their family members are among about 82,000 people with Group Health.
Machtan said the unions’ claim of a $17 million loss this year “was not verified and misrepresented our projections for improvements.”
He said “significant investments” have been made to the organization, which had 10 percent growth in membership over the past two years.
“There are no discussions nor plans concerning selling (Group Health) to Unity,” he said.
Machtan wouldn’t say why Hayden is on leave, when the leave started or when Hayden might return. “We respect his privacy so will not comment further,” Machtan said.
Physicians Plus was sold to Iowa-based UnityPoint Health last year as part of an affiliation between Meriter Health Services and UnityPoint.
In 2013, Physicians Plus implemented “care navigation,” steering some patients to Meriter instead of UW Health.
The move led to a drop in membership, but administrators said it would help in the long run by keeping more business within the Meriter system.
Physicians Plus ended care navigation last year after signing a new contract with UW Health that had “more reasonable rates between the organizations,” a Meriter memo said.
Physicians Plus restored members’ full access to UW Health this year.
The HMO had 62,000 members at the end of last year, down from 74,000 a year before and 113,000 five years ago.
Physicians Plus forecasts a profit this year and has gained 2,000 members since Jan. 1, spokesman Scott Shoemaker said.
Despite the overall membership decline, “the departure of poor-performing groups positively impacted our financial picture,” Shoemaker said.
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