These products include enrollees from all federal and state public programs. Most of the growth in enrollment during 1996 was in Greater Minnesota. Since 1992, HMO expenditures have grown at a faster pace than their revenues. Total expenditures include hospital and medical costs, salaries, taxes, fees, assessments, and administrative costs. The greatest rate of increase was in outpatient costs, while administrative expenditures have been stable.
Net income is another way of explaining the revenue and expenditures relationship.
Net income is the amount of income remaining after total expenses have been subtracted from total revenue. Competition between health plans may have contributed to this loss, if premium prices were held down to gain a larger share of the health care market. This could cause further disturbance in the health care market if premiums are increased drastically or benefits are reduced, resulting in enrollees shifting to plans with lower premiums or benefits that have not been reduced. The figures below show premium revenue PMPM and total expenditures PMPM for the three largest HMOs and UCare, which has only public plan enrollees. If the data are not corrected for these factors, health plan performance may not be assessed correctly.