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PacifiCare Seeks to License Senior Plan : Health: Partners are being sought among HMOs across the nation to adopt the Medicare-based Secure Horizons program.

August 27, 1993|CHRIS WOODYARD | TIMES STAFF WRITER

CYPRESS — PacifiCare Health Systems Inc. said Thursday that its Secure Horizons plan for senior citizens is such a success that it hopes to license the program to other HMOs across the nation.

The health maintenance organization has set up a new division, Secure Horizons USA, that will seek out partners to adopt the Medicare program that now has 280,000 members in California, Oklahoma, Oregon and Texas.

"There is high level of interest in the Medicare risk marketplace," said Craig Schub, president of the division. "It can be a very expensive proposition if you don't go about it the right way."

Senior citizens generally have far greater medical needs than the younger, healthier working adults and families that are highly sought by HMOs. Because seniors typically require more expensive treatment, some HMOs have been reluctant to start Medicare programs.

But PacifiCare and several other HMOs have aggressively gone after the seniors market, offering themselves as an alternative to the standard fee-for-service treatment of Medicare patients. Like HMOs in general, they sell themselves to seniors on the basis of better care and lower out-of-pocket costs. And they try to hold down costs with preventive medicine classes and regular checkups.

PacifiCare's new venture is not unique. Competitor FHP Inc. in Fountain Valley signed a similar licensing agreement last year with a Philadelphia-area HMO.

"I'm glad they liked our idea," FHP spokeswoman Ria Marie Carlson said Thursday. FHP's alliance with Greater Atlantic Health Service has been a success so far, she said.

FHP receives management and incentive fees from Greater Atlantic under the five-year agreement, she said, and has put one of its vice presidents on Greater Atlantic's staff to help with marketing and administration.

PacifiCare's Schub said he is looking for an HMO on the East Coast or elsewhere as an initial partner. That company would then be given the expertise it needs to launch the program.

Founded in 1985, Secure Horizons is the largest senior program in the states it serves and the fastest-growing in the past two years.

One analyst lauded the expansion as a potential benefit to both PacifiCare and senior citizens.

Margot Durow at the brokerage Baird, Patrick & Co. in New York said: "It's a very compelling situation for the consumer. It's very cost-effective."

PacifiCare has a "real good franchise" with Secure Horizons, which has become "more or less synonymous with Medicare in California," she said.

With HMOs expected to fare well under President Clinton's proposed health-care reforms, Durow said, PacifiCare's timing couldn't be better.

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