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Executive Summary

HMOs USING MAIL ORDER PHARMACY SERVICES DECLINED in percentage figures in 1989, according to figures from the Marion Managed Care Digest survey of 393 HMO programs. The Marion Digest found that 16% of HMOs surveyed used mail order services at the end of 1988 compared to only 8% at the end of 1989. Because of differences in the numbers of HMOs answering questions about mail order use between 1988 and 1989, the actual number of plans using mail services are almost the same in the Marion data: 16 HMOs in 1988 and 20 HMOs in 1989. The 16 mail service users in 1988 were from 100 responding HMOs. The 20 in 1989 were out of 250 responders. The data from the Marion report were collected by the SMG Marketing Group of Chicago. Mail order services were most popular among group-model HMO plans, which contract with independent, multispecialty physician group practices. Among the group plans surveyed for the Marion report, 13% used mail services at the end of 1989. The decline in popularity of mail service programs was most evident in network HMOs surveyed for the report. Network HMOs are operations that contract with two or more large physician group practices for medical service. One quarter of the network HMOs in the Marion survey in 1988 reported using mail service; that figure dropped to 7% in the 1989 survey. The data for the Marion report was compiled by the SMG Marketing Group of Chicago. The Marion report also discerned a shift toward alliances with drug chains during 1989. Over 80% of the HMOs surveyed said they had contracts with chain drug stores for pharmacy services last year compared to 74% the year before. Those contracting with independent pharmacies represented 60% of the sample in 1989 compared to 80% in 1988. Twenty percent of the HMOs in the survey had in-house pharmacies in 1989 compared to 16% in 1988. The biggest users of in-house pharmacies are the staff-model HMOs (76%) and the group model HMOs (53%). Only 3% of IPA model HMOs, which are the largest factor in the market with enrollment of almost 15 mil. patients, use in-house pharmacies.

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