| Abstract: | Rocky Mountain HMOs two-decade history of success on the western slope of Colorado is due not only to the conscious decisions of its managers but also to the geography and demography of its primary market area. The managers of Rocky Mountain HMO sought to build a managed care plan that was physician friendly and that had a local face, explicitly recognizing that their success hinged on the ability to satisfy the needs of both providers and purchasers. Isolated by the Rocky Mountains from major population centers of the state and located beyond the pull of the Salt Lake City, Utah, market to the west, Rocky Mountain HMO had no real managed care competitors on the western slope during its formative years. This lack of competition, combined with the ability to defuse physician resistance to managed care and to provide a satisfactory array of benefits at a reasonably low price, gave Rocky Mountain HMO an impressive share of the western slope health insurance market. Rocky Mountain HMOs expansion plans, in part, are a reaction to real and anticipated increases in managed care competition along the western slope. To maintain competitive premium rates, Rocky Mountain HMO executives perceive the need to spread the fixed costs of its infrastructure by increasing enrollment. As Rocky Mountain HMO expands its market to include all areas of the state, three issues relative to rural areas emerge. First, will Rocky Mountain HMO be able to import its successful rural HMO development strategies to other rural areas of the state at the same time it attempts to develop urban markets, or will rural expansion areas be treated in the same manner as urban expansion areas? Second, what are the consequences of the HMO's change in strategic focus for Rocky Mountain HMO providers and consumers on the western slope? Third, how will increased competition on the western slope affect Rocky Mountain HMO's relationship with its providers and consumers? |
