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HMO Competition Changes Care in Baja

MediExcel Health Plan grew out of a 22-story, comprehensive medical building in Tijuana’s Zona Rio area. The facility remains the heart of the California-licensed HMO. Photo courtesy of MediExcel Health Plan

Local employers looking to offer health benefits to workers living south of the U.S.-Mexico border are finding a new level of sophistication, as demand for low-cost, quality medicine has spawned new competition and distinct approaches to HMO care in Baja California.

The cross-border area’s dominant health-care provider, East Lake-based SIMNSA Health Plan, is working with San Diego’s Scripps Health to build a new, 100-bed hospital that would expand its medical offerings in Tijuana.

Meanwhile, Chula Vista-based MediExcel Health Plan, a newcomer to the HMO market whose parent company has for two decades operated an all-in-one hospital and medical building in Tijuana’s Zona Rio, is experiencing strong membership growth.

At the same time, major U.S. insurer Aetna is pulling out of the cross-border market. Its Vitalidad HMO, serviced by SIMNSA since the product’s introduction in 2010, is set to close Dec. 31 because of low enrollment.

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These recent developments don’t radically change what some see as a mature market for California-licensed HMO services in Baja, and they are not generally seen as making customers of many U.S. nationals — not yet, anyway.

Pricing Advantage

Anthony Llompart

But taken together, they represent a renewed push to serve San Diego-area companies that want to attract or retain Mexican workers by offering health plans at roughly one-third the price of comparable products in the United States.

Benefits consultant Todd Bennett, at Barney & Barney Insurance Services LLC in San Diego, said the new competition MediExcel represents is the most significant change he has noticed lately. Otherwise, the cross-border HMOs are simply additional options taking their place beside U.S.-focused health plans.

Many of Barney & Barney’s clients — especially hospitality companies, though others say the construction industry is also a big source of enrollees – make SIMNSA and MediExcel HMOs available to their workers, he said, adding that these employers tend to be satisfied with the results.

“Overwhelmingly the experience that members have is very positive,” said Bennett, a principal in the agency’s employee benefits division.

Competing for members

Competition between SIMNSA and MediExcel is, at this point, fairly lopsided. While MediExcel has grown from about 5,000 members in January to nearly 7,000, and counts more than 300 employer groups, SIMNSA’s HMO has more than 46,000 subscribers, with membership growth estimated at 12 percent to 15 percent yearly. SIMNSA’s enrollment figure does not include roughly 19,000 people it provides services to on behalf of other insurers such as Aetna.

The contrast between the two companies’ models of health care is almost as stark. MediExcel has service agreements with urgent care facilities, retail-based clinics and other medical providers north of the border, but in Mexico its services are concentrated in its 22-story Zona Rio building.

SIMNSA also contracts with urgent care and other providers in the United States, but its Mexican health care services are more geographically dispersed. It currently contracts with multiple hospitals south of the border.

SIMNSA Chief Operating Officer Christina Suggett, whose father is the company’s founder, president and CEO, Frank Carrillo, said the new hospital is not a response to competition from MediExcel. To her, it’s about better serving patients — Mexican and U.S. nationals alike.

“I don’t think that we see tremendous profiting from this facility that we’re going to build,” she said, adding that the facility’s first phase is scheduled to open in July. “I think it’s more for quality.”

The company originally launched an HMO-style product in 1993, but had to close it because of licensing concerns by California regulators. It reopened in 2000, fully licensed and aided by state legislative changes, and now employs about 350 people in Mexico, plus about 15 in its East Lake corporate office outside Chula Vista.

Suggett said SIMNSA welcomes competition, and she hopes MediExcel remains in the market. But she also said her company will have to “stay on our toes” and continue offering the kind of high-quality care the company has become known for.

Push to Expand

MediExcel used to be part of SIMNSA’s contracted medical network. Founded by a cardiovascular surgeon at Sharp Chula Vista Medical Center, Dr. José Hernandez, the company originally consisted almost entirely of the hospital building. The facility is still the center of the organization, offering 24-hour access and services ranging from pharmacy to primary care and open-heart surgery.

Anthony Llompart, the health plan’s director of sales and marketing, said the company has been actively signing contracts with health care providers on the U.S. side of the border. The goal is not only to serve Mexican nationals working in the United States but also to attract U.S. nationals in need of a low-price health plan.

“It’s becoming more and more of an attractive option and it’s not just for Mexican nationals,” Llompart said.

He views SIMNSA’s cooperation with Scripps on the hospital project as an attempt to match the comprehensive nature of MediExcel’s hospital building. Either way, he views the end result as good for both companies: investment in quality health care.

MediExcel is roughly the same size as SIMNSA by direct employment. It has more than 300 employees in Zona Rio and an additional 15 or so sales and billing staff in Chula Vista.

Llompart also downplayed any competition with more traditional U.S. insurers.

“We’re complementary. We’re another option in the benefits package,” he said. As long as health care remains expensive, he said, “it creates opportunity for us.”

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