Sierra still has plenty of room to grow

Wednesday, Oct. 28, 1998 | 12:14 p.m.

Sierra Health Services Inc. was able to absorb a major brand name in its acquisition of Mutual of Omaha's HMO business Tuesday.

And its acquisition of Kaiser Permanente's Southwest Division in Dallas-Fort Worth earlier this year solidified its Texas operation with the addition of 123,000 new members.

But the Las Vegas-based company that operates the Health Plan of Nevada HMO has plenty of room to grow, a company executive said.

"I don't have the exact statistics in front of me, but only about 20 or 21 percent of the people eligible are in an HMO in Clark County," said Jon Bunker, president of the western region of Sierra Health Services and Health Plan of Nevada. "And it's even lower for all of Nevada."

California, Arizona and Utah, meanwhile, are in the 30 percent to 40 percent range, he said.

"We must continue to do do a better job of educating people about the high level of service they get with an HMO," Bunker said.

Why do Nevada's neighbors have such a higher percentage of customers?

"We (Nevadans) tend to be independent thinkers," Bunker said. "We're used to having a direct personal relationship with a physician. Only lately have physicians had to join together in larger practices to make it financially lucrative and to spread the duty, so to speak."

Bunker said additional federal government scrutiny of his industry also tends keep the percentage of customers down.

"I'm sure that contributes to it," Bunker said. "Anytime a government has to come in and take a closer look at what an industry does, it gives the impression that it is not engaging in proper business practices. It makes consumers think the government has to come in and protect them."

Health care industry critics say HMOs tend to maximize profits over patient care. They charge, for example, that bureaucrats rather than doctors are making health care decisions.

Bunker said because Sierra operates the first -- and largest -- HMO in Nevada, it has to take a leadership role in explaining how the organizations work to increase care while keeping costs down.

He said his company has done a good job of minimizing costs, with increases of 4 to 5 percent following a year of virtually no increase.