Dr. Hasan helped to form Qual-Med, a tiny HMO with 7,000 members in southern
Colorado. He then started acquring other HMOs. As reported in George Anders'
book "Health Against Wealth," after acquiring an HMO, Hasan would install an
aggressive medical director with instructions to shrink the medical-loss ratio:
"If an obstetrician wanted to keep a new mother in the hospital for a second
or third day after delivery, Qual-Med directors would say no on the ground that
it wasn't medically necessary. If an orthopedist wanted to order a second MRI,
he was told no as well, on the same grounds."
Qual-Med goes public.
Health Net and Qual-Med merge into Health Systems International, creating a 1.8
million member HMO. "Hasan immediately introduced his own medical director and
took steps to reduce Health Net's medical-loss ratio." reports Anders.
Foundation Health is formed by the merger of Health Systems International (CEO
is Hasan) with Foundation Health Systems. The combined value of the two
companies is $1.27 billion making it the fourth largest managed care insurer in
the U.S. It covers about 5 million people in 17 states and is the second
largest HMO in California, with 2.8 million enrollees.
Dr. Malik Hasan announced his retirement from Foundation Health Systems
Inc., a company he built into the nation's fourth largest publicly-traded
health maintenance organization. In resigning at the age of 59, Hasaon
said, "With the size of the company, for the last year, I was not having
much fun." Hasan said he would concentrate on three other companies in
which he's invested, all of which are in the health care and information
technology area. Hasan also said that it's not likely he will retire
completely from the managed care industry.
Read Foundation Health Systems Inc.'s 1997 fourth quarter and
Year End financial report