Trusting in the Future: The Distinct Advantage of Nonprofit HMOs

Abstract

H e a l t h c a r e t h a t i s s t r u c t u r e d t o a c c o m m o -date the sensitivities and demands of human biology will look different from health care that is organized to meet the requirements of stockholders and quarterly profits. Structure implies function in the corporate environment as decidedly as it does in the natural world. A health plan constructed for financial profit measures success quarterly. A health plan created to accommodate the needs of human biology, on the other hand, adopts the perspective of a life span; its success is best expressed in health outcomes and quality of life. Members ought to be able to trust that their HMO is primarily focusing on their health. Yet advocates of nonprofit HMOs have not succeeded in calling attention to their differences from for-profit organizations. Most surveys indicate that people do not understand or care about the distinction. One reason is that the not-for profits have done little to translate the relationship of trust that they have established with their members into market advantage, preferring instead to maintain an ivory-tower existence and to refrain from arguing the merits of their status.Nevertheless, the achievements of managed care in improving the health status of communities can be traced directly to the not-for-

Responses of HMO Medical Directors to Trust Building in Managed Care

“…The literature on HMOs reflects the prominent debate about whether the investment in community health and patient welfare by the forprofit and national chains matches those of the nonprofit and more locally situated organizations (Lawrence, Mattingly, and Ludden 1997;Kuttner 1998;Kleinke 1998;Gray 1997). It is alleged that the primary loyalty of the national, profit-making firms is to their stockholders rather than to their communities and enrollees.…”

Socioeconomic Differences in Use of Low‐Value Cancer Screenings and Distributional Effects in Medicare

“…). We controlled for the percentage of the Medicare population in managed care to capture spill‐over effects of managed care on Medicare FFS: beneficiaries in areas with higher managed care penetration are likely to use more preventive care (Lawrence, Mattingly, and Ludden ; Greene, Blustein, and Laflamme ; Chernew and Baicker ).…”

“…We used physician capacity, which is measured by primary care physician availability per 100,000 people, as greater supply of physicians is associated with higher rates of cancer screenings (Ferrante et al 2000;Roetzheim et al 2001). We controlled for the percentage of the Medicare population in managed care to capture spill-over effects of managed care on Medicare FFS: beneficiaries in areas with higher managed care penetration are likely to use more preventive care (Lawrence, Mattingly, and Ludden 1997;Greene, Blustein, and Laflamme 2001;Chernew and Baicker 2010).…”

Profit‐Seeking, Corporate Control, and the Trustworthiness of Health Care Organizations: Assessments of Health Plan Performance by Their Affiliated Physicians

“…But this approach has been largely ignored, at a time when state and federal officials have adopted literally hundreds of regulations designed to make medical care more trustworthy (Miller 1998;Sloan and Hall 2002). Indeed, while proponents of the nonprofit sector plaintively repeat their promises of trustworthy performance (Lawrence, Mattingly, and Ludden 1997;Kuttner 1998Kuttner , 1996aWoolhandler et al 2003), most policymakers have turned their backs while investor ownership has spread among a number of health services previously provided under nonprofit auspices (Gray and Schlesinger 2002).…”