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Sick People Enrolled in For-Profit HMOs Less Satisfied With Health Care

New England Journal of Medicine Study Highlights Differences in People's Perceptions of Care in For-Profit and Nonprofit HMOs

News Releases
April 25, 2002

FURTHER INFORMATION, CONTACT:
Alwyn Cassil: (202) 264-3484

ASHINGTON, D.C.—Sick people enrolled in for-profit health maintenance organizations (HMOs) were less satisfied with their care, had higher out-of-pocket costs and rated their interactions with physicians lower than similar people in nonprofit HMOs, according to a study by Center for Studying Health System Change (HSC) researchers published in the April 25 New England Journal of Medicine.

Among people who reported themselves to be in fair or poor health, 55.3 percent in for-profit plans said they were very satisfied with their care compared with 65.7 percent in nonprofit plans. Sick people in for-profit plans reported spending an average of $731 a year in out-of-pocket health costs compared with $507 for those in nonprofit plans. Sick enrollees in for-profit plans also rated their physician interactions lower than people in nonprofit plans on three aspects of physician visits examined in the study: thoroughness, explanation and listening.

HMO profit-status made less of a difference among all enrollees’ perceptions of their care, but there were still statistically significant differences in two areas. Among all enrollees, people in for-profit plans were less likely to be very satisfied with their overall care than people in nonprofit plans—58.1 percent vs. 64 percent, and they reported higher out-of-pocket costs than those in nonprofit plans—$498 vs. $440 annually.

"Examining sick people’s perceptions of their care is important because they are more likely to have frequent interactions with the health care system and are more vulnerable if care is inadequate," said Ha T. Tu, M.P.A., the study’s lead author and a health researcher at HSC, a nonpartisan policy research organization funded exclusively by The Robert Wood Johnson Foundation.

The study also examined differences between sick and healthy enrollees in for-profit and nonprofit HMOs and point-of-service (POS) health plans, including people’s trust in their physicians. Sick enrollees in for-profit plans were less likely than healthy enrollees in for-profit plans to believe their physicians would put their medical needs first—58.7 percent to 64.2 percent. Interestingly, in nonprofit plans, the opposite was true: sick enrollees had greater trust that their physicians would put their medical needs first than healthy enrollees—67.7 percent vs. 60.7 percent.

"That sick people in nonprofit plans have greater trust in their physicians than healthy people is striking and suggests that the plan’s profit status has some bearing on the quality of the patient-physician relationship, especially for sick enrollees," Tu said.

Sick enrollees in for-profit plans also reported having more unmet medical needs or delayed care than healthy people—17.4 percent vs. 13.1 percent—and facing more administrative barriers to care—12.9 percent vs. 9 percent. Likewise, sick enrollees in for-profit plans reported higher out-of-pocket costs than healthy people—$731 on average annually compared with $480 for healthy people.

In contrast, no such differences were found between sick and healthy enrollees in nonprofit plans.

The study by Tu and HSC Senior Health Researcher James D. Reschovsky, Ph.D., accounted for the age, sex, income and other characteristics of health plan enrollees and numerous plan characteristics, including years in operation and HMO type, such as group/staff or network model.

Because the study relied on consumers’ perceptions of their care, Tu cautioned that it is not possible to determine whether sick people enrolled in for-profit HMOs actually received poorer quality care.

Additional research using objective clinical measures rather than patient perceptions of care would be needed to determine whether actual differences in the quality of care exist between for-profit and nonprofit plans, Tu said.

The study included a nationally representative sample of 13,271 privately insured people under age 65 enrolled in both for-profit and nonprofit HMOs and POS health plans drawn from the 1996-97 Community Tracking Study.

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The Center for Studying Health System Change is a nonpartisan policy research organization committed to providing objective and timely research on the nation’s changing health system to help inform policy makers and contribute to better health care policy. HSC, based in Washington, D.C., is funded by The Robert Wood Johnson Foundation and affiliated with Mathematica Policy Research, Inc.

 

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