Quality of care in investor-owned vs not-for-profit HMOs

JAMA. 1999 Jul 14;282(2):159-63. doi: 10.1001/jama.282.2.159.


Context: The proportion of health maintenance organization (HMO) members enrolled in investor-owned plans has increased sharply, yet little is known about the quality of these plans compared with not-for-profit HMOs.

Objective: To compare quality-of-care measures for investor-owned and not-for-profit HMOs.

Design, setting, and participants: Analysis of the Health Plan Employer Data and Information Set (HEDIS) Version 3.0 from the National Committee for Quality Assurance's Quality Compass 1997, which included 1996 quality-of-care data for 329 HMO plans (248 investor-owned and 81 not-for-profit), representing 56% of the total HMO enrollment in the United States.

Main outcome measures: Rates for 14 HEDIS quality-of-care indicators.

Results: Compared with not-for-profit HMOs, investor-owned plans had lower rates for all 14 quality-of-care indicators. Among patients discharged from the hospital after myocardial infarction, 59.2% of members in investor-owned HMOs vs 70.6% in not-for-profit plans received a beta-blocker (P<.001); 35.1% of patients with diabetes mellitus in investor-owned plans vs 47.9% in not-for-profit plans had annual eye examinations (P<.001). Investor-owned plans had lower rates than not-for-profit plans of immunization (63.9% vs 72.3%; P<.001), mammography (69.4% vs 75.1%; P<.001), Papanicolaou tests (69.2% vs 77.1%; P<.001), and psychiatric hospitalization (70.5% vs 77.1%; P<.001). Quality scores were highest for staff- and group-model HMOs. In multivariate analyses, investor ownership was consistently associated with lower quality after controlling for model type, geographic region, and the method each HMO used to collect data.

Conclusions: Investor-owned HMOs deliver lower quality of care than not-for-profit plans.

Publication types

  • Comparative Study

MeSH terms

  • Health Facilities, Proprietary / standards
  • Health Maintenance Organizations / economics
  • Health Maintenance Organizations / organization & administration*
  • Health Maintenance Organizations / standards*
  • Multivariate Analysis
  • Organizations, Nonprofit / standards
  • Ownership / standards*
  • Preventive Health Services
  • Quality Indicators, Health Care
  • Quality of Health Care*
  • United States