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February 2, 2000

Quality of Health Care and the HMO Marketplace

Author Affiliations

Phil B.FontanarosaMD, Deputy EditorIndividualAuthorStephen J.LurieMD, PhD, Fishbein FellowIndividualAuthor

JAMA. 2000;283(5):602-605. doi:10.1001/jama.283.5.601

To the Editor: Leaving aside the admitted "serious shortcomings" of the HEDIS quality indicators used in the study by Dr Himmelstein and colleagues,1 some of the reported differences between investor-owned and so-called not-for-profit HMOs appear modest—while statistically significant these differences may not be meaningful or useful for setting policy. The author's example of mammography rates to buttress their argument is particularly unfortunate: the clinical usefulness of mammography has been widely questioned.1 Similar doubts have also been long expressed concerning Pap tests. We question the estimate of lives likely to be saved given the known unreliability of these tests and controversy concerning their predictive value.

Rather than focus on the magnitude and meaningfulness of differences between quality of care in these 2 types of HMOs, we wonder if there is, in fact, a tenable distinction between for-profit and not-for-profit facilities.

Like others,2 we suggest that the debate between the advocates of for-profit and not-for-profit medical care represents an outdated dichotomy. Advocates of not-for-profit care embrace a simple world view—they possess superior values (community service), blame current health care crises on the emerging market-based system, and romantically dream of the good old days (precorporatized health care) or some other idealized health care system. Those favoring for-profit arrangements naively believe the market's invisible hand will eventually fix everything—their values appear crass (wealth accumulation), and they would discontinue or shift responsibility for unprofitable activities (eg, care of the disadvantaged). In a drive for efficiency, profit-driven management encroaches on professional autonomy and undermines the patient-physician relationship. Both sides appear to suffer from hardening of the categories.

While there are some differences between these 2 organizational approaches—in tax status, ownership, and (possibly) community orientation—there may be no analytically useful distinction. Both "produce" the same commodity (health care) in pretty much the same way (managerial and accounting procedures) but simply give a different term to the revenue yield—one calls it "profit," the other "surplus." Apart from superficial differences, the means by which profit or surplus is obtained appear the same. The categories, for profit and not for profit, are too crude to be operationally useful. Some not-for-profit organizations control and are dependent on for-profit subsidiaries. Not-for-profit surpluses might not be invested for the benefit of the surrounding community, whose local taxes subsidize the not-for-profit organization. If most "profits" go to stockholders and infrastructure expansion, while "surpluses" go to already well-rewarded administrators, new buildings, and equipment, this makes for an analytically questionable distinction. Some for-profits (like family-owned businesses) evidence a humanistic concern for the welfare of workers.

Vulgar Marxist dichotomies (like profit vs not for profit) have limited explanatory use for market encroachments on US health care. There are few real not-for-profit organizations in existence in the United States. Rather than blindly accepting a questionable dichotomy and building an analysis on it, perhaps the reasons for the dichotomy itself and its continuing existence would be a profitable area for future study.

Himmelstein  DUWoolhandler  SHellander  IWolfe  SM Quality of care in investor-owned vs not-for-profit HMOs.  JAMA. 1999;282:159-163.Google Scholar
Hassan  MM Let's end the nonprofit charade.  N Engl J Med. 1996;334:1055-1057.Google Scholar