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Assessments of Medical Care by Enrollees in For-Profit and Nonprofit Health Maintenance Organizations

April 25, 2002
New England Journal of Medicine, Vol. 346, No. 17
Ha T. Tu, James D. Reschovsky


It is uncertain how assessments of medical care differ between enrollees in for-profit and nonprofit health maintenance organizations (HMOs). The study analyzed the relation between the profit status of HMOs and enrollees’ assessments of their care. The study used data from two national surveys from the Community Tracking Study: the Household Survey, 1996-97, and the Insurance Followback Survey, 1997-98. The final sample included 13,271 people under age 65 (10,654 adults and 2,617 children) with employer-sponsored insurance who obtained health care through an HMO. A total of 12,445 enrollees who reported their health as excellent, very good or good were considered to be healthy; 826 with self-reported fair or poor health were considered to be sick.

In the sample of privately insured HMO enrollees as a whole, few differences were found between for-profit and nonprofit HMOs. For-profit HMO enrollees pay 13 percent more for care out-of-pocket and are 10 percent less likely to be very satisfied with their care, but on other key dimensions (e.g., overall barriers to care, trust in physicians), nonprofits and for-profits receive comparable ratings. Among sick enrollees, the for-profit/nonprofit gap in out-of-pocket costs and satisfaction grow larger to 40 percent and 18 percent, respectively. In addition, sick enrollees in for-profit HMOs enrollees rate their physicians lower on all three aspects of physician visits that were surveyed: thoroughness, explanation and listening.

In for-profit plans, sick enrollees report more barriers to care, higher out-of-pocket spending, lower ratings of physician listening, and lower trust in physicians to put their medical needs first, as compared to healthy enrollees. In contrast, nonprofit plans show no such deterioration in assessments by sick enrollees relative to healthy enrollees. In fact, sick enrollees of nonprofit plans express greater trust than healthy enrollees that their physicians will put their medical needs first.

The findings indicate a divergence between nonprofit and for-profit HMOs in their sick enrollees’ perceptions of medical care. For-profit HMO enrollees in poor health appear to perceive that they are receiving a lower standard of care.

For a full copy, please visit New England Journal of Medicine.


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The Center for Studying Health System Change Ceased operation on Dec. 31, 2013.