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

Abstract

Objective. To compare the relative trustworthiness of nonprofit and for-profit health plans, using physician assessments to measure dimensions of plan performance that are difficult for consumers to evaluate. Data Source. A nationally representative sample of 1,621 physicians who responded to a special topics module of the 1998 Socioeconomic Monitoring System Survey (SMS), fielded by the American Medical Association. Physicians assessed various aspects of their primary managed care plan, defined as the plan in which they had the largest number of patients. Study Design. Plan ownership was measured as the interaction of tax-exempt status (nonprofit versus for-profit) and corporate control (single state versus multistate health plans). Two sets of regression models are estimated. The dependent variables in the regressions are five measures of performance related to plan trustworthiness: two related to deceptive practices and three to dimensions of quality that are largely hidden from enrollees. The first set (baseline) models relate plan ownership to trustworthy practices, controlling for other characteristics of the plan, the marketplace for health insurance, and the physician respondents. The second (interactive) set of models examines how the magnitude of ownership-related differences in trustworthiness varies with the market share of nonprofit plans in each community. Data Collection. The 1998 SMS was fielded between April and September of 1998 by Westat Inc. The average time required for a completed interview was approximately 30 minutes. The overall response rate was 52.2 percent. Principal Findings. Compared with more local nonprofit plans, for-profit plans affiliated with multistate corporations are consistently reported by their affiliated physicians to engage in practices associated with reduced trustworthiness. Nonprofit plans affiliated with multistate corporations have more physician-reported practices associated with trustworthiness than do for-profit corporate plans on four of five outcomes, but appear less trustworthy than locally controlled nonprofits on two of the five measures. The magnitude of these ownership-related differences declines as the market share of 605

What does it mean to trust a health system?

“…These findings support prior work on trustworthiness and health care. First, ownership seems to matter; forprofit ownership evokes expressions of mistrust in our focus groups as they have in US surveys on the subject [4]. Second, concerns about deceit, false promises and hidden agendas portrayed in our findings suggest non-deceptive practices [4] may indeed be worth pursuing though the practical challenges of doing so are considerable.…”

“…The need to find ways to understand these interdependent relationships is of paramount importance [24,26,27], yet the idea of trust in large-scale institutions or health systems is daunting when the condition of trust-that the 'truster' know the 'trusted' cannot be fulfilled given the distance of government from its citizens or health plans from its members [25]. Moreover, evidence about how trust can be nurtured, whether it can be viewed as a performance indicator and what makes a health system trustworthy is even scarcer [4,7,20].…”

“…Recently, much academic attention has been paid to explaining, predicting and prescribing solutions for this apparent crisis of trust [2][3][4][5]. Health systems have been especially scrutinized as they affect the lives of vulnerable patients and are the largest public expenditure program of many industrialized nations.…”

The Role of Tax Exemption in a Competitive Health Care Market

“…Researchers have found some correlation between patient exploitation and for-profit status; one study found that quality of care by for-profit health plans was lower for sicker (and hence presumably more vulnerable) enrollees (Tu and Reschovsky 2002); another found that for-profit dialysis facilities scored higher on certain "amenities" but lower on technical measures of quality that are harder for consumers to observe (Hirth, Chernew, and Orzol 2000). Another very recent study involving physicians' assessment of their health plans found that multistate for-profit health plans engaged in practices associated with reduced perceived trustworthiness, including patient exploitation, lack of disclosure, and outright deception (such as false advertising), and that locally controlled nonprofit plans Colombo ■ Tax Exemption 633 scored highest on measures of perceived trustworthiness (Schlesinger et al 2005). 4 Other works, however, have questioned the importance of nonprofit form to trust.…”

Do For-Profit Health Plans Restrict Access to Care Under Medicaid Managed Care?

“…In addition, nonprofit plans, because they tend to have more open governance arrangements and local community representation on their boards, may be more constrained in their ability to restrict access to care than are for-profit plans (Schlesinger, Quon, Wynia, Cummins, & Gray, 2005).…”