Profitability of HMOs: does non-profit status make a difference?
This study, based on 163 HMOs, tests the hypothesis that the rates of return on assets (ROA) are not significantly different between for-profit and non-profit HMOs. It finds no statistical support for rejecting the hypothesis. The marked similarity in profitability is fully explained by analyzing methods of cost control and accounting, operational incentives and constraints, and price determination. The paper concludes that profitability is not a defining distinction in the operation of managed care.
Bryce
H J
HJ
Graduate School of Business Administration, College of William and Mary, Williamsburg, VA 23185.
D002202:Capital Financing; D003365:Costs and Cost Analysis / Q000706:statistics & numerical data; D003625:Data Collection; D006269:Health Facilities, Proprietary / Q000191:economics* / Q000706:statistics & numerical data; D006279:Health Maintenance Organizations / Q000191:economics* / Q000706:statistics & numerical data; D006302:Health Services Research; D007182:Income / Q000706:statistics & numerical data*; D007449:Investments; D009939:Organizations, Nonprofit / Q000191:economics* / Q000706:statistics & numerical data; D013660:Taxes; D014481:United States