by Cyndie O'Brien and Kathleen Cade

One of the toughest jobs a company president or human resources manager has to deal with is selecting the right health benefit plan for the employee population. In today's world of competitive HMOs, its often difficult to tell one HMO for another. When it comes to commercial plans, in particular, the list of benefits offered by each HMO becomes a blur. Do the handful of nonprofit HMOs offer any advantages?


The Department of Corporations (DOC), the government agency charged with monitoring HMOs, regularly posts consumer based evaluations of managed care organizations. They feature a hot line which captures complaints that individuals register against their HMOs.

The DOC places the number of complaints received for each HMO on a statistical chart on their web sites. Non-profit HMOs routinely score well on these charts, receiving among the fewest complaint calls in the state. Inter Valley Health Plan, for example, registered less than one complaint call for every 10,000 members.

Another trick to discovering which HMO commercial plans stand out from the pack is by checking the consumer rating of the HMO's Medicare benefits (if they have one most do.) Because Medicare is so closely regulated, a number of government agencies and consumer groups have listed detailed rating statistics on HMOs who offer benefits to Medicare recipients.

While business owners and HR professionals are in the market for employee benefit plans and not Medicare plans, seeing an HMO's rating in the Medicare sector can often reveal how much emphasis an HMO really places on its members.

Medicare itself recently released results of a poll of 100,000 people enrolled in Medicare HMOs, establishing which HMOs were best in a number of categories. The results of the study were published in the February 15th Los Angeles Times and are also available at Medicare's community-access web site. One fact that stands out glaringly in Medicare's results for Southern California HMOs is that the two HMOs who scored by far the highest in the "Overall Rating" category, Inter Valley Health Plan and UHP Healthcare, are non-profit HMOs.

Perhaps its time for the business sector to take notice of the quality of care being received by members, both commercial and Medicare, from non-profit HMOs.


The vast majority of HMOs today are for-profit organizations. As mentioned above, however, there are exceptions. Like other HMOs, most non-profits have seen growth over the last several years. Also, like other HMOs, non-profits place great emphasis on preventive care and health education.

How then, do non-profit HMOs make them different from for-profit HMOs and what does it mean to be a non-profit HMO in 1999?

Traditionally, non-profit organizations were created to provide tax incentives for contributors. Despite changes in the tax laws over the years, contributions to non-profit organiza-tions, which range from national organizations like the Red Cross to your local National Public Radio station have been, in part at least, tax-deductible. The government allows such deductions to encourage contributions by individuals to worthy organizations who qualified for such a tax status.

Non-profit HMOs like Inter Valley Health Plan fall under a different category of the IRS' (and the California Department of Corporation's) non-profit status. Their non-profit status is based on the fact that they tangibly demonstrate a specific level of community service.


Due to their unique structures, non-profit HMOs become deeply involved in their surrounding communities, much as the best hospitals do. The total organizational focus on a non-profit HMO is on the care of its members: no one is concerned with share-holder relations or the price of the company's stock. In a non-profit scenario, there are no shares and no stockholders to please.

Regional, non-profit HMOs support the health care infrastructure of all of the regions in which they provide care. Furthermore, most non-profit HMOs preserve the traditional doctor/patient relationship in which physicians maintain their individual identities as health care providers to the community.

Because of their structure, more of non-profit HMOs' costs go directly to medical care as opposed to salaries, advertising, paperwork and profits.

Non-profit HMOs are involved in the communities they serve from the top level on down. Inter Valley, for example, features a board of directors made up of one-third consumers, one-third physicians and one-third hospital representatives. Day-to-day activities on members' behalf, as well as Inter Val-ley's long term planning, are therefore determined by representa-tives of each of the key groups with whom the HMO works and serves.


These HMOs' status as non-profits and their community relation-ships push them to continuously design new and innovative programs that will benefit the needs of local businesses. Inter Valley, for example, was one of the first HMOs in California to offer a point of service plan. Their popular "Trilogy" program, developed in 1994, enables employee members to see any physician, anywhere. Inter Valley implemented Trilogy to give members who choose the option maximum flexibility in the selection of health care providers.

Trilogy enrollees have the option to use physicians and other providers who are not under contract with Inter Valley. Members are free to go outside the system whenever they need care, but if they choose to receive care from providers within Inter Valley's contracted network, they will pay less.

It is programs such as Trilogy that provide business consumers with the ideal bridge between HMO managed care and indemnity insurance. Managed care provides quality health care at proven cost savings while the point-of-service option allows for the use of non-contracting physicians and health care providers without sacrificing coverage altogether.


As seen in study results such as Medicare's recent poll, non-profit HMOs have a good reputation among their own members in several key categories. They maintain a high level of member satisfaction, are known for placing patient care above the bottom line, and they provide quality care and service in the shape of a diverse variety of services.

When you combine these elements, there is no question that, so far as HMOs such as Inter Valley Health Plan are concerned, non-profit status is a powerful factor in providing cost-efficient, quality care from providers who express a high degree of satisfaction with their HMO relationship.

Cyndie O'Brien is Communications Director with Inter Valley Health Plan, a Federally Qualified, non-profit HMO based in Pomona. Kathleen Cade is Director of Sales with Inter Valley. For more information about Inter Valley Health Plan, call 909-623-6333.

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