The impact of relational activities on HMO organizational outcomes

Objective: To report the findings of an empirical study of health maintenan ce organization (HMO) organizational outcomes and relational activities in HMO-pharmaceutical manufacturer relations. Study Design: A mailed survey of a national random sample of 273 HMOs. Subjects and Methods: Data were obtained from 111 HMOs regarding their inte r-organizational relations with a pharmaceutical manufacturer. Respondents reported on 3 relational activities (initiating behavior, flexibility, bidi rectional communication) and 4 HMO organizational outcomes (long-term orien tation, equity in sharing costs and benefits, commitment between partners, financial performance). Also, 3 control variables were assessed: number of enrolled beneficiaries, HMO type, and estimated annual acquisition costs of pharmaceuticals. Four multiple regression analyses were performed, each wi th one organizational outcome variable as the dependent variable. Measures of relational activities and the control variables were the independent var iables in the regressions. Results: The response rate was 40.7%. All 3 relational activities showed si gnificant associations with HMO organizational outcomes. Two relational act ivities (bidirectional communication, initiating behavior) showed significa nt and positive associations with a long-term orientation. Independent prac tice association (IPA)-model HMOs were less likely to report a long-term or ientation toward a pharmaceutical manufacturer than other types of HMOs (ad justed R-2 = 0.40). Bidirectional communication and flexibility were signif icantly and positively associated with the equity of costs and benefits (ad justed R-2 = 0.29). Commitment had significant positive associations with a ll 3 relational activities (adjusted R-2 = 0.50). All 3 relational activiti es had significant positive associations with financial performance. HMOs w ith an annual acquisition cost >$2 million were less likely to report favor able financial performance associated with a pharmaceutical manufacturer th an were HMOs with lower costs (adjusted R-2 = 0.42). Conclusion: Relational activities, such as initiating behavior, flexibility , and bidirectional communication, can facilitate positive outcomes for HMO s. It is important for all parties interested in healthcare to recognize th at managing care creates a tension between achieving patient outcomes and o rganizational outcomes.