Impact of HMO ownership on management processes and utilization outcomes

Objective: To examine the effects of health maintenance organization (HMO) ownership characteristics on selected utilization outcomes and management p rocesses affecting utilization. Study Design: We used 1995 HMO data from the American Association of Health Plans. Patients and Methods: Using regression analysis, we examined the relation b etween HMO utilization (hospital discharges, days, and average length of st ay; cardiac catheterization procedures; and average cost of outpatient pres criptions) and the structural characteristics of HMOs: ownership type (insu rance company, hospital, physician, independent, and national managed care company), HMO size, for-profit status, model type, geographic region, and p ayer mix. Results: HMO ownership type is significantly associated with medical manage ment processes, including risk sharing by providers, risk sharing by consum ers, and other management strategies. Relative to hospital-owned HMOs, insu rance company-owned HMOs have fewer hospital discharges, fewer hospital day s, and longer lengths of stay. National managed care organization-owned HMO s have fewer cardiac catheterizations and lower average outpatient prescrip tion costs. Independently owned HMOs have more cardiac catheterizations. Fo r-profit HMOs have lower prescription costs. Relative to hospital-owned HMO s, insurance company-owned HMOs are more likely to use hospital risk sharin g and provider capitation and less likely to use out-of-pocket payments for hospital use and a closed formulary. National managed care organization-ow ned HMOs are less likely to use provider capitation, out-of-pocket payments for hospital use, catastrophic case management, and hospital risk sharing. Physician-hospilal-owned HMOs are less likely to use catastrophic case man agement. For profit HMOs are more likely to use hospital risk sharing and c atastrophic case management. Conclusion: HMO ownership type affects utilization outcomes and management strategies.