New Survey Findings:
Mixed Message From The Public On For-Profit Health Care
Many Americans Think For-Profits Are More Efficient and Provide Better Quality Service, But, Believe Them to be Less Community-Oriented and More Costly Than Not-For-Profits;
Also Concerned About Implications of Trend to For-Profit Health Care
Embargoed until: 9:00 a.m. E.T., Wednesday, December 13, 1995
For further information contact: Matt James or Tina Hoff
New York, NY -- Americans generally believe for-profit health care organizations, whether hospitals, HMOs or other health insurance plans, are more efficient and provide a better quality service than their not-for-profit counterparts, but they also think for-profits are less community-oriented and more costly for the individual consumer, according to new survey findings reported by the Kaiser Family Foundation. The survey also finds that most Americans perceive a trend toward for-profit health care to be underway in this country and a majority (54%) believe this to be a "bad thing" for health care. A quarter (24%) think the increase in for-profit health care doesn't matter very much and 19% say it is a "good thing" for health care in this country.
When it comes to making decisions about
their own health care, however, the largest group -- 46% of Americans -- say an organization's profit-status doesn't make much of a difference in who they "trust to provide [them] with high quality health care at a reasonable price." Almost equal percentages specify a preference for not-for-profit (26%) as do for for-profit (25%).
"This data illustrates the ambivalence that exists on the part of the public toward for-profit and not-for-profit health care. Americans want health care organizations to be efficient and responsive, and in that way 'business-
like,' but at the same time they don't want them to be 'like other businesses' for fear of higher costs and community interests being sacrificed," said Mark D. Smith, M.D., M.B.A., Executive Vice President, Kaiser Family Foundation.
The data was commissioned by the Foundation for a media briefing, held today in New York City in conjunction with the National Press Foundation, entitled, "Marcus Welby Goes to Wall Street: How Does Wall Street Value Managed Care Companies? What Is the Impact on Care?"
Perceptions About Trends In Health Care
Most Americans perceive that there has been tremendous growth in the health care business recently, particularly in the for-profit health arena:
- 81% say there are more national chains of for-profit health care organizations than there were three years ago;
- 79% say there has been an increase in the number of mergers between local hospitals;
- 71% say there has been an increase in the number of for-profit companies providing health care in local communities.
There is some confusion as to who operates hospitals today: 61% incorrectly believe many hospitals are being bought and run by organizations whose main business is something other than health care and 46% incorrectly believe state and local governments own and run more hospitals than they did three years ago.
Common Perceptions About For-Profit and Not-for-Profit Health Care
For many Americans "not-for-profit" connotes a more community focused, less bottom-line oriented mission, yet most seem to think for-profit health care organizations are better run in that they think they are more efficient, provide better quality care, and are more responsive.
| Not-for-Profit vs. For-Profit Health Care Organizations, Which Do You Think ... |
|
| Health Insurance Plans/HMOs | Hospitals |
|
|
|
| Not-For-Profit | vs. | For-Profit | Not-For-Profit | vs. | For-Profit |
Are More Helpful to the Community? |
66% |
|
30% |
65% |
|
31% |
Are More Responsive to Customers? |
46% |
|
50% |
42% |
|
54% |
Cost You Less? |
63% |
|
29% |
73% |
|
22% |
Provide Better Quality of Care? |
43% |
|
49% |
34% |
|
57% |
Are More Efficient? |
42% |
|
53% |
35% |
|
59% |
When asked which is "better" for the community, a hospital run by a "local for-profit organization" or one run by a "national for-profit chain," Americans overwhelmingly -- seven out of ten -- say the local choice is the preferred one. Only 26% say a national for-profit chain would be better for the community.
"For Americans, all health care, like politics, is local. People want a face to associate with their health care. As more mergers occur and more national for-profit organizations enter the mix this will be an issue to contend with in the health care industry," said Dr. Smith.
The Facts
Certain sectors of the health care industry have traditionally been investor-owned--such as pharmaceutical companies and manufacturers of medical supplies and equipment. Some provider types have also typically been for-profit, such as nursing homes (about two-thirds of all facilities in 1994). Physicians, while not classically viewed in the same way, have also been "for-profit" providers. Hospitals, on the other hand, have not; according to the American Hospital Association (AHA), for-profit hospitals' share of both facilities (about 14%) and beds (about 10-11%) have been mostly unchanged from 1985 to 1994.
Some sectors of the health care industry have been undergoing great flux, however, and these have captured the attention of the public. For example, according to a
Modern Healthcare survey (and preliminary statistics from the AHA), the proportion of total U.S. hospital facilities owned, leased or managed by just the five largest for-profit health care systems, such as Columbia/HCA, has grown, from just under 10 percent in 1992 to over 12 percent in 1994. The Health Care Financing Administration (HCFA) reports that the rate of increase in the number of for-profit home health agencies from 1991 to 1994 was more than twice that of all home health agencies (65% v. 32%); this increased the market share of the for-profit home-health agencies to almost half of all facilities. Over the same period, HCFA reports that the number of for-profit hospices almost tripled, bringing the market share in this traditionally not-for profit arena up from 10 percent to nearly 18%.
Some of the greatest scrutiny has been in the area of health insurance, particularly with the rise of investor-owned managed care organizations. In its early days, health insurance, was almost entirely on an indemnity model, and was dominated by Blue Cross/Blue Shield. The small enrollments in managed care were virtually all in not-for-profit organizations, such as Kaiser-Permanente. This has changed considerably over the past 15 years. According to the Group Health Association of America (GHAA), in 1981, 12 percent of HMO members were enrolled in for-profit HMOs, which at that time comprised 18 percent of plans. By 1985, the percentage of enrollees was up to 26% and the percentage of for-profit plans was 36%. According to InterStudy, as of January 1, 1995, the market share of the investor-owned managed care companies had risen to 58% of HMO members and 70% of plans.
Methodology
The data reported on in this release was collected for the Kaiser Family Foundation as part of a national random-sample, telephone survey of 1,007 adults nationwide. The survey was conducted by Louis Harris & Associates between November 2-6, 1995. The margin of error in the national sample is plus or minus 4 percent.
This data relates only to Americans'
perceptions about for-profit and not-for-profit health care and the trends currently underway in the health care industry. It does not report on people's actual knowledge as to the profit-status of their own health care providers or their real-life experiences with those providers.
* * *
The Kaiser Family Foundation, based in Menlo Park, California, is a nonprofit, independent national health care philanthropy and is not associated with Kaiser Permanente or Kaiser Industries. The Foundation's work is focused on four main areas: health policy, reproductive health, HIV, and health and development in South Africa.
A copy of the national top line data and questionnaire for this survey are available by calling the Kaiser Family Foundation's publication request line at 1 (800) 656-4533 (document #1108).
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Survey of Americans' Perceptions About For-Profit and Not-for-Profit Health Care:
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