Further HMO Debate

In a March 20 article, “Maxicare’s Ills Fuel Debate Over Benefits of HMOs,” Howard Greenwald of USC was quoted as saying that “any for-profit HMO is going to be in trouble.”

Greenwald apparently has not considered that HMOs vary greatly in size, structure and depth of experience. There are 643 companies in the United States loosely referred to as HMOs. As with companies in any other industry, some are well managed, some are not.

The Times article implied that for-profit HMOs are somehow inferior to not-for-profit HMOs. The real issue is whether an organization is well-managed, has appropriate financial reserves, and operates on the basis of a realistic strategic plan.

If a nonprofit HMO is to survive and provide quality service to its members, it must stay in the black just as a for-profit organization must.

Today, the majority of HMO services are provided by large, experienced organizations that are doing well financially, such as Kaiser Permanente, Harvard Community Health Plan, Group Health of Puget Sound and FHP.

Well-run HMOs will hold down costs by emphasizing preventive health care and responding promptly to patient medical needs. That means such prudent, but less costly, alternatives to acute hospital care as outpatient surgery, home health care and hospice care whenever it is medically appropriate.

ROBERT GUMBINER, M.D.

Fountain Valley

The writer is chairman and chief executive of FHP International Corp., the parent of a chain of health maintenance organizations in California, Utah, Arizona and Guam.