The impact of relational activities on HMO organizational outcomes

To report the findings of an empirical study of health maintenance organization (HMO) organizational outcomes and relational activities in HMO-pharmaceutical manufacturer relations.

A mailed survey of a national random sample of 273 HMOs.

Data were obtained from 111 HMOs regarding their inter-organizational relations with a pharmaceutical manufacturer. Respondents reported on 3 relational activities (initiating behavior, flexibility, bidirectional communication) and 4 HMO organizational outcomes (long-term orientation, 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 with one organizational outcome variable as the dependent variable. Measures of relational activities and the control variables were the independent variables in the regressions.

The response rate was 40.7%. All 3 relational activities showed significant associations with HMO organizational outcomes. Two relational activities (bidirectional communication, initiating behavior) showed significant and positive associations with a long-term orientation. Independent practice association (IPA)-model HMOs were less likely to report a long-term orientation toward a pharmaceutical manufacturer than other types of HMOs (adjusted R2 = 0.40). Bidirectional communication and flexibility were significantly and positively associated with the equity of costs and benefits (adjusted R2 = 0.29). Commitment had significant positive associations with all 3 relational activities (adjusted R2 = 0.50). All 3 relational activities had significant positive associations with financial performance. HMOs with an annual acquisition cost > $2 million were less likely to report favorable financial performance associated with a pharmaceutical manufacturer than were HMOs with lower costs (adjusted R2 = 0.42).

Relational activities, such as initiating behavior, flexibility, and bidirectional communication, can facilitate positive outcomes for HMOs. It is important for all parties interested in healthcare to recognize that managing care creates a tension between achieving patient outcomes and organizational outcomes.