Advanced Search
MyIDEAS: Login

Is there a Relationship Between HMO Quality of Care and Financial Performance? Evidence from Texas HMOs


Author Info

  • Troy Quast

    (Department of Economics and International Business, Sam Houston State University)


The profits earned by health insurance companies have been under intense scrutiny by policymakers and the general public. However, attempts to reduce insurance company profits could affect the quality of care that they provide to their enrollees. This study investigates whether there is a relationship between the profitability of an HMO and the quality of care that its enrollees receive. The sample is comprised of health maintenance organizations in Texas from 2000 to 2008. Quality of care is proxied by HEDIS compliance rates for selected child and female health measures, while profits are measured both on a dollar and percentage basis. Annual data are used that are disaggregated by market area. The results suggest that there is a statistically significant relationship between profits and some measures of quality. Specifically, the child health measures used here are positively related to profits, in that increases (decreases) in profits are associated with increases (decreases) in quality. By contrast, there is not a statistically significant relationship between the available female health measures and profits. Further, for the child health measures, instrumental variable models that attempt to address to the potential endogeneity of quality and profits are consistent with the possibility that changes in profits have a causal effect on quality of care.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL:
Download Restriction: no

Bibliographic Info

Paper provided by Sam Houston State University, Department of Economics and International Business in its series Working Papers with number 1007.

as in new window
Date of creation: Dec 2010
Date of revision:
Handle: RePEc:shs:wpaper:1007

Contact details of provider:
Postal: P O Box 2118, Huntsville, TX 77341-2118
Fax: 936-294-3612
Web page:
More information through EDIRC

Related research



No references listed on IDEAS
You can help add them by filling out this form.



This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.


Access and download statistics


When requesting a correction, please mention this item's handle: RePEc:shs:wpaper:1007. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Troy Quast).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.