The "community-oriented" IHCO: how viable?

John Griffith posits that a "community orientation" will be the distinctive contribution and competitive advantage of not-for-profit integrated health care organizations IHCOs) as they vie with "anti-IHCOs" for market share. Not-forprofit ownership and this "community orientation" are in contrast to the profit objective and "membership orientation" of anti-IHCO health plans and delivery systems. But the major difference Griffith stresses is local versus external control of cost and quality and of decisions about community service, marketing, and provider relationships. Griffith calls the IHCO and anti-IHCO "sharply contrasting approaches to the redesign" of health care delivery. I agree, but I am less confident than he is that IHCOs, even those that follow his prescriptions, will be able to compete on price and quality and also offer tangible community benefits that purchasers will value and be willing to pay for, given the economic realities of the market-driven health care system. Griffith sees IHCOs acting to improve the health of their area's entire population (not just those who are sick) in contrast to the antiIHCO's narrower focus on its enrolled members. This means attention to health promotion and disease prevention and collaboration with other providers and with a range of community organizations whose activities affect the determinants of a community's health. "Community ownership," as a legal form and basic value, leads the IHCO to take deliberate steps to address community needs, to "serve all forms of health insurance," and to "provide for the uninsured." Worthy goals to be sure, but Griffith understates, in my opinion, the disadvantage these goals represent for an IHCO competing with anti-IHCOs that choose not to serve the uninsured and not to invest in services that benefit the community as a whole. I worry about the viability of Griffith's vision of the community-oriented IHCO on two grounds. First, are the envisioned "distinctive contributions" valued highly enough by the community and purchasers that organizations providing them will be preferred over organizations that do not? Second, assuming a "market" for these valued contributions, will local governance and management be able to bring them about? What Do Consumers and Purchasers Want? Clearly, employers and other purchasers want lower prices, and although the empirical evidence is sparse, it is reasonable to assume that lower prices will lead to greater market shares. Presumably, anti-IHCOs will be able price competitors. Assuming community-oriented IHCOs are able to match anti-IHCO prices (and this may be a big assumption, given the costs associated with community service), are the other types of behavior Griffith urges of IHCOs really going to give them a competitive advantage? Do "community-oriented" organizations really act any differently? Drawing on the literature comparing not-for-profit and for-profit hospitals, it does appear that not-for-profits provide more charity care than for-profits, although the differences are often small. Not-for-profits generally treat a higher portion of Medicaid patients, although this varies from state to state. Not-for-profits are more involved in education and research, and more frequently offer high-cost, unprofitable services such as NICUs, transplants, and burn care and trauma centers. They are more likely to be located in lowerincome areas and to provide community services such as free clinics, HIV/AIDS care, and outreach workers. Few hospital studies have looked carefully at quality of care in relation to ownership, although for-profit hospitals have equal or higher rates of accreditation than notfor-profit hospitals. Studies of nursing homes, however, consistently find more quality problems in for-profit homes. And for-profit nursing homes and home care agencies are more likely to select patients based on ability to pay. I am unaware of evidence to suggest that purchasers value these differences sufficiently to contract preferentially with hospitals or systems that exhibit them. …