Non-profit health plans offer different advantages than for-profit health plans. First, they are not required to pay taxes, a competitive disadvantage. Second, they can use extra money to grow and restructure their fundamental business model. Third, they can invest in research and development.
Non-profit health plans offer health insurance.
In addition to offering health insurance, nonprofits such as IEHP often face the same challenges as for-profit organizations. These nonprofit organizations are responsible for the major decisions related to employee benefits, such as group health insurance. Basic coverage generally includes medical care, but nonprofits may offer vision and dental insurance. Employers have many options regarding group health insurance, including self-funded, fully-insured, and level-funded plans. Depending on the needs of the nonprofit, other types of health plans may also be considered.
Whether a nonprofit is already offering health benefits or not, adding such benefits can help increase employee morale and retention rates. Many nonprofits have limited resources and have to be agile and efficient. However, their employees are their most significant asset, so offering competitive healthcare benefits is vital to maintain morale and retain good employees. Fortunately, nonprofit organizations can implement health insurance benefits on a tight budget.
They reinvest income in the community instead of distributing it to shareholders.
One example is the donation of $100,000 by the Health Alliance Plan to Henry’s Groceries for Health, which provides food to the hungry and promotes good nutrition. Henry’s Groceries for Health is a partnership between the Henry Ford Health System and Gleaners Community Food Bank to address food insecurity and improve the health outcomes of vulnerable patients.
They provide more coverage for primary care visits.
While both for-profit and nonprofit health insurance plans offer good coverage, there are some critical differences between them. For example, while shareholders own for-profit health insurance companies, they have a higher fiscal responsibility to maximize profits. Therefore, they might cut benefits, decline coverage, or raise premiums. Non-profit health plans, on the other hand, have no investor-related issues. Consequently, they should be a good choice if you want an affordable health plan.
A point-of-service health plan allows you to see participating and non-participating health providers. You get more coverage if you use the referrals provided by your PCP, but you could also end up paying more. Non-PCP providers also charge more. If unsure of the proper care provider, check your plan’s approval process. This way, you can know for sure if you’re covered or not.
They cede control of tertiary care to nonprofit competitors.
The shift in the health care industry is primarily fueled by not-for-profit health plans increasingly ceding control of tertiary and quaternary care to their nonprofit competitors. Interestingly, the trend is bucking itself with the for-profit health plans that have chosen a community hospital-based strategy in Massachusetts. In contrast, nonprofit competitors like Partners HealthCare, which includes hospitals like Massachusetts General Hospital and Brigham & Women’s, have adopted a more quaternary care-focused strategy. This is one of the few examples in the country that illustrates an interesting approach from for-profit health plans.
The merger between for-profit and nonprofit hospitals has been described as five consumer groups: self-payers and insurers. The government and employers exert control over the hospital networks. The MCOs would be forced to pay hospitals $55 million more annually. Then these hospitals would lose 20 percent of their managed care patients. Nonetheless, the merger would benefit consumers.
They have a distinct marketing advantage.
Not-for-profit health plans have definite advantages. First, consumers prefer them because they believe these organizations aren’t in it for the money. They exist to help people access health care, not profit from it. But these perceptions aren’t always accurate. Second, not-for-profit health plans also have an edge in the industry regarding health plan providers, as they can more easily capture value in multiple areas.
Not-for-profit organizations are a creation of the post-World War II era when the first third-party payment programs were established. These third-party payment programs have monetized mainly health care. As a result, not-for-profit health plans have a distinct advantage in terms of marketing.