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Many consumers feel quality plays second fiddle to stock price

MANAGED CARE May 1998. © MediMedia USA
Managed Care Outlook

Many consumers feel quality plays second fiddle to stock price

MANAGED CARE May 1998. ©1998 Stezzi Communications

Even bullish markets don't excite skittish consumers who worry that quality may be traded for profit. How much is this perception reinforced when once-thriving stock declines, as has happened to some large, publicly traded HMOs recently?

The total stock value of the HMO industry grew 13-fold between January 1987 and November 1997, according to the Henry J. Kaiser Family Foundation. Compare that with the growth of the stock market as a whole during the same period, "only" four-fold, and you can see why investors jumped aboard. Still, there's that nagging fear that what goes up.... Several large publicly traded HMOs lost market value in 1997.

The question persists: Are the dual goals of pleasing shareholders and delivering high quality health care contradictory? We can't answer that, but we can report what consumers told the foundation in a survey earlier this year.

SOURCE: SURVEY OF AMERICANS ABOUT HEALTH CARE AND THE STOCK MARKET, KAISER FAMILY FOUNDATION, MENLO PARK, CALIF., 1998

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