A fine line separates for-profit and nonprofit organizations, according to Castulo de la Rocha. "At the end of the year, nonprofits and for-profits both have a margin of profit. We take that profit and invest it back in the system in services to a population that needs it," he says.
Mr. de la Rocha is president and CEO of California-based AltaMed Health Services Corp., ranked as the number one nonprofit in the nation based on spending in service to Hispanics (see Hispanic Business 2006 Top 25 Nonprofits directory). In 2005 AltaMed reported income of $67.4 million against expenditures of $60.7 million, yielding a margin of almost $6.7 million to invest back in the community.
Both Sides of the Net
In many ways AltaMed behaves like a for-profit company. Roughly:
• 45 percent of its revenues come from direct fees for services.
•31 percent are derived from contracts with commercial health maintenance organizations.
•23 percent come from federal, state, and municipal grants.
•Less than 2 percent come from foundations and individual donors.
"They [AltaMed] are qualified to serve low-income patients, but they also have contracts to serve the insured population. These are people who may have other options but choose AltaMed," says Hector Flores, co-director of the Family Practice Residency Program at White Memorial Medical Center in East Los Angeles. This means that, unlike many nonprofits, AltaMed competes with other organizations, government agencies, and private clinics for patients. As a result, AltaMed has developed a "system of care that succeeds not only on the safety-net level, but in the mainstream market as well," Dr. Flores explains.
Since 1969, the organization has provided health services to the underserved population in Los Angeles County, with special focus on the Mexican-American segment. Today it operates more than 20 facilities including five clinics, a youth center, and several HIV treatment centers. From prenatal testing to senior care, AltaMed has a program to address the need.
A "Living Lab"
AltaMed helped pioneer the practice of bilingual and bicultural healthcare for the Hispanic market.
"We look at our practice as a living laboratory of curriculum development for medically underserved areas and multicultural populations, and that's why working with AltaMed is such a good fit," says Dr. Flores, whose residents often rotate through AltaMed facilities.
"You have to compete with values and that's what distinguishes us," adds Mr. de la Rocha.
The patient emphasis even extends to the AltaMed boardroom, where a majority of the members are consumers of the organization's care system. They include seniors, people with AIDS, and teenagers. Mr. de la Rocha calls them his personal monthly focus group on how to improve care.
Budget Pinch a Sharp Pain
Looking ahead, he foresees a serious budget crunch for medical spending of all types. "The federal government recently issued a Medicaid deficit budget that will put a major squeeze on the states, and they will squeeze down to us," Mr. de la Rocha predicts. "At the same time, the total number of uninsured has skyrocketed. So we have a huge job in dealing with people who don't have access to healthcare."
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