Medical Specialty : VivaHealth Plan Is State’s First HMO to Target a ‘Best-Kept Secret’: Latinos

For a tiny health care plan, finding a spot in a Southern California market ruled by giant corporations isn’t easy. But Ruth Lopez-Williams hopes to tap the “best-kept secret” in Los Angeles by serving a population--lower-income Latinos--that the big guys have ignored for years.

She helped start VivaHealth Plan, a health maintenance organization recently licensed by the state, which says it can offer something the Kaiser Permanentes and PacifiCares can’t: an HMO that provides medical care specially tailored to an ethnic group.

After seven years of arduous effort to sell its idea to doctors, hospitals, business people and state regulators, VivaHealth last week kicked off its marketing campaign as the first HMO in the state--and probably one of the first in the nation--to exclusively target Latinos.

But the Monterey Park-based health plan will have to move fast to seize the moment. Lopez-Williams, VivaHealth’s chief executive, concedes that the “secret” she speaks of is slowly getting out: A few large HMOs are seeing the same opportunity and making inroads into predominantly Latino communities in Los Angeles County.

FHP International, for example, has linked up with White Memorial Hospital and a medical group of mostly Spanish-speaking doctors in East Los Angeles to try to expand its business in that area, said Elayne Bendel, a spokeswoman for the Fountain Valley-based HMO.

“This is the demographics of the region we serve, and we’d be very foolish . . . to write off this whole population,” Bendel said. “We’re taking some special steps to make FHP attractive to Hispanic consumers.” The company also has special marketing programs for the Cambodian, Chinese, Korean and Vietnamese communities, she said.

Blue Shield of California believes the Latino market has “tremendous potential,” company spokesman Mike Odom said. “It’s been a segment of the population that perhaps hasn’t been directly marketed to by HMOs and other health plans.”

VivaHealth has assembled a network of 1,300 physicians--many of them Spanish-speaking--in East Los Angeles and San Gabriel Valley. It has also affiliated with several Southland hospitals--including Downey Community Hospital, which provided $3 million in start-up funds in exchange for part ownership of VivaHealth’s state license.

VivaHealth’s fortunes will depend on its success at portraying itself as an alternative to “plain vanilla” health plans. It will stress the idea that Latinos have unique needs that are best met by bilingual and “culturally sensitive” doctors and nurses, Lopez-Williams said.

Many of VivaHealth’s doctors are Latinos or have years of experience practicing medicine in Latino communities. Lopez-Williams said that makes them more sensitive to cultural factors that can affect medical care, such as the frequent use of home remedies by Latino immigrants to treat minor illnesses.

Dr. Hector Flores, a Boyle Heights primary care physician, agrees: “There is no substitute for a physician being able to communicate directly with the patient, not just in making diagnoses, but also in handling psychological-social issues.”

VivaHealth was founded by Lopez-Williams and her brother, Dr. John Thropay, who runs a cancer treatment center in Montebello. Lopez-Williams, who holds an MBA from Pepperdine University, has been chief executive of the center since the early 1980s. Thropay is chairman of VivaHealth.

Through years of work at the cancer center, Lopez-Williams and Thropay became convinced that an HMO tailored to that community could be a financial success. From a health plan executive’s standpoint, Lopez-Williams said, the Latino market has a strong but not widely recognized appeal.

Latinos “have a high proclivity of family formation, family support, high participation in the private work force and are one of the fastest-growing small-business segments in Los Angeles County,” she said. “It’s also a very healthy community, and that’s a well-kept secret.”

UCLA Prof. David Hayes-Bautista, who is an adviser to VivaHealth, said the perception of the traditional medical community is that health care for ethnic groups “is very expensive, very high-trauma with lots of noncompliance, and that it’s a money-loser. Therefore, one should not rush to provide coverage for minority patients.”

But just the opposite is true, he said.

“The Latino population, in general, is younger, healthier, stable and employed,” said Hayes-Bautista, director of the UCLA School of Medicine’s Center for the Study of Latino Health. Latinos are only one-fifth as likely to die from heart disease, stroke or cancer as the general population. They have lower overall rates of cigarette and alcohol use. And Latino members of HMOs spend one-third less time in the hospital than others in their plan, he said.

Such statistics suggest that Latinos are a good risk for health insurers. Because HMOs typically receive a flat monthly fee for each member enrolled, regardless of how much medical care those members receive, HMOs strive to enroll the healthiest populations they can. Simply put, the lower a health plan’s costs per member, the greater its potential profit.

Lopez-Williams said VivaHealth will try to keep its members healthy by emphasizing routine preventive care.

But her company faces a difficult struggle in trying to market its plan to small or family-owned businesses. Many such businesses offer skimpy health benefits or none at all because of the expense.

Lopez-Williams believes she can appeal to such companies by emphasizing cost--she says premiums will be about 10% below the lowest in the market--and tailored coverage.

“Latino businesses are primarily family businesses,” she said. “When I go to these employers, this isn’t just about their businesses, it’s also about their families.”

But it’s likely to take more than an appeal to family concerns to woo Latino business people.

“They are coming late to the market, and there are major players already there who are well-funded and who will continue to dominate,” said one East Los Angeles doctor who is part of VivaHealth’s network but didn’t want his name used. “Viva will really have to appeal on pricing to business, and . . . it will have to have some major financial backers.”

Even if VivaHealth can’t survive on its own, it may make an attractive acquisition for a larger health plan trying to grab a bigger piece of the Latino market. It might also serve as a market test for the effectiveness of preventive health programs, which President Clinton is stressing in his health care reform package.

“This is a population for whom all this talk about primary care and family care might actually work,” Hayes-Bautista said. “But the providers will have to understand how to work with Latino caseloads, and not a lot is known about that.”