This study investigates effcts of HMO internal structural arrangements on performance, spe-cially cost reduction measured by hospitalization rate. This study formulates formalization, cen-tralization measured by decision-making participation, differentiation, and coordination as struc-tural factors, considering coordination as an intermediate factor between the rest of structural factors and hospitalization rate. The commonly used HMO types is assumed not effective in ex-plaining performance differences. For the empirical test, I use bootstrap regression analyses with 48 HMOs. The results of the analyses show that HMO types fail to explain differences in hospitalization rate. However, dicision-making participation and differention effectively reduce hospiatalization rate, while fromalization increases hospitalization rate and coordination has nonessential effect on hospitalization rate. And, formalization and decision-making participation positively contribute to achieve coordination in HMO. These findings suggest that the theoretical framework derived from rational-citingency theory of formal organization better explains per-formance differences of HMOs than HMO types.