According to Interstudy, a nonprofit organization that studies health

it is between C and D. In D,I think, 'it' doesn't sound right as a subject. and 'that' after semi colon refers to what? 'profit' or 'Interstudy'?

I pick C..

We definitely have an independent clause on either side of the semicolon in choice (C):

1) "only 36 percent of the nation’s 607 HMO’s were profitable last year" - the verb is "were", and the subject of that verb is "36 percent" (36 percent of what? of the nation's 607 HMO's).
2) "it estimates..." - the verb is "estimates", and the subject of that verb is "it".

It doesn't matter that #2 wouldn't make much sense on its own. Take this pair of sentences, for example:

Tim is a friend of mine. He often loans money to me.

If we get rid of the first sentence, the second one doesn't make as much sense (who does "he" refer to?). But that certainly doesn't mean that the second one isn't a grammatical sentence. The same goes for option (C). The second independent clause might not make sense on its own, but it's a complete thought with a main subject and verb.

As for the pronoun "it": well, what singular nouns could "it" refer to? The subject "36 percent" has a plural verb ("were") and would therefore require a plural pronoun. The only singular options are "Interstudy" and "a nonprofit organization", and those two nouns refer to the exact same thing! We can replace "it" with either "Interstudy" or "a nonprofit organization" and get the same exact meaning.

I hope that helps!

the problem is with the structure.
According to Interstudy, an organization, it estimates

the following construction is not only correct but also sounds right.
According to Interstudy, an organization, only 607 HMO’s were profitable last year

According to Interstudy, a nonprofit organization that studies health maintenance organizations (HMO’s), they estimate that, in comparison to last year, when only 36 percent of the nation’s 607 HMO’s was profitable, this year 73 percent will be.

(A) they estimate that, in comparison to last year, when only 36 percent of the nation’s 607 HMO’s was profitable, this year 73 percent will be

(B) compared to only 36 percent of the nation’s 607 HMO’s being profitable last year, they estimate 73 percent would be this year

(C) only 36 percent of the nation’s 607 HMO’s were profitable last year; it estimates that this year 73 percent will be

(D) it estimates 73 percent of the nation’s 607 HMO’s would be profitable this year; last year that was only 36 percent

(E) only 36 percent of the nation’s 607 HMO’s last year were profitable, whereas they estimate it this year to be 73 percent
A- they is plural reference
B-they plural
C-ambiguas reference
D-corrrect
E-they is plural reference

The sentence tests modifier
A and D are out as they unnecessarily use pronouns. B & E have pronoun error. B also uses being wrongly.

C is the clear winner.

C for me at the first instant..

According to Interstudy, a nonprofit organization that studies health maintenance organizations (HMO’s), only 36 percent of the nation’s 607 HMO’s were profitable last year; it estimates that this year 73 percent will be.

The correct part of the sentence needs to be followed by the clause itself.. Hence, leaves choice C and E. E is incorrect cos the choice uses "they".

It is not "36 percent of nation", but "36 percent of the nation’s 607 HMO’s". HMO's are countable (607 to be precise) and hence 36% of them are also countable (plural).

According to Interstudy, a nonprofit organization that studies health maintenance organizations (HMO’s), they estimate that, in comparison to last year, when only 36 percent of the nation’s 607 HMO’s was profitable, this year 73 percent will be.

(A) they estimate that, in comparison to last year, when only 36 percent of the nation’s 607 HMO’s was profitable, this year 73 percent will be

(B) compared to only 36 percent of the nation’s 607 HMO’s being profitable last year, they estimate 73 percent would be this year

(C) only 36 percent of the nation’s 607 HMO’s were profitable last year; it estimates that this year 73 percent will be

(D) it estimates 73 percent of the nation’s 607 HMO’s would be profitable this year; last year that was only 36 percent

(E) only 36 percent of the nation’s 607 HMO’s last year were profitable, whereas they estimate it this year to be 73 percent

ok - I go by the meaning.....and then to the Logic....and then the grammar,etc
A - Wrong grammatically (beginning with THEY - no referrent)
B - Grammar - 1 - Comapared To [X}, [Y] - Parallelism issue,
2 - (they estimate 73 percent) should be (they estimate THAT 73 percent)
C - Meaning fine, Logic fine, Grammar (yes, some ppl noticed - estimates that.....will be) is wrong construction - But kept it aside because did not feel this to be a make/break issue
D - Wrong grammatically (beginning with IT - no referrent)
E - Grammar - 1 - (607 HMO’s last year were profitable) should be (607 HMO’s last year being profitable)
2 - [X], WHEREAS [Y] - Parallelism error

2 points:

The performer of the estimation is a single institude, so any choice mentioning 'they' which is referring to the institude is false.

so A , B , E are out

In D, 'last year that was only 36 percent' is ambiguous, since the word 'that' has no reference.
according to the context, 'that' should refer to 'the percentage of HWO's that are profitable'; but this is not explicitly mentioned in the sentence. So D is out.

You are very welcome. I am glad I could help, and I appreciate the feedback.

Poor question. A non profit organisation has no verb.

choice A, B and E contain "they". we can not find a noun for "they". so, choice A, B and E are gone

structure in choice D is not wrong grammatically
according to the study, the city is good. this is correct.
but choice D suffer problem of "it". grammatically, "it" refers to "interstudy" and choice D is grammatical. but semantically, meaning is redundant because "according to" means "it estimate" and we use "it estimates" two times.

redundance on gmat is intolerable.

the ellipsis in choice C is hard. non native like me never can write this kind of ellipsis. but I dont care. I focus on finding the error. presenting the strange but correct pattern is a trick gmat often does.
dont stay away from strange pattern.

Here's the official explanation provided by the GMAC for this question:

This sentence describes reported estimates of how many HMOs will be profitable this year and how many were last year. The underlined portion of the sentence must clearly compare this year's percentage of profitable HMOs to last year's. Interstudy is described as a single organization, so the singular it would be appropriately used to refer to it. The phrase only 36 percent of the nation's 607 HMOs is a plural subject referring to multiple HMOs, and thus should be used with a plural verb form.

Option A: The plural they has no clear antecedent. It could confusingly appear to refer to HMOs rather than to Interstudy. If they is supposed to refer to Interstudy, the phrasing According to Interstudy … they estimate is oddly redundant. The phrasing in comparison to last year… this year 73 percent will be is verbose and seems to compare last year not with this year, but with 73 percent of HMOs being profitable this year. The plural subject only 36 percent of the nation's 607 HMOs does not agree with the singular was.

Option B: The antecedent of the pronoun they is unclear; they rather than referring to Interstudy, confusingly appears to refer to HMOs, which absurdly seem to be compared to only 36 percent of the nation's 607 HMO's being profitable last year.

Option C: Correct. The sentence straightforwardly states what percent of the HMOs were profitable last year, according to Interstudy. The plural subject only 36 percent of the nation's 607 HMOs agrees with the plural verb form were. After the semicolon, the singular it is used correctly to refer to the single organization Interstudy.

Option D: If the pronoun it is meant to refer to Interstudy, the phrasing According to Interstudy … it estimates is oddly redundant. The subjunctive would be does not agree with the indicative present tense estimates, given that what is being estimated is an actual state of affairs. The pronoun that has no clear antecedent.

Option E: The antecedents of they and it are unclear. The final clause is ambiguous; it is unclear whether this year modifies they estimate or to be 73 percent.

The correct answer is C.

Please note that I'm not the author of this explanation. I'm just posting it here since I believe it can help the community.

Was stuck between C and D. Chose D because C had a construction "estimate...will be". I know "will" is only used for certainty. How can estimation be so certain? Can someone please explain? But, D has a bigger problem of "year" getting "modified" by "that" clause. Both of them are faulty. In these cases, does anyone know which one to choose?

______________________
Whats wrong in D with "it"?
Thanks.

In the OA, C, isn't the "36 percent of nation" singular? Can someone explain why it is being considered plural?

I'm a non-native, and I don't understand "it estimates that this year 73 percent will be" at all, since I've never seen a sentence structure like this. Could anyone explain it?