The importance of health maintenance organizations in american health care system

Another way in which HMOs seek to reduce costs is by providing care only within a restricted geographical area.

health maintenance organization definition

Cost containment[ edit ] Although businesses pursued the HMO model for its alleged cost containment benefits, some research indicates that private HMO plans don't achieve any significant cost savings over non-HMO plans.

These doctors act as "gatekeepers" to coordinate all the basic health care needs for their patients. In this case, physicians are direct employees of the HMOs.

preferred provider organization

Three questions are addressed. This act had three main provisions: Grants and loans were provided to plan, start, or expand an HMO Certain state-imposed restrictions on HMOs were removed if the HMOs were federally certified Employers with 25 or more employees were required to offer federally certified HMO options alongside indemnity upon request This last provision, called the dual choice provision, was the most important, as it gave HMOs access to the critical employer-based market that had often been blocked in the past.

Group model HMOs are also considered closed-panel, because doctors must be part of the group practice to participate in the HMO - the HMO panel is closed to other physicians in the community.

Staff model hmo

The authors argued that an increase in HMO market share would decrease Blue Cross hospitalization rates. A possible reason for this failure is that consumers might increase utilization in response to less cost sharing under HMOs. Paul has been cited as a prime example of the competitive effect generated by HMOs. Some less-than-ethical providers may withhold performing exams or prescribing expensive drugs or treatments in order to increase their bottom line. With a PPO, the plan sponsor negotiates discounts with participating doctors and hospitals, then pays them on a fee-for-service basis rather than prepaying. HMOs HMOs provide a wide range of comprehensive health care services to their members in exchange for a fixed periodic payment. Paul is recognized as a prime example of health care competition.

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Hospitals and Health Maintenance Organizations: An Analysis of the Minneapolis