HMO Plans

An HMO, Health Maintenance Organization, is a specific type of health care plan found in the United States. Unlike traditional health coverage, an HMO sets out guidelines under which doctors can operate. On average, health care coverage through the use of an HMO costs less than comparable traditional health insurance, with a trade-off of limitations on the range of treatments available.

The HMO has its roots sometime in the early part of the 20th century. Many businesses began offering their employees prepaid medical programs, under which their care was looked after so long as it fell within the scope of allowed procedures. The HMO did well throughout the mid-part of the century as well, until its use began to decline drastically in the late 1960s and early 1970s. In 1973, the U.S. Department of Health and Human Services passed the HMO Act, which helped cement the HMO as a part of the American medical universe.

The ways in which an HMO is able to offer cheaper health care are twofold. First, by contracting with specific providers of health care and dealing with large quantities of patients, the HMO is able to negotiate for more affordable health care than the patients would otherwise receive. Secondly, by eliminating treatments that theHMO views as unnecessary, and by focusing on preventative health care with an eye toward the long-term health of their members, the HMO reduces costs.

When one joins an HMO, one is usually asked to choose a primary care physician. This doctor then acts in part as the HMO’s agent in determining what treatments the patient does and does not need. When the primary care physician determines that the patient needs care they cannot offer, they give a referral to a specialist that can address the patient’s concerns. Emergency visits are exempt from this referral limitation, of course, and in many cases women are able to choose an OB/GYN as well.

Some well-known HMOs include Blue Cross and Blue Shield, and Kaiser Permanente, which was founded in 1945 and is widely claimed to be the largest non-profit organization in the United States. The long-term benefits of the HMO structure are a subject of much debate. Proponents point out that they offer low-cost health care to those who otherwise might be without, while critics say that restrictions placed by the HMO, and a general atmosphere encouraging practitioners to avoid referring patients when possible, results in many serious illnesses and medical conditions going untreated.

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