- Written By: Brendan McGuigan
- Edited By: Niki Foster
- Last Modified Date: 31 January 2012
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2003-2012 Conjecture Corporation
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 the HMO 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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Discuss this Article
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anon244332
Post 29 |
Why do hmo's even exist? They are money hungry criminals who should be thrown in jail for life! Occupy please continue to occupy hmo! These hungry fools are living large off of dying people in need! |
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anon173551
Post 28 |
Do you have to be on Medicare to be on an HMO? |
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anon162534
Post 27 |
According to the California Patient's Guide, patients have the right to receive continuous care from your doctor and HMO. Patients also have the right to be referred to other health care providers, get a second opinion, and receive an authorization within three days from the insurance company for a referral to a specialist. Patients also have the right to have their medical treatment options discussed with by them by a doctor, without any kind of interference or restrictions. For those of you who are having issues. hope it helps |
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anon149509
Post 26 |
Health Maintenance Organizations (HMO) charge high monthly premiums while forcing individuals to go to a doctor they contract with. If the individual goes to a non-contracted doctor, they are denied that care/treatment then left to pay for everything on top of their premium. When an insurance company decides what is needed and what isn't that is considered rationed care! HMO's prey on elder people because they can get kick backs from the government for getting them off Medicare. If this was any other business it would be considered illegal. The health industry has been bullied by these insurance companies/HMO's and they are who has ruined our health care system. Get rid of the insurance red tape and you are left with an amazing system that works better than any other country and has until insurance started dictating care. HMO's make money from all of the members paying their premiums and then not paying their claims. HMO's bring in more than they pay out! A one payer system and obamacare would work similar to HMO's! It's your health do the research! |
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anon134967
Post 25 |
"Ignorance is not an excuse, it is ignorance." Yes but when there are so many variables it does get confusing. And false advertising plays a part as well. Most people are working full-time jobs and have family obligations and just don't have the time to be a health "detective" to figure all of these things out. Of course, if one digs deeper, he/she will find out that the whole industry is a scam anyway. It's not meant to help people. It's meant to ignore them and make money. Compared to many countries, we're actually at the bottom of the list as far as health care goes. The U.S. is supposed to be the best country in the world but it sure doesn't seem that way today. Some "third world" countries have a better system as far as health care - no waiting, suffering, dying, no ridiculously expensive medications, etc etc. Why is that? |
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anon100131
Post 23 |
I work for the state of Michigan, in particular with low-income Medicaid recipients. When our office of personnel continued to raise our premiums, I switched to a HMO to save money. This HMO requires surgery at another hospital out of my town, has limited the amount of supplies for sleep apnea, and has delayed any medical procedure for one to two months, since I began with them. People on Medicaid seem to be able to move from doctor to doctor, have breast reductions and stomach tucks, and have mountains of pain medications with no oversight? I admit that I previously had two BCBS coverage and ended up with medical malpractice anyway. What is wrong with this country? Is it going to change? |
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anon92152
Post 20 |
Could someone please explain to me what an HMO CO45 (Charges exceed your contracted/legis.) means? |
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anon75684
Post 18 |
who started the HMO Plan first? |
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anon69999
Post 17 |
Simple question? Why is it that an HMO wants to fight on nearly everything on prescription drugs. Delay after delay, month after month. Is anyone at HMO caring or sensitive. Is there an advocate somewhere who can help, instead of being stubborn and uncaring. A good human being would be nice. People are hurting and dying. Is anyone listening? |
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anon66578
Post 16 |
HMO's require one to accept their choice of providers. Many would prefer to obtain their doctor, hospital, scrips etc. from those sources recommended by relatives, personal experience or just cause they don't like being held to corporate requirements limiting their selection. All of you praying for Obamacare hold up your pc. |
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anon65380
Post 15 |
what are the HMO members that are accredited by DOH? |
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anon49536
Post 14 |
HMO's are a covered benefit which pays for all your medical 100 percent. Some HMO's now are making subscriber pay a portion. That is not what an HMO is. |
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anon42669
Post 13 |
what is the definition of an exclusio? |
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anon42159
Post 12 |
Why is there no mention that HMOs receive large monthly payments that vary by county from Medicare for each person in the HMO? Any one should realize that their health care cannot be covered by the small monthly premium that they pay to the HMO. |
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anon41294
Post 11 |
HMO are health misery organizations who make large profits and ration care. |
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anon38129
Post 10 |
Hmo's have diluted the delivery of health care. The physicians are usully second rate physciains who could not make it on their own or have other problems. They are encouraged and sometimes rewarded for keeping people out of the hospital and not doing the appropriate tests to evaluate patients. Many HMO physicians are forced to see a certain number of patients in a very limited time which means they spend as little time as they have to with each patient. HMO medicine is a second level of medicine and patients need to be aware of that. Many people are forced into HMO's because of cost. You get what you pay for. --Drydoc |
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anon37926
Post 9 |
i dont understand what an HMO is. Can someone please "dumb" it down for me? whats the positives and negatives of HMO's? can someone simply list them without their opinion? please? |
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anon31415
Post 7 |
Do we foresee HMO accepting and recognizing Medical Tourism as it brings down their cost? |
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anon30229
Post 6 |
HMO, as far as I understand it, is a company that maintains organization for the health care providers. They are not providers themselves. |
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co840
Post 5 |
An HMO is a provider of health care services. As with any health care provider, its expenses are those of providing health care - medical and administrative. As it is a member organization, it's income is derived from member payments. You will find no literature that states payments to an HMO are premiums. Effectively, an HMO is a prepaid medical plan. I suspect that many HMOs purchase insurance to cover annual expenses that significantly exceed their expected expenses. By purchasing insurance, it doesn't make them insurance companies. Just because an organization operates using a mechanism that mirrors the insurance mechanism, that doesn't make it an insurance company unless it is incorporated as one. In regard to the comment by anon21056 about the Supreme Court, that court can no more make an HMO an insurance company than it can make a cucumber an apple. Functioning like an insurer does not create insurance. I think that jicama tastes like fresh sugar snap peas, that doesn't mean it is sugar snap peas. The court did not state HMOs are insurers or insurance companies. |
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anon23359
Post 4 |
How does it impact on finance? |
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anon21056
Post 3 |
co840- While you may think there is a "significant difference" between health insurance and health care providers, the United States Supreme Court disagrees. According to the Court in Rush v. Moran, an HMO "provides health care, and does so as an insurer." An HMO functions like an insurer because it underwrites and spreads risk among participants. Also, in most states, HMOs are regulated by their department of insurance. |
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co840
Post 2 |
An HMO is not necessarily insurance. Only Insurance Companies can sell insurance. HMOs are health care providers. If they are not incorporated as insurance companies they may not sell their product as insurance. Kaiser is the largest HMO, and it does not offer health insurance. It offers membership in a health care plan. There is a significant difference. Many complaints about smaller HMOs are directed at the insurance industry, when the insurance industry has nothing to do with them. Many PPOs are likewise, not insurance plans. Ignorance is not an excuse, it is ignorance. |
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anon7989
Post 1 |
how does the HMO earn its revenues and what are its expenses, basically how does this company earn its profits? |
