subject: Hmos And Health Insurance [print this page] HMOs, or Health Management Organizations, had their heyday in recent decades, after President Richard Nixon signed into effect the HMO Act in 1973. This act legally permitted health insurance companies and organizations to offer services in the form of HMOs.
This form of health insurance, like the others, has both benefits and drawbacks. Despite the public disapproval from private physicians as well as such upstanding organizations and the American Medical Association, HMOs outnumbered private health insurance plans by the 1990s. Enrolling more than 80 million consumers at this point in time, HMOs continue to revise their policies but still maintain the same core of functioning.
An HMO is considered to be managed care, as only a certain group of providers are contracted by the HMO to provide services at a particular agreed-upon price. Those that run this sort of organization generally try to cover most, if not all, services that may arise to be needed by their patients. This includes family practitioners, specialists, diagnostic tests, and surgeries.
The benefit to providers of agreeing to participate with an HMO is that they are essentially guaranteed business. In exchange for a discounted rate on medical care, providers will be exclusively referred clients that need their services within the HMO.
As a result of these business agreements, though, consumers are left without any choice when it comes to where to go for care. Even if a provider is unprofessional and lacks the knowledge necessary to provide the best level of care, the patient must still continue with this provider or face paying full fees at an alternate provider. As the most restrictive health care plan, the Alliance for Health Care Reform indicates that all care must be coordinated and approved by a primary care physician.
There are a number of problems that can arise from requiring all services first be appraised and coordinated by a primary care physician. While general practitioners certainly have their place in the medical system, most lack the expertise to be able to always make the best decision when it comes to a patient's care. Rather than relying on the opinion of a specialist, some are pushed by HMOs to recommend less expensive treatment options, resulting in unacceptable care of a patient.
In addition, the requirement of obtaining prior authorization from a primary care physician can be problematic in cases in which time is of the essence. Requiring time and paperwork, sometimes complications can arise from the delay of proper and necessary care, resulting in unacceptable pain, discomfort, and even permanent damage.
Another issue that plagues HMOs is that they are generally limited to a specific geographical area. With this in mind, consumers may need to consider purchasing a traveler's insurance policy when traveling, or be prepared to pay full price for any services obtained outside the coverage area. While HMOs certainly have their place in the health insurance industry, concerns continue to be voiced about the quality of patient care offered. As health care reform descends upon the country in 2014, only time will tell what will become of the HMO.
by: Casey Trillbar
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