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Health maintenance organizations (HMOs) are a primary vehicle for managed health care in the United States. An HMO is an organizational structure that insures participating members for health care–related expenses through its coordination of the financing elements of medical care with the care provision aspects. In its role as insurer, provider, and administrator for health care coverage, an HMO attempts to fulfill three often conflicting agendas: (1) the provision of high-quality health services; (2) the reduction of inefficiencies, both operational and economic, in such services; and (3) the generation of financial profits for the owners of care provider systems. This entry examines the history and development of HMOs, the Health Maintenance Organizations Act (HMO Act) of 1973, and the current role of HMOs.

The Development of ...
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