Health Management Organizations

Health management organizations (HMOs) were designed to coordinate the fundamental health care services of enrollees for one flat payment. HMOs provide these medical services through different models: (a) through their own staff, (b) through a group organization of physicians contracted by the HMO to serve their patient population, or (c) through individual practice associations. Individual practice associations contract with independent physicians to be responsible for a certain number of patients while remaining free to contract with other HMOs or patients willing to pay for their services. Traditionally, patients were assigned a primary physician who provides most health care services and who must refer a patient for specialist care or hospitalization. A hallmark and major concern with the use of HMOs was the centralizing and analysis ...