In the United States of America, the healthcare system has gone through rapid modifications over the last twenty years. As costs have also escalated over the years, both private and public buyers of health insurance have turned out more sensitive to prices related to healthcare. This attitude of consumers and purchasers consequently prompted the health care providers to concentrate on granting cost-effective policies and incentives. In the same connection, the number of HMOs (health maintenance organizations) has grown rapidly (Reschovsky & Kemper, 1999). A health maintenance organization can be simply described as “a prepaid health plan delivering comprehensive care to members through designated providers, having a fixed periodic payment for health care services, and requiring members to be in a plan for a specified period of time (usually 1 year)” (Swansburg & Swansburg, 2002).
Even though HMOs are criticized for a number of reasons, there is no doubt in the fact that HMOs manage care by employing numerous arrays of nonfinancial and financial tools for the provision of cost-effective care (Reschovsky & Kemper, 1999). It can be said that the major purpose of the HMOs is the assumption and sharing of both the delivery risks as well as the financial risks related to the provision of all-encompassing health services to a voluntarily registered populace of a particular area.
Health Maintenance Organizations – A Discussion Concerning their Pros and Cons
It is not an untold secret that the American citizens pursue health insurance as a major necessity. In fact, there are a number of solid reasons that health insurance has turned out to be an important matter in the country. However, the efficiency and usefulness of any health insurance/health is directly and indirectly dependent on the selection of apposite policy. Therefore, the consumers need to be extremely critical while selecting a policy. They need to select health insurance policies that guarantee the desired safety, coverage and ease. As far as HMOs are concerned, the advantages associated with such plans crystal-clearly outweigh the negatives. In fact, the rapid growth in the number of people opting for HMOs in the recent times demonstrate the effectiveness of HMOs as an effective managed care plan for the patients. Various characteristics and tools employed by HMOs have attracted populations to pursue the offered services.
As compared to other plans such as PPOs (Preferred Provider Organizations), the premium payments for HMOs are considerably lower. In the same connection, the co-payments are also smaller as a consumer is liable to pay only five dollars to twenty dollars for every visit. Another advantage of opting for a policy associated with HMO is that the buyer is not required to give compensations for any deductible. In this way, patients are enabled to save hundreds of dollars on annual basis. Moreover, medications are also available at smaller amounts. This is done by keeping the costs of drugs down and recommending general medications. Thus, it can be easily said that people who are budget-conscious may find HMOs as the ultimate care plans.
It is one the basic requirements of a HMO plan that a consumer selects a Primary Care Physician (PCP) and provider location. However, a consumer can only choose a PCP who is a registered participant in the provider network. The chosen doctor renders services as the Primary Care Physician who is then responsible for the coordination of almost every aspect of medical care. These aspects may include hospitalization, regular checkups, and medical appointments’ arrangements to other health specialists.
Furthermore, the primary care physicians are used by HMOs “to control costs by significantly reducing the number of unnecessary visits to specialists” (Martocchio, 2003). Similarly, financial incentives are offered to physicians so that they can only provide the needed care to patients. This is done in order to make sure that patients are not prescribed unnecessary tests, surgeries, and operations. Even though HMOs are disapproved because of the limitedness of policies and plans, there is no doubt that they are affordable as compared to other medical care plans. It needs to be mentioned that the availability of a PCP makes it possible for the consumers to build and maintain a permanent relationship with their chosen physician.
It is important to note that the disadvantages associated with HMOs include limited pool of providers, limited coverage, necessity of prior approval under-treatment possibility, and compromised confidentiality. In spite of these cons, HMOs are appreciated for their extensive and comprehensive care plans “aimed at keeping their members healthy (e.g. yearly wellness checkups) to avoid paying for more costly services if and when they get sick” (Beik, 2011).
As discussed earlier, the people in the United States of America have been experiencing expensive health care facilities for the last many years. There is no doubt that the possession of health care insurance is extremely important for every individual. However, the elevated payments and complex procedures to access healthcare facilities have turned out to be a pain in the neck for common American citizens. The above-mentioned benefits of health maintenance organizations demonstrate that it is a consumer-friendly, cost-effective, and practical policy plan for people belonging to middle-class and lower middle-class citizens. However, it is still necessary to go through the policies and plans comprehensively before selecting a HMO plan in order to become aware of any vague rules and regulations.
Beik, J. (2011). Health Insurance Today: A Practical Approach (3rd ed.). St. Louis, MO: Elsevier/Saunders.
Martocchio, J. (2003). Employee Benefits: A Primer for Human Resource Professionals. Boston, Mass.: McGraw-Hill.
Reschovsky, J., & Kemper, P. (1999). Do HMOs Make a Difference? Introduction. Inquiry, 36(04), 374-377.
Swansburg, R., & Swansburg, R. (2002). Introduction to Management and Leadership for Nurse Managers (3rd ed.). Sudbury, Mass.: Jones and Bartlett.