Since they were created, health maintenance organizations have had a complex history with both providers and members. HMOs were originally created to provide cost benefits to the insured, though studies have questioned their effectiveness in that area. While most companies provide various forms of HMOs to their employees, their effectiveness in creating a health-care system that provides the best possible coverage for their members has been a mixed bag.
Features
There are a number of features regarding HMOs and how they operate. HMOs expect members to choose a primary care physician, who will make the majority of decisions regarding that member's health-care concerns. This means that the PCP will make decisions regarding whether the patient should seek outside care, such as from a specialist, for further medical treatment. Generally, PCPs are internists, pediatricians, family doctors and other general practitioners. In order to get treatment from specialists, members will require a referral from their PCP. This, of course, is only in cases that do not require emergency treatment. PCPs are not authorized to refer patients to specialists without permission from the HMO. Care is managed through a utilization review, in which doctors are watched to determine whether they are performing services outside the HMO's general guidelines for their patients. While HMOs provide preventive care to patients and also pay for such services as immunizations, well-baby checkups, mammograms and physicals, other services -- such as outpatient mental health care, experimental treatments and costlier forms of treatment, diagnosis or care are either limited or prohibited.
Types
There are varying types of HMOs available to members, and each differs in determining how care is given, the role PCPs play in making medical decisions for their patients, etc. One type of HMO is an open-access HMO. Unlike general HMO coverage, open-access HMOs do not require members to seek a referral from a PCP in order to see a specialist. Case management is another form of care provided by HMOs. This involves the identification or management of disease for more catastrophic cases, such as diabetes, asthma and certain types of cancer. In these cases, HMOs tend to be more involved in treatment and care, often assigning case managers to patients or groups of patients. This is done to prevent patients from getting overlapping care from two providers and to guarantee the best possible patient care and treatment.
HMO Models
Other types of HMOs involve directly into how physicians and other health-care providers may operate within the system. They include the staff model, in which physicians work directly for the HMO, operating out of the HMO offices. HMO-provided physicians are allowed to treat only patients who are members. Physicians who work under the group model are contracted by HMOs. They generally are either self-employed or work in a hospital setting and belong to an umbrella of physicians based on a group practice under this HMO plan. Kaiser Permanente is a group model example of an HMO. Independent group practice is another form of a contractual HMO. Physicians under this plan are allowed to treat patients who aren't members. Group model physicians, like the staff model plan, are closed-panel, meaning that in order to participate under the HMO plan they must be a part of a group practice. Other physicians not under the HMO plan are prevented from working under it. In the independent practice association, physicians are contracted under this plan and then contracted by an HMO. This model is open-panel, meaning physicians are allowed to operate their own private practice outside the auspices of an HMO. The network model is yet another type of HMO. HMOs are able to contract among a network of different IPAs. Since 1990, the network model has been the more common form of HMO plan.
Costs
When it comes to costs, HMOs will generally transfer some of the financial risks onto providers. Certain PCPs (providers) will receive a fixed payment for every member they treat each month as a substitute for the type of services they provide. This is done to force providers to limit the amount of health-care service they will offer to patients. The original purpose for HMOs was to contain the high costs of health care, but studies have shown that HMOs have had no depreciable difference in costs than other health-care providers. Though consumers see far fewer out-of-pocket expenses, they nonetheless continue to see rising costs when other factors such as long-term care are added to the overall package.
Effects
One of the major debates revolving around health care is that HMOs do not provide the optimal amount of coverage for members. Criticism against HMOs has focused on the fact that patients rarely are given the kind of treatment they need that could save their lives. This includes emergency room treatment, experimental treatment and care for chronic illnesses. Critics contend that HMOs are less interested in providing the best possible health care treatment for their members and instead focus on making decisions based on costs. This often leaves providers with little control in determining what is best for their patients and patients with few options, since many HMOs deny treatment from specialists outside of referrals that fit within the HMO's general guidelines. Patients who have been damaged or harmed by HMO guidelines have little legal recourse as well. Lawsuits against HMOs are prevented by a federal statute called ERISA to award judgments that compensate plaintiffs for damages.
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