HMOs moved from community-based initiatives to national corporations during the last century.
A health maintenance organization (HMO) is an insurance company that regulates not only its customers' health care but also how that health care is delivered: customers need to seek care from HMO-approved doctors, and the HMO needs to approve of all procedures. In return, doctors have a steady stream of patients, and patients have lower costs. This model has its origins in the early 20th century, and is now bigger than ever.
Early HMOs
The first HMOs began in the 1930s as cooperative health plans in which community members would all contribute a small sum to treat future illnesses of individual members. As in modern HMOs, this practice naturally restricted the doctors that patients could use, and they focused on preventative care--""--rather than waiting for illnesses to develop and become more expensive to treat.
Slow Growth
Resistance to these early HMOs was fierce in the medical community, as doctors worried that seeking approval from an HMO to treat patients limited medical freedom, and the U.S. industry saw them as a first step towards socialized medicine, which it opposes. Some state governments even outlawed HMOs.
HMO Act of 1973
By the late 1960s, however, HMOs were popular enough to boast of 3 million customers, and to the medical industry, they surprisingly became an alternative to socialized medicine, rather than a first step towards it. In 1973, President Nixon signed the HMO Act into law, and suddenly the government was not only endorsing HMOs, but even requiring that employers offer at least one approved HMO among their insurance options.
Popularity Explosion
Although there was a slowdown in growth in the late 1980s, HMOs have grown steadily and rapidly since the HMO Act of 1973; by 2000, the number of Americans enrolled in an HMO program had jumped from 3 million to 80 million. This increase in popularity has given HMOs a great deal of influence in the medical community.
Future Considerations
The rise of HMOs was a key part in the movement of away from physician-oriented care and towards customer-based organizations. The health care reform bill that President Obama signed in 2010 promises even greater enrollment in health care plans, and so HMOs will most likely continue to increase in size and influence.
Tags: health care, first step, first step towards, health care, health maintenance, medical community, socialized medicine