Question

Discuss what happened in the 1990's with HMO's. What backlash came as a result of the implementation and subsequently failed?

Please support your posts with references and citations within the content.

Answer 1

INTRODUCTION

Organizations that combine the financing and delivery of health care (prepaid health plans) were in existence before the turn of the century. However, prior to the 1970s, prepaid health plans were few in number, small in size, and often struggled with organized medical groups and with public and legal opinions. When the term health maintenance organization was coined, followed by HMO-enabling legislation at the Federal level in 1973 and by grants and loans to new HMOs, prepaid health plans took a leap in legitimacy. These plans, representing a dramatic alternative to fee-for-service medicine, were envisioned by some analysts as agents of change that would introduce competition into the health care industry.

In the United States, a health maintenance organization (HMO) is a medical insurance group that provides health services for a fixed annual fee. It is an organization that provides managed care for health insurance, self-funded health care benefit plans, individuals, and other entities, acting as a liaison with health care providers (hospitals, doctors, etc.) on a prepaid basis.

The Health Maintenance Organization covers care rendered by those doctors and other professionals who have agreed by contract to treat patients in accordance with the HMO's guidelines and restrictions in exchange for a steady stream of customers. HMOs cover emergency care regardless of the health care provider's contracted status.

  

Backlash that came in 1990s as a result of implementation of HMO and its failure:

First and foremost, although privately owned, HMO patient care ideology is collectivist with the goals of societal cost control and profits to a small elite controlling bureaucracy (e.g., hybrid communist oligarchy).

This collectivist ideology is the antithesis of the tradition of medical practice that is service to the best interests of the individual. These competing ideologies are irreconcilable and are the source of constant conflict with clear disadvantage to individual patients.

These patient disadvantages are now clearly visible in the almost daily reports of patient dissatisfaction in HMO systems.

It is quite clear that the majority of employers are unaware that HMOs are extremely expensive when compared to true insurance (e.g., the spread of financial risk by providing coverage for an unanticipated event).

The HMO scheme on the other hand is not insurance but the pre-payment for the consumption of anticipated medical services and in the process over charges for these so-called preventative services.

The HMO catastrophic coverage component also profits by the rationing or denial of services to those who are sick. The concept of rationing is of course a bias against timely and quality car.

In the context of over-payment, an average family rarely uses more than $500 of preventative services (e.g., physicals, pap smears, mammograms, blood tests, immunizations, etc.) on an annual basis.

All HMOs charge substantially more for these services, sometimes up to $3,000. The bottom financial line is that HMOs are simply a bad buy and a clear threat to the patients’ best interests.

Finally, HMOs are predicated upon presumed patient ignorance or medical illiteracy. It is widely but subtly circulated by HMO spokespersons that medical services are to complex for patient understanding.

It should be noted that the more complex the issue, the greater the need for individual patient sovereignty. If a direct patient-doctor relationship is complex, it is still much more complex to have a system in which the patient must choose an employer, who chooses an HMO, which chooses a doctor or clinical lab who has a clear bias to adhere to HMO regulations and procedures.

With the ignorance, patient medical decision making, medical access, and financial control are unquestionably usurped by non-medical third parties (HMO). This approach eliminated market competition of HMOs in 1990s since competition can only occur if the user of the service, namely the patient is satisfied.

REFERENCE

Gabel ,J.(1997). Ten ways HMOs have changed during the 1990s.Health Affairs(Millwood),16(3),134- 45.