HWN Suggests

Trying to Revive H.M.O.s, but Without Those Scarlet Letters

An H.M.O. by any other name is still an H.M.O. Once emblematic of everything wrong with health insurance, the health maintenance organization is making a grudging, if somewhat successful, comeback. But its reputation for skimping on care has so tainted the plans that the insurers and companies resurrecting them have gone through innumerable steps to try to avoid using the term H.M.O. — only to be told, at least in one case by state regulators, that an H.M.O. must still be called an H.M.O.

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 The Dark History of Medicare Privatization

Medicare Advantage was supposed to be a money-saver. It’s now become a costly, unaccountable cash cow for private insurance companies that is swallowing traditional Medicare.

Articles of Interest

Accountable Care Organizations: Like H.M.O.s, but Different

In pursuit of greater efficiency in the United States health system, public programs and private insurers have begun to pay some hospitals and physicians differently. These new payment models take many forms, but they all impose greater responsibility for cost control and quality improvement on providers and bear some resemblance to failed health care financing arrangements from the 1990s. However, there are some distinctions that could make all the difference.

How the 'Father of the HMO' helped make Minnesota a model for health care reform

Dr. Paul Ellwood's Minnesota think tank advised presidents and left an indelible mark with alumni, including the founder of UnitedHealth Group. Back then, HMOs "were the rebels pushing for change."

Paul M. Ellwood Jr., a pioneer of HMOs, dies at 95

Yet while the fundamentals of the model had long been in place, it was Dr. Ellwood who gave the “prepaid health plan” an appealing new name and offered a sweeping vision for national reform. He coined the term HMO in a 1970 Fortune magazine article and proposed a health-care system that was guided by market forces, with groups of providers competing for patients by trying to offer better care at lower prices. Unlike in traditional health plans, the physicians would be paid based on the number of patients they treated, rather than for each procedure they performed.

Piercing the myth: How privatizers got their mitts on Medicare

Insurance companies decried Medicare’s fee-for-service model. But then Congress let them replace it with something much worse.

The Outlook For Hmos

Formats of HMOs vary widely, but they all share a few crucial traits. They deliver health insurance to the public at relatively affordable prices -- on the condition that members deal exclusively with a pre-selected network of doctors and hospitals. Those medical panels are meant to provide cost-effective care that meets the HMO's own quality standards. HMOs traditionally have been keen advocates of preventive care, such as flu shots, cholesterol checks and cancer screenings. At the same time, though, HMOs usually have tried to reduce frequencies of surgeries, hospitalizations and some expensive prescription-drug usage, on the belief that those services are widely overused.

The Rise and Fall of HMOs shows how a worthy idea went wrong

What we now refer to as a health maintenance organization has gone through a multitude of forms over the years. The idea, which originated with Dr. Paul Ellwood, a pediatric neurologist from Minnesota turned health policy visionary and reformer, was of a self-regulating health care system that aligned provider incentives with consumer interests. This was done through an “integrated delivery system,” built on the core of a large multi-specialty medical group practice—often with links to hospitals, labs, and pharmacies, and often with a significant amount of revenue based on per capita prepayment.

Why America doesn’t love HMOs as much as I do

Last week, I went to the eye doctor. An unremarkable event, hardly something to write about, except that it inspired me to reflect on how I learned to stop worrying and love my HMO.