Health maintenance organization

In the United States, a health maintenance organization (HMO) is a medical insurance group that provides health services for a fixed annual fee.[1] It is an organization that provides or arranges 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 Act of 1973 required employers with 25 or more employees to offer federally certified HMO options if the employer offers traditional healthcare options.[2] Unlike traditional indemnity insurance, an HMO 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.


HMOs often require members to select a primary care physician (PCP), a doctor who acts as a "gatekeeper" to direct access to medical services but this is not always the case. PCPs are usually internists, pediatricians, family doctors, geriatricians, or general practitioners (GPs). Except in medical emergency situations, patients need a referral from the PCP in order to see a specialist or other doctor, and the gatekeeper cannot authorize that referral unless the HMO guidelines deem it necessary. Some HMOs pay gatekeeper PCPs set fees for each defined medical procedure they provide to insured patients (fee-for-service) and then capitate specialists (that is, pay a set fee for each insured person's care, irrespective of which medical procedures the specialists performs to achieve that care), while others use the reverse arrangement.

"Open access" and "POS" (point of service) products are a combination of an HMO and traditional indemnity plan. The member(s) are not required to use a gatekeeper or obtain a referral before seeing a specialist. In that case, the traditional benefits are applicable. If the member uses a gatekeeper, the HMO benefits are applied. However, the beneficiary cost sharing (e.g., co-payment or coinsurance) may be higher for specialist care.[3] HMOs also manage care through utilization review. That means they monitor doctors to see if they are performing more services for their patients than other doctors, or fewer. HMOs often provide preventive care for a lower copayment or for free, in order to keep members from developing a preventable condition that would require a great deal of medical services. When HMOs were coming into existence, indemnity plans often did not cover preventive services, such as immunizations, well-baby checkups, mammograms, or physicals. It is this inclusion of services intended to maintain a member's health that gave the HMO its name. Some services, such as outpatient mental health care, are limited, and more costly forms of care, diagnosis, or treatment may not be covered. Experimental treatments and elective services that are not medically necessary (such as elective plastic surgery) are almost never covered.

Other choices for managing care are case management, in which patients with catastrophic cases are identified, or disease management, in which patients with certain chronic diseases like diabetes, asthma, or some forms of cancer are identified. In either case, the HMO takes a greater level of involvement in the patient's care, assigning a case manager to the patient or a group of patients to ensure that no two providers provide overlapping care, and to ensure that the patient is receiving appropriate treatment, so that the condition does not worsen beyond what can be helped.

Cost containment

Although businesses pursued the HMO model for its alleged cost containment benefits, some research indicates that private HMO plans don't achieve any significant cost savings over non-HMO plans. Although out-of-pocket costs are reduced for consumers, controlling for other factors, the plans don't affect total expenditures and payments by insurers. A possible reason for this failure is that consumers might increase utilization in response to less cost sharing under HMOs.[4] Some[5] have asserted that HMOs (especially those run for profit) actually increase administrative costs and tend to cherry-pick healthier patients.


Though some forms of group "managed care" did exist prior to the 1970s, in the USA they came about chiefly through the influence of U.S. President Richard Nixon and his friend Edgar Kaiser. In discussion in the White House on February 17, 1971, Nixon expressed his support for the essential philosophy of the HMO, which John Ehrlichman explained thus: "All the incentives are toward less medical care, because the less care they give them, the more money they make." [6] Kaiser Permanente disputes Ehrlichman's "secondhand, inarticulate paraphrase", and presents a record of the briefs received by Ehrlichman and the White House.[7]

The earliest form of HMOs can be seen in a number of prepaid health plans. In 1910, the Western Clinic in Tacoma, Washington offered lumber mill owners and their employees certain medical services from its providers for a premium of $0.50 per member per month. This is considered by some to be the first example of an HMO. However, Ross-Loos Medical Group, established in 1929, is considered to be the first HMO in the United States; it was headquartered in Los Angeles and initially provided services for Los Angeles Department of Water and Power (DWP) and Los Angeles County employees.200 DWP employees enrolled at a cost of $1.50 each per month. Within a year, the Los Angeles Fire Department signed up, then the Los Angeles Police Department, then the Southern California Telephone Company (now AT&T Inc.), and more. By 1951, enrollment stood at 35,000 and included teachers, county and city employees. In 1982 through the merger of the Insurance Company of North America (INA) founded in 1792 and Connecticut General (CG) founded in 1865 came together to become CIGNA. Also in 1929 Dr. Michael Shadid created a health plan in Elk City, Oklahoma in which farmers bought shares for $50 to raise the money to build a hospital. The medical community did not like this arrangement and threatened to suspend Shadid's licence. The Farmer's Union took control of the hospital and the health plan in 1934. Also in 1929, Baylor Hospital provided approximately 1,500 teachers with prepaid care. This was the origin of Blue Cross. Around 1939, state medical societies created Blue Shield plans to cover physician services, as Blue Cross covered only hospital services. These prepaid plans burgeoned during the Great Depression as a method for providers to ensure constant and steady revenue.

In 1970, the number of HMOs declined to fewer than 40. Paul M. Ellwood, Jr., often called the "father" of the HMO, began having discussions with what is today the U.S. Department of Health and Human Services that led to the enactment of the Health Maintenance Organization Act of 1973. This act had three main provisions:

  • Grants and loans were provided to plan, start, or expand an HMO
  • Certain state-imposed restrictions on HMOs were removed if the HMOs were federally certified
  • Employers with 25 or more employees were required to offer federally certified HMO options alongside indemnity upon request

This last provision, called the dual choice provision, was the most important, as it gave HMOs access to the critical employer-based market that had often been blocked in the past. The federal government was slow to issue regulations and certify plans until 1977, when HMOs began to grow rapidly. The dual choice provision expired in 1995.

In 1971, Gordon K. MacLeod MD developed and became the director of the United States' first federal Health Maintenance Organization (HMO) program. He was recruited by Elliot Richardson, the secretary of the U.S. Department of Health, Education and Welfare.


HMOs operate in a variety of forms. Most HMOs today do not fit neatly into one form; they can have multiple divisions, each operating under a different model, or blend two or more models together. In the staff model, physicians are salaried and have offices in HMO buildings. In this case, physicians are direct employees of the HMOs. This model is an example of a closed-panel HMO, meaning that contracted physicians may only see HMO patients. Previously this type of HMO was common, although currently it is nearly inactive.[8] In the group model, the HMO does not employ the physicians directly, but contracts with a multi-specialty physician group practice. Individual physicians are employed by the group practice, rather than by the HMO. The group practice may be established by the HMO and only serve HMO members ("captive group model"). Kaiser Permanente is an example of a captive group model HMO rather than a staff model HMO, as is commonly believed. An HMO may also contract with an existing, independent group practice ("independent group model"), which will generally continue to treat non-HMO patients. Group model HMOs are also considered closed-panel, because doctors must be part of the group practice to participate in the HMO - the HMO panel is closed to other physicians in the community.[9]

If not already part of a group medical practice, physicians may contract with an independent practice association (IPA), which in turn contracts with the HMO. This model is an example of an open-panel HMO, where a physician may maintain their own office and may see non-HMO members.

In the network model, an HMO will contract with any combination of groups, IPAs (Independent Practice Associations), and individual physicians. Since 1990, most HMOs run by managed care organizations with other lines of business (such as PPO, POS and indemnity) use the network model.


HMOs in the USA are regulated at both the state and federal levels. They are licensed by the states, under a license that is known as a certificate of authority (COA) rather than under an insurance license.[10] State and federal regulators also issue mandates, requirements for health maintenance organizations to provide particular products. In 1972 the National Association of Insurance Commissioners adopted the HMO Model Act, which was intended to provide a model regulatory structure for states to use in authorizing the establishment of HMOs and in monitoring their operation.[11]

Legal responsibilities

HMOs often have a negative public image due to their restrictive appearance. HMOs have been the target of lawsuits claiming that the restrictions of the HMO prevented necessary care. Whether an HMO can be held responsible for a physician's negligence partially depends on the HMO's screening process. If an HMO only contracts with providers meeting certain quality criteria and advertises this to its members, a court may be more likely to find that the HMO is responsible, just as hospitals can be liable for negligence in selecting physicians. However, an HMO is often insulated from malpractice lawsuits. The Employee Retirement Income Security Act (ERISA) can be held to preempt negligence claims as well. In this case, the deciding factor is whether the harm results from the plan's administration or the provider's actions. ERISA does not preempt or insulate HMOs from breach of contract or state law claims asserted by an independent, third-party provider of medical services.[12]

See also


  1. ^ "BBC News - G-I - Health Maintenance Organization / HMO". Retrieved 22 March 2018.
  2. ^ Joseph L. Dorsey, "The Health Maintenance Organization Act of 1973(P.L. 93-222)and Prepaid Group Practice Plan," Medical Care, Vol. 13, No. 1, (Jan., 1975), pp. 1–9
  3. ^ Peter R. Kongstvedt, "The Managed Health Care Handbook," Fourth Edition, Aspen Publishers, Inc., 2001, page 40 ISBN 0-8342-1726-0
  4. ^ Jaeun Shin, Sangho Moon, "Do HMO Plans Reduce Expenditure in the Private Sector?", Economic Inquiry, Jan 2007. [1]
  5. ^ "Claim That HMO's Save Money Is Little More Than "Folklore," Health Affairs Study Finds," 2000. Physicians for a National Health Program.
  6. ^ Nixon, Richard. "Transcript of taped conversation between President Richard Nixon and John D. Ehrlichman (1971) that led to the HMO act of 1973:". Wikisource. Retrieved 7 April 2018.
  7. ^ "Kaiser Permanente's Prominent Role in American Health Care Reform - Kaiser Permanente Share". Archived from the original on 2017-02-11. Retrieved 2017-02-09.
  8. ^ "Staff-Model HMOs: Don't Blink or You'll Miss Them!". 1 July 1999. Retrieved 22 March 2018.
  9. ^ Peter R. Kongstvedt, "The Managed Health Care Handbook," 4th edition, Aspen Publishers, Inc., 2001, ISBN 0-8342-1726-0, pages 35–26
  10. ^ Peter R. Kongstvedt, "The Managed Health Care Handbook," Fourth Edition, Aspen Publishers, Inc., 2001, page 1322 ISBN 0-8342-1726-0
  11. ^ O'Rourke, Paul F. (1974). Organizational aspects of prepaid health plans-HMO's. California.
  12. ^ United States District Court, N.D. Texas, Dallas Division. BAYLOR UNIVERSITY MEDICAL CENTER v. ARKANSAS BLUE CROSS BLUE SHIELD. No. Civ.A. 3:03-CV-2084-.Jan. 9, 2004.MEMORANDUM ORDER

External links


Cigna is an American worldwide health services organization based in suburban Bloomfield, Connecticut and Philadelphia, Pennsylvania. Its insurance subsidiaries are major providers of medical, dental, disability, life and accident insurance and related products and services, the majority of which are offered through employers and other groups (e.g. governmental and non-governmental organizations, unions and associations).

Cigna offers Medicare and Medicaid products and health, life and accident insurance coverages primarily to individuals in the U.S. and selected international markets. In addition to its ongoing operations described above, Cigna also has certain run-off operations, including a Run-off Reinsurance segment. In the Phoenix metropolitan area, Cigna runs a full-service staff-model HMO (health maintenance organization) with satellite clinics throughout the region, known as the Cigna Medical Group.Cigna Global Health Benefits also operates under the Cigna corporation. Cigna’s motto is 'Together, all the way.' The company ranked No. 73 in the 2018 Fortune 500 list of the largest United States corporations by total revenue.On March 7, 2018, it was announced that Cigna would buy Express Scripts in a $67 billion deal and on August 24, 2018, the shareholders of Cigna and Express Scripts approved the deal.

Dental insurance

Dental insurance is a form of health insurance designed to pay a portion of the costs associated with dental care. There are several different types of individual, family, or group dental insurance plans grouped into three primary categories: Indemnity, Preferred Provider Network (PPO), and Dental Health Managed Organizations (DHMO).

Generally dental offices have a fee schedule, or a list of prices for the dental services or procedures they offer. Dental insurance companies have similar fee schedules which is generally based on Usual and Customary dental services, an average of fees in an area. The fee schedule is commonly used as the transactional instrument between the insurance company, dental office and/or dentist, and the consumer.

Eagle Mountain, California

Eagle Mountain, California, is a modern-day ghost town in the California desert in Riverside County founded in 1948 by noted industrialist Henry J. Kaiser. The town is located at the entrance of the now-defunct Eagle Mountain iron mine, once owned by the Southern Pacific Railroad, then Kaiser Steel, and located on the southeastern corner of Joshua Tree National Park. The town's fully integrated medical care system, similar to other Kaiser operations in California, was the genesis of the modern-day Kaiser Permanente health maintenance organization. Eagle Mountain is accessible by Riverside County Route R2, twelve miles (19 km) north of Desert Center, midway between Indio and the California/Arizona state line along Interstate 10. The town's relative youth and brief time of abandonment make Eagle Mountain among the country's best preserved ghost towns.

Health Insurance Plan of New Jersey

Health Insurance Plan of New Jersey or HIP of New Jersey was a Health Maintenance Organization in New Jersey that was declared insolvent in 1998 and filed for bankruptcy in 1999. The bankruptcy left some people with no insurance coverage. Jaynee LaVecchia, the State Commissioner of Banking and Insurance proposed legislation to create a fund to pay the costs of future HMO failures in New Jersey.

Health Maintenance Organization Act of 1973

The Health Maintenance Organization Act of 1973 (Pub. L. 93-222 codified as 42 U.S.C. §300e) is a United States statute enacted on December 29, 1973. The Health Maintenance Organization Act, informally known as the federal HMO Act, is a federal law that provides for a trial federal program to promote and encourage the development of health maintenance organizations (HMOs). The federal HMO Act amended the Public Health Service Act, which Congress passed in 1944. The principal sponsor of the federal HMO Act was Sen. Edward M. Kennedy (MA).

Kupat Holim Meuhedet

Kupat Holim Meuhedet (Hebrew: קופת חולים מאוחדת‎, lit. United Sickness Fund), is Israel's third largest health maintenance organization (HMO). The organization was founded in 1974 as the result of a merger of two other HMOs.

In 2005, Meuhedet took over Misgav Ladach hospital in Jerusalem, turning it into a diagnostic center.Phone: *3833


The word Maccabi (Hebrew: מכבי‎) refers to one of the Maccabees.

It may also refer to:

Maccabi (sports), international sports association

Maccabi Sherutei Briut, an Israeli Health Maintenance Organization

Maccabi youth movement, a Zionist youth movement established in 1929

Maccabim-Re'ut, a former local council in central Israel

Operation Maccabi, a 1948 military operation

List of Maccabi sports clubs and organisations

Maccabee (beer), produced by Tempo Beer Industries

Managed care

The term managed care or managed healthcare is used in the United States to describe a group of activities ostensibly intended to reduce the cost of providing for profit health care and providing American health insurance while improving the quality of that care ("managed care techniques"). It has become the essentially exclusive system of delivering and receiving American health care since its implementation in the early 1980s, and has been largely unaffected by the Affordable Care Act of 2010.

...intended to reduce unnecessary health care costs through a variety of mechanisms, including: economic incentives for physicians and patients to select less costly forms of care; programs for reviewing the medical necessity of specific services; increased beneficiary cost sharing; controls on inpatient admissions and lengths of stay; the establishment of cost-sharing incentives for outpatient surgery; selective contracting with health care providers; and the intensive management of high-cost health care cases. The programs may be provided in a variety of settings, such as Health Maintenance Organizations and Preferred Provider Organizations.

The growth of managed care in the U.S. was spurred by the enactment of the Health Maintenance Organization Act of 1973. While managed care techniques were pioneered by health maintenance organizations, they are now used by a variety of private health benefit programs. Managed care is now nearly ubiquitous in the U.S, but has attracted controversy because it has had mixed results in its overall goal of controlling medical costs. Proponents and critics are also sharply divided on managed care's overall impact on U.S. health care delivery, which ranks among the best in terms of quality but among the worst with regard to access, efficiency, and equity in the developed world.


Mandate may refer to:

Mandate (after shave), British after shave brand

Mandate (criminal law), an official or authoritative command; an order or injunction

Mandate (international law), an obligation handed down by an inter-governmental body

Mandate (magazine), a monthly gay pornographic magazine

Mandate (politics), the power granted by an electorate

Mandate (theology), to some Christians, an order from God

Mandate (trade union), a trade union in Ireland

HMS Mandate, various ships of Britain's navy

Mandate (typeface), a brash-brush typeface designed by R. Hunter Middleton

The formal notice of decision from an appeals court

A requirement for a Health maintenance organization to provide a particular product

Mary Loos

Mary Loos (May 6, 1910 – October 11, 2004) was an American actress, screenwriter, TV writer, and novelist. She was occasionally credited under her full name, Mary Anita Loos.

Born in San Diego, she was the daughter of Dr. Clifford Loos, co-founder of the Ross-Loos Medical Clinic and the Ross-Loos Medical Group, the first health maintenance organization (HMO) in the United States. She was the niece of screenwriter Anita Loos.

She began her career as a publicist in New York before moving out to the West Coast and working as a screenwriter in 1941. She and her first husband, Richard Sale, wrote over a dozen successful screenplays together before divorcing. She was both co-creator and one of the writers for Yancy Derringer (1958-1959), an American Western TV series.

Later in life, she married Carl von Saltza, whom she had met decades earlier while attending Stanford University and had previously been engaged to.Mary Loos died in Monterey, California, aged 94, due to complications following a stroke.

McLaren–Greater Lansing Hospital

McLaren Greater Lansing (MGL) (formerly Ingham Regional Medical Center) (IRMC) is a hospital in Lansing, Michigan. MGL is a subsidiary of the McLaren Health Care Corporation, which is an integrated managed care health care organization operating in Michigan. Both the College of Human Medicine and the MSU College of Osteopathic Medicine at Michigan State University are affiliated with MGLH. In January 2012 Ingham Regional Medical Center was renamed McLaren Greater Lansing.Before being recognized as McLaren Greater Lansing our hospital began as the Ingham County Tuberculosis Sanatorium. McLaren's dedication to the region began in the fall of 1913, when a 10-bed county facility opened its doors to care for those afflicted with tuberculosis.

As Greater Lansing grew over the decades, so did the hospital. Wood and nails became girder and steel, wings became towers, and the 10-bed facility grew into what we are today: a two-campus testament to compassionate care and medical innovation.

As they continue to pave the path into the future of medicine McLaren Greater Lansing has announced the construction of a new hospital. This $450 million dollar investment in the community is slated to open in 2021 and will consist of 9 stories, 18 operating rooms, 40 emergency department beds, and 240 hospital beds.

McLaren Greater Lansing (then Ingham Regional Medical Center) participated in a pilot study of a bundled payment scheme between 1987 and 1989 which involved an orthopedic surgeon and a health maintenance organization (HMO). The surgeon and IRMC received a predetermined fee for any arthroscopic surgery performed, but they also provided a two-year warranty in that they promised to cover any post-surgery expenses instead of the HMO. The pilot study, in which "all parties benefitted financially," is cited as an example of a successful outcome with bundled payments.On July 28, 2011, Becker's Hospital Review listed Ingham Regional Medical Center's orthopedic hospital (now McLaren Orthopedic Hospital) under 60 Hospitals With Great Orthopedic Programs.

Point of service plan

A point of service plan is a type of managed care health insurance plan in the United States. It combines characteristics of the health maintenance organization (HMO) and the preferred provider organization (PPO).

The POS is based on a managed care foundation—lower medical costs in exchange for more limited choice. But POS health insurance does differ from other managed care plans.

Enrollees in a POS plan are required to choose a primary care physician from within the health care network; this PCP becomes their "point of service". The PCP may make referrals outside the network, but with lesser compensation offered by the patient's health insurance company. For medical visits within the health care network, paperwork is usually completed for the patient. If the patient chooses to go outside the network, it is the patient's responsibility to fill out forms, send bills in for payment, and keep an accurate account of health care receipts.


ProMedica is a non-profit health care system with locations in northwest Ohio and southeast Michigan. The system includes a health education and research center, the health maintenance organization Paramount Health Care, nursing homes, a local business network of private practices, and several hospitals About 2,900 ProMedica physicians care for approximately 2 million patients each year.

Rabin Medical Center

Rabin Medical Center (Hebrew: מרכז רפואי רבין‎) is a major hospital and medical center located in Petah Tikva, Israel. It is owned and operated by Clalit Health Services, Israel's largest health maintenance organization. In January 1996, Beilinson Hospital and Hasharon Hospital were merged and renamed Rabin Medical Center. It has a capacity of 1,300 beds.

SCAN Health Plan

SCAN Health Plan (SCAN) is a not-for-profit, Medicare Advantage, health maintenance organization (HMO) based in Long Beach, California. Founded in 1977, they provide healthcare coverage to Medicare beneficiaries throughout the state, currently serving nearly 200,000 members. They are one of the largest not-for-profit Medicare Advantage Prescription Drug plans in the country.

Saudi Aramco Medical Services Organization

Johns Hopkins Aramco Healthcare is the result of a first-of-its-kind health care joint venture between Saudi Aramco and Johns Hopkins Medicine.

Since 1933, Saudi Aramco had delivered a high standard of medical care to its employees and their families through its own medical services organization. In 2013, Saudi Aramco partnered with Johns Hopkins Medicine to carve out and expand the capabilities of its medical services through Johns Hopkins Aramco Healthcare (JHAH), drawing upon the vast expertise of The Johns Hopkins University and The Johns Hopkins Hospital and Health System to provide clinical program development, research, training, safety and quality, and health care administration expertise.[1]

Inaugurated on January 28, 2014, Johns Hopkins Aramco Healthcare is the complex of company-operated and privately contracted hospitals that serve Saudi Aramco employees and their dependents, numbering about 350,000 total. In all communities, basic health care is provided through clinics, which function much as Health Maintenance Organizations do in the United States.

A rotating staff of general practitioners performs examinations and prescribes care on an outpatient basis. All of the clinics have facilities and laboratories for basic diagnostic testing. Each clinic provides ambulance service and emergency room care, and each has a pharmacy where prescriptions ordered by clinic physicians can be filled at no charge. The community clinics are designed to take care of ordinary medical needs. More significant health problems are handled at the Johns Hopkins Aramco Healthcare hospital in Dhahran.The professional staff at the hospital is multinational, but many of the specialists are U.S. Board Certified or the UK's equivalent.

Johns Hopkins Aramco Healthcare Dhahran hospital is accredited by JCI, the newly created international division of JCAH. The blood bank is accredited by the American Association of Blood Banks. The Medical Laboratories have been continuously accredited by the College of American Pathologist (CAP) since 2002.

Liaison relations exist with the World Health Organization in Geneva, Switzerland, and the Centers for Disease Control in Atlanta, Georgia, for immediate consultation regarding diseases of international significance.


It’s been a long journey for JHAH on the road to implementing a truly first-rate Electronic Health Record (EHR) that is capable of supporting its transformational ambitions in being an ever brighter example for quality of patient care in the kingdom. The recently launched patient portal, MyChart, which elevates patient partnership in their own healthcare to a new level, is only the tip of the iceberg when it comes to the anticipated benefits of the new Epic system.

Timeline of healthcare in Nigeria

This is a timeline of healthcare in Nigeria, focusing on modern healthcare system. Major events such as policies and organizations are included.

UAB Hospital

UAB Hospital is a Level I trauma center hospital located in Birmingham, Alabama.

It is located in the Medical Center District on the University of Alabama at Birmingham (UAB) campus on Birmingham's Southside. UAB Hospital is a 1,157-bed facility that provides patients with a complete range of primary and specialty care services. It is Alabama's major tertiary care center and a modern medical complex serving approximately 35,000 patients annually. With 18,750 employees, the hospital is the largest employer in Birmingham and the second largest employer in Alabama. UAB also owns Viva Health, a health maintenance organization.UAB Hospital consists of several clinics and medical centers that offer specialized treatment and care. UAB Medical West has a cardiovascular, Orthopaedics, gastroenterology, OB/GYN, family medicine, and otolaryngology treatment centers. As well, there are satellite clinics operating under the UAB name that can be found throughout Bessemer, Hoover, and Vance, Alabama. These clinics include the Medical West Vance Health Center, Medical West Bessemer Health Center, and Medical West Hoover Health Center.

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