The Concept of HMO & Pros and Cons of Introduction of the concept in a Population


What is Health Maintenance Organization (HMO)?

To start off, HMO refers to a public or private organization which provides the members of the organization with basic health service support on the basis of a fixed monthly or annual fee. HMO holds a network of physicians under its coverage and offers a lower surcharge to its members since the service providers have the advantage of having patients directed towards them.

The health/service providers enter into the organization’s network by signing up contracts with primary care physicians, specialists and clinical facilities. Following the initial sign up, they are paid an agreed fee for the services they are to provide the members of HMO.

HMOs also cover emergency care services despite the contract status of the service provider which also includes ambulatory care and inpatient hospital services.

What are the functions of HMOs?

The members are often required to choose a primary care physician and a doctor to directly access the medical services. In emergency situations, a reference from the PCP may also be needed if they are to see a specialist or a doctor. In contrast to that, certain services such as screening, mammograms do not need any referrals.

The members usually get his/her health care services from the health providers under the HMO network but sometimes out of network medical care can also be conducted by HMO. Such services include emergency care & dialysis. If the suggested physician or doctor leaves the HMO network, the member will soon be notified of the departure and will have to choose another health provider.

The combination of “open access” & “POS” products are a big part of the HMO & traditional indemnity plan. Patients using the gatekeeper system will receive HMO benefits but these traditional benefits will be withheld if the member skips the gatekeeper before consulting a specialist as for. Doctors are continually monitored on their performance and services by HMOs too.

The members may be required to live or work under the network coverage area of the HMO to enjoy the benefits. But in case of an emergency outside the region of the HMO, the expenses would be covered as opposed to any nonemergency cases which will then have to be paid by the member.

To make HMO plans affordable for all members, copayments are introduced to the community. This copayment is a certain amount charged for each clinical visit, tests or prescriptions. These payments are as low as $5 but may rise up to $20 or so according to the service. The process of copayment minimizes the extra expenses borne by the members.

Some more choices are case management and disease management where certain diseases such as diabetes, asthma or signs of cancer are identified. HMOs take a great level of care to assign the appropriate service to their members.

Types of HMO policy and some examples

HMO policies are not fitted into one form. They have different models, at times even blend into different combinations. They also work in a variety of forms and some of them include the staff model, group model and network model.

In the staff model, physicians are direct employees of HMOs and work in the HMO buildings. The group model, also an example of closed panel HMO is a system where rather than being employed by HMO, physicians are hired by a physician group practice who serve their purpose of giving health treatments to the HMO members.

It’s not always necessary for the employees to be already engaged in a certain medical group practice. They can also contract using an independent practice association which later on contracts with the HMO. This can be an example of open panel HMO.

In the network model, it’s a broader combination where an HMO can sign contracts with any combination of groups, IPAs, and even individual physician.

Introduction of HMO concept in a population

HMOs often have a negative public image due to its restrictive characteristics but what we should realize is that HMOs are examined across population subgroups and defined by health status, income, race, and age. Currently, operating HMOs range from 3,000 to over 1,000,000 enrollees in size and even include university faculty to Medicaid recipients.

What’s more interesting is that the concept of HMO is very heterogeneous which treats a defined population on a prepaid basis.

Introducing the concept of HMO in a population is sure to incite a surge of pros and cons. Some of them are briefly discussed down below:

PROS:

  • Health insurance HMO surcharge are most likely to be lower than those of other health insurance
  • A group of well-monitored doctors and physicians are readily available under the network coverage of HMO
  • HMO mainly offers a healthy lifestyle which may sometimes include cash rewards for exercising, eating healthy
  • It highly focuses on awareness and prevention, thus giving out opportunities to the members to remain healthy for the foreseeable future
  • HMO enrollees are less likely to face financial barriers
  • The HMO plan does not require claim forms while visiting a doctor or hospital
  • A known amount of revenue is guaranteed and the patient population number is fixed
  • Providers get paid each month to cover cost of care if services are less than the revenue enhancement
  • HMOs are pointed towards individuals & families who do not seek many medical services on a daily basis
  • Big hospitals are joining HMO plans which are making the facilities much better
  • Members don’t have to pay any deductible which is a great initiative

CONS:

  • A lot of hassle can take place before seeing a specialist because members require prior approval. The overall process is quite time-consuming and may feel like an added burden for the members who are in a hurry
  • Some HMO health providers can be restrictive. If the members use health care facilities outside HMO network, the members need to spend out of their own pocket.
  • The members need to live or work under the network coverage of the HMO otherwise the member won’t receive HMO benefits
  • In traditional health insurance, members have the freedom to pick any doctors or specialist as they wish but in HMO, members have to choose from a specific list of health providers
  • The surcharge paid is just close enough to cover costs of the health providers
  • HMOs require members to copayment with each visit and these costs can add up quickly
  • The members have to stick with the specified consultant until one gets referral from PCP
  • A study conducted in 2007 has founded that not all HMO enrollees were not fully satisfied with the quality of their health services and doctor-patient communication
  • HMOs can check your personal record which arises the issue of privacy regarding their policy
  • There are some limitations in the services and costs offered by HMO

Despite all the cons and drawback relating to the HMO policy, it is still being considered a guaranteed successful idea. Not only does HMO provide you coverage for health care, moreover, HMO policy gives members a surety for better medical care within ones reach which can be a revolutionary turning point for medical care. In the future, it is expected to be adapted by most population and even taken up by different organizations!

References:

http://blog.unityhealth.com/blog/pros-cons-health-insurance-hmo-wisconsin

http://www.tfwinsurance.com/hmo-ppo-and-pos-pros-and-cons/

https://en.wikipedia.org/wiki/Health_maintenance_organization

https://www.investopedia.com/terms/h/hmo.asp

https://books.google.com.bd/books?id=_neYkFIBkNgC&pg=PA1&lpg=PA1&dq=hmo+concept&source=bl&ots=V_PxfdJg03&sig=l11CU-D57fjgJRm7Z1lLXY1H-Ao&hl=en&sa=X&ved=0ahUKEwiJ_brL3ovYAhUBJJQKHbXbDmEQ6AEIbjAO#v=onepage&q&f=false

https://www.ncbi.nlm.nih.gov/pubmed/10711312

https://insuranceinfoandfacts.wordpress.com/2012/06/12/the-pros-and-cons-of-ppo-and-hmo-health-insurance-policies/

https://www.ncbi.nlm.nih.gov/pubmed/10302008

https://www.nuemd.com/blog/health-maintenance-organization-hmo-look-managed-care

https://www.finweb.com/insurance/the-advantages-and-disadvantages-of-hmo-insurance.html

http://www.csus.edu/indiv/h/heflintl/group/section-1/group-5/website/advantages_and_disadvantages.htm

https://www.coursehero.com/file/13728549/Advantages-of-HMOs-are-that-a-known-amount-of-revenue-is-guaranteed-and-the-patient-population-numbe/

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