The Problems With Hmos
Sarah Cay Bradley
English 320
May 20, 1999
The Problems With HMOs
It was no surprise when I interviewed my English class about HMOs, that out of 13 students, seven currently having HMO coverage, 77% felt HMO healthcare inferior to traditional insurance. This group closely represents the U.S. population, as HMOs have become practically synonymous with health care and the idea that Americans are no longer receiving the quality care they received from unmanaged plans. Managed care plans have succeeded in dramatically cutting the rate at which medical spending in the United States has been growing. Does it matter that 100 years after Lincoln freed the slaves that we have found another way to trade lives for money? HMOs have introduced an innovative way to provide health services: incentives for doctors not to treat patients. The less a physician practices, the more the company makes. HMOs make money by not providing a product. (Physicians Who Care, Internet 1999).
What exactly is an HMO? HMO is an acronym for health maintenance organization. An HMO is an organization that provides comprehensive health care to voluntarily enrolled individuals and families in a particular geographic area by member physicians with limited referral to outside specialists and that is financed by fixed periodic payments determined in advance. (Merriam-Webster’s Dictionary-1996) Sometimes considered a new concept, HMOs have been around since the 1930s. The difference today is that consumers are being nudged into them by their employers, in an attempt to hold down costs, and out of traditional insurance plans, in which the insurer reimbursed the patient directly and covered most of the cost of medical treatments. To encourage consumers, the HMOs promote their preventative services. Since the HMO has the patient’s money up front, it is important for them to keep the patient healthy. (Sinclair Community College-1999) An HMO can also be described as what seemed like a good idea at the time, but quickly became a concept out of control, thanks to medical bureaucracy, and just plain greed.
At the beginning of the 1990s, there were nearly 600 HMOs across America and they were regarded as a practical alternative to escalating medical costs. By 1998, it was clear that HMOs were out of control, leaving a trail of angry and neglected patients in their path. Physicians have also begun speaking out against HMOs in increasing numbers. According to Dr. Daniel J. Esposito, the main problem with HMOs is that, there are no economic incentives to take care of people. The incentive is not to do anything (More Trouble With Managed Care PG).
What happened? How could something, which started out so promising, have gone so terribly wrong? In a survey conducted by Harvard University in conjunction with the Kaiser Family foundation, it was revealed that 51 percent of Americans polled believe that HMOs are responsible for the deteriorating quality of their health care. Fifty-five percent expressed concern that HMOs were more preoccupied with cost-cutting measures than with providing the best possible medical care for the patients they serve (The HMOs Image Problem; Public Distrust Can be Cured By Ensuring Patient Rights 8). This certainly does not sound like the all-purpose solution to quality and affordable medical care the government was looking for when it began addressing the issue of a national citizens’ health plan back in the 1960s.
What has sparked this widespread public mistrust of HMOs? Part of the problem has been the exceptional growth of HMOs during the 1990s. By 1996, HMOs boasted a membership of 110 million enrollees, a figure four times higher than 1986 (Evans). The federal government’s attempts at reform have only added fuel to the growing fire. With their ineffectual price controls and budget slashing, the bottom line is that people are receiving less health care instead of more — hospital stays and specialist referrals are kept at a minimum to defray costs (Evans).
This leads to the question, if people are so unhappy with the cost and quality of HMOs, why are they continuing to sign up in record numbers? It should be understood that, first and foremost, an HMO is not a public service organization. HMOs are in business to make money, and the more people they can enroll, the greater the profit.
