Health_Care_Evolution

The Evolution of HMO HCS 310 July 11, 2011 The Evolution of HMO Health Management Organizations (HMO) is a prepaid health care coverage. In a HMO health care coverage plan, the patient picks a primary care physician (PCP) who takes complete care of the patient’s medical needs. This PCP has a contract with HMO and has to follow the HMO regulations. In the case the PCP is not qualified to treat a specific need, he will refer the patient to a specialist. This type of coverage was thought to be started in Two Harbors, Minnesota. A railroad community had two doctors retire and leave them without any health care service. This prompted the community to buy the hospital from the railroad and create the Community Health Association in 1944. This became the model for today’s HMO’s, but this is not the first of its kind. In the history of health care there have been programs similar to the HMO coverage, which helped mold the HMO’s of today. The first example of an HMO was seen in 1910 in Tacoma, Washington. A limber mill and their employees prepaid for health care services each month. Then in 1929 Ross-Loos Medical Group provided medical services to the Las Angeles Department of Water and Power and Las Angeles County employees for a premium every month. This prompted the fire and police departments to enroll within the year. By 1951, Ross-Loos had 35,000 people enrolled in their prepaid medical program. In 1982 Ross-Loos Medical Group became CIGNA Health Care with the merger of Insurance Company of North America and Connecticut General. (Wikipedia, the free encyclopedia, 2011) In the early 1960’s Dr. Paul M. Ellwood formulated the prepaid health care plans in which doctors and professional staff operate and administer the health care services in conjunction with HMO. Then in 1972 Dr. Ellwood preformed a pilot program that involved 5000 patients from area corporations in Minnesota to test his concept. Then in 1973 the Health Maintenance Act was passed by Minnesota Legislature. HMO is defined as a “non-profit organizations, providing comprehensive health maintenance services in exchanged for a fixed prepaid sun, regardless of frequency or extent of care required.” (Minnesota Historical Society, n.d.) There are three provisions required from the Health Maintenance act of 1973. One was for the HMO to start or expand it had to use grants or loans to do so. Another was the state restrictions were voided, and the HMO was federally certified. The last prevision was employers with more than 25 employees had to offer its employees a federally certified HMO plan. This provision did not go into effect until 1977 and cause the HMO to grow very rapidly, because they had access to critical employer-based market. Then in 1995 it was abolished. Today there are different types of HMO’s. HMO is based on the different models. Many HMO’s combine different aspects with different models. In the staff model the physicians are directly employed by HMO and only see HMO patients. This is called a closed-panel. A closed-panel is that of contracted physicians only work with HMO patients. The group model is another HMO model, where the physicians are not employed directly by HMO. Here the physicians are employed by a group and not HMO, but the group may be directly employed by HMO. When this is the case, it is called a “captive group model.” Then when HMO contracts, but does not employ a physicians group is known as an “independent group model.” In this model physicians see non HMO patients. In addition to the staff and group models there is the network model. This model gives the patient and the physician some flexibility. In this model the HMO will contract with any combination of Independent Practice Associations (IPA) and individual physicians. Here the patient can see any doctor within the network and be covered. The physician can also refer the patient to anyone within the network even if he is not in the group or staff models. The HMOs health care has a negative image because of their strict regulations. In reality the HMOs are designed to help patients obtain quality and comprehensive health care. In 1910, employees paid a premium each month for certain medical services. Then in 1929 Ross-Loos Medical Group offered Las Angeles Department of Water and Power and Las Angeles County employee’s medical services for a premium. As Ross-Loos Medical Group grew, they merged with Insurance Company of North America and Connecticut General to form CIGNA Health Care a HMO insurance in 1982 nine years after the Health Management Organizations Act of 1973. Dr. Paul M. Ellwood formulated the HMO in the early 1960’s and conducted a pilot in 1972. This pilot is what started the push for the Health Management Organizations Act of 1973. With this act in place people were able to get the health care they needed for a prepaid price. It did not matter what type of care or how often the patient saw the doctor. In 1995 the provision for all companies to offer a federally certified HMO was abolished. Today there are different types of HMOs to fit the need of both the physicians and the patients. They have staff, group, and network models. Even though the models were designed to help both the physician and patient to get quality and comprehensive medical there is still negative view about HMO’s. Many people if financially able will choose an insurance plan that is not HMO. They feel there is too much run around with the HMO, and they cannot see who they want when they want. Then when they need to go see a specialist they have to be with a HMO physician who may not be the best. Physicians also choose not to accept HMO patients because they only paid a flat rate for each HMO patient. Not only do they get less money for each patient, the physicians have to treat or refer the patient for all their medical needs. In order for the physician to refer a patient to a specialist he has to follow the guidelines set forth by HMO. Even with all the negativity HMO is good alternative health coverage. It may be hassle for some people, but everyone gets the same care no matter what type of insurance they have. References Minnesota Historical Society. (n.d.). Health Maintenance Organizations. Retrieved from http://www.mnhs.org/library Wikipedia, the free encyclopedia. (2011, June 30). Health maintenance organization. Retrieved from http://en.wikipedia.org