HMOs are unique types of health care organizations
The HMO plan is a staple in contemporary health care. HMOs, or health maintenance organizations, are healthcare systems that both finance and deliver healthcare to the patient. HMOs are designed for maximum efficiency. Containing costs is an important theme in the operation of HMOs.
Quality Control and Costs
Quality control is vital in an HMO health plan. Quality control refers to the functions and processes through all stages of healthcare. An HMO will try to reduce costs by making patients see a limited amount of doctors, reducing the number of covered prescriptions, and selectively employing their physicians. Restricting a patient to certain doctors and generic prescriptions does not necessarily reduce their level of care, however.
How it Works
An HMO will accept a beneficiary for a standard monthly fee. The HMO is then responsible for the healthcare of that individual. When the beneficiary does not utilize the services of the HMO during a particular month, then the HMO profits. However, if the beneficiary utilizes the HMO constantly during the month, than the HMO may lose money. The HMO creates a fee that considers monthly use and costs.
Financing Health Care
One of the roles of the HMO is to act as an insurance company. The HMO will fulfill the roles that a traditional insurance company does. By avoiding a third party, the HMO saves significant amounts of money. A third party could be thought of as a intermediary between the patient and healthcare facility. In an HMO, instead of the patient paying one company that then pays another, the middle person is cut out. These costs savings allow the HMO to be profitable while providing low-cost rates to their beneficiaries.
Delivering Health Care
The other aspect of an HMO is that it actually delivers the healthcare by employing physicians provide it directly to the patient. HMOs may have a wide range of equipment and employ different types of physicians such as primary care, orthopedists, obstetricians and gynecologists. Most other insurance companies are limited to reimbursing the healthcare facility rather than running it.
Types of HMOs
The HMO has been constantly evolving since its creation. There are now several different types of HMOs, which are structured differently from one another. The staff model HMO employs individual physicians to provide services and usually contracts subspecialists for infrequently needed services. In the group model, the HMO will contract with a group of different physicians that provide services for the HMO's patients. The network model is similar to the group model but will contract with several group practices. Independent practice association models contract with an association of physicians, which is an entity that will work for the HMO. The direct contract HMO will contract with individual physicians within the community to provide services for their beneficiaries. This is also the most common type of HMO plan. Although the relationship between the HMO and the physicians can vary widely, patients still receive the same level of care.
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