The Healthcare Industry of America: An investigative look at HMO's
It's no secret that Health Maintenance Organizations, known as HMO's, have made healthcare affordable for many Americans, but at what risks? Most employers offer some type of health care plan that is an HMO. Let's face it, given the choice among insurance coverage through your employer, in which he pays half the costs, or acquiring private insurance coverage outside your employer, most Americans choose to go with employer-provided HMO's. Why then, has there been so much controversy with HMO's?
An HMO is an organization whereby the subscriber, or patient, is allowed to choose a medical provider from a list of doctors within a certain medical group. Each physician has signed a contract to see patients at a reduced rate. This type of plan does not allow the patient freedom to see just any doctor. All referrals to a doctor, other than the patient's primary care physician, must be approved by both that physician, and the insurance company. Most physicians add HMO's as a supplement to their practices. With HMO's, the patient has little or no co-payment depending on how the plan is set up. Most HMO co-payments range between $5 to $15 dollars per office visit. The doctor, may receive half or less than half of his normal fee from the insurance companies. HMO's are characterized with the tendency to over or under treat patients. HMO's put limitations not only on the income of the provider, but also on the type of treatment that may be done. If a patient is in need of a specialist for a specific ailment, the insurance company has to review and approve a referral and deem it necessary. The process involves the patient going to his or her general practitioner, also referred to as primary care physician, to obtain referral. After this, the primary doctor submits referral to the insurance company and from there it must approve. This process could take weeks due to cumbersome paperwork and the limited number of specialist per each group or health plan. Again, many doctors only accept these plans to supplement their practices. It is common for them to stop accepting your HMO after only a few years which leaves the patient a choice of either paying cash, or changing doctors or insurance companies. One can see why this might be a frustrating process.
Managed care reduces cost by keeping a pool of doctors and specialist to a minimum, and at the same time keeping the volume of patients high. This often means that a patient may not receive the same amount of attention and care as they should, or were accustomed to. Consumers have long grumbled that HMO's have done too much too keep health costs down by stinting on patient care.(1).
Healthcare expenditures have more than doubled since 1965. Americans spend over a trillion dollars a year on health care. (2). As of 1996, 110 million Americans were enrolled in HMO's. More than three-fourths of all individuals in HMO's are covered by...