Health Maintenance Organizations


November 10, 2012 by astancilwomack

Many individuals have Health Maintenance Organization plans, commonly referred to as HMOs, but rarely do they understand what that means. I am going to explain the basics of these plans, and why understanding these plans are important to both patients and providers.

HMOs main purpose is to promote wellness through prevention. HMO insurance covers most preventative care such as wellness exams, vaccinations, and diagnostic screenings. The federal government stepped in to help promote HMOs by passing The Health Maintenance Organization Act of 1973 . This act mandated that companies with 25 or more employees must offer a HMO as one of their choices in healthcare coverage.

These plans are generally cheaper, and require less out-of-pocket costs for the patient. HMOs usually only require the patient to pay co-payments, which are pre-set according to the type of service rendered. Unfortunately for the providers, the plans are cheaper because they pre-negotiate fees with the providers at significantly reduced prices. Because these are pre-negotiated the patient must see providers that are contracted, also known as in-network providers. On the positive side for the primary care providers (PCP) the patient is required to see their PCP before consulting with any other physicians. This allows the PCP to make all decisions regarding the patient’s healthcare, and it allows the patient to feel safe because their primary care physician can get a better picture of their overall health in order to make the best clinical decisions.

Health Maintenance Organizations are actually great for promoting Patient Centered Medical Homes because of the one-on-one provider patient relationship. I’ll be explaining the Preferred Provider Organizations (PPOs) tomorrow, so be sure to stay tuned.



One thought on “Health Maintenance Organizations

  1. […] I mentioned in yesterday’s post, I am going to give an over view of another insurance type, Preferred Provider Organizations also […]

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Mandy Stancil-Womack

My name is Mandy Stancil-Womack. I am interested in pursuing a career in medical management. I am learning as much as I can in order to start my career. This page allows me to explore different aspects of medical administration.

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