Concerns in HMO Industry

Each patient is a unique individual who merits an appropriately tailored process of care (Sanderson, 1995). Growing participation in HMOs may result in reduced quality of medical consideration. Advantages and disadvantages of HMOs are reviewed. Problems, alternatives, and implications for health administration within the HMO system are discussed.

Concerns over growing health care costs have resulted in alternative delivery systems advocating managed care. Percentage growth in health maintenance organization (HMO) membership throughout the 1980s was 32 million or 13 percent of the United States population. The HMO industry continues to experience difficulties and criticisms from physicians, the business community, third party payors, Congress, federal regulators, hospital executives, labor unions, and patients. Deficiencies are listed as low quality, poor management, interference with physician autonomy, inability to contain costs, lack of access to the poor or elderly, and restraint of trade (Widra & Fottler, 1992).

Advantages and disadvantages of HMOs are listed. Advantages include the following: medical costs are decreased; preventative medicine is provided without additional cost; all treatments, hospitalizations, and medications are provided with no or minimal fee; primary care physicians can be selected; and the potential exists to provide care to everyone in the United States. Disadvantages include the following:

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bankrupt increased from five or six in 1986 to 30 in 1987. These changes are attributed to increased competition as well as the problems experienced. Hybrid models study the features of managed-care systems, capture the positive and minimize deficiencies, and demonstrate implicated modifications needed for the future HMO. One particular hybrid is the corporate model IPA-HMO (individual practice association-model HMO), Complete Health; this is an IPA-model HMO with a federally qualified subsidiary. Founded in 1986, it was sponsored and backed financially by the University of Alabama Health Services Foundation and a group of businessmen. In spite of substantial competition, Complete Health possesses the largest current HMO enrollment and growth rate of enrollment, in Alabama; it provides an example of a successful HMO (Widra & Fottler, 1992). The success determinants of Complete Health are of interest for the future prosperous development of other HMOs. The Complete Health model was designed with input from a comprehensive managed-care literature review, industry consultants, and a collection of operational experiences from across the nation. Flexibility is considered a core strength; it is expressed throughout the everchan

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