Issues Confronting HMO Management

Description of the issue. Changes health care system (financial responsibility shifts, technological medical advances, and medical care rationing) are among the factors that are driving health care providers of all types toward affiliations with HMOs and other health care networks (Tong, 1995, p. 165). Such affiliations are formalized through participation agreements.

A participation agreement within the context of this discussion is a contract between two or more parties involved in the delivery of health care services to patients. Such a contract spells out the rights, responsibilities, and procedures that govern the actions of the parties in the delivery of health care to patients.

Implications of the issue for management. In order for an HMO to function, the organization must negotiate the terms of associations both within the HMO and between the HMO and other health care providers. Participants in health care affiliation negotiations frequently are distrustful of the mot

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ys directly for the services, is considered to be the purchaser of the services. In turn, of course, the health insurance company (in theory at least) must satisfy the policy holders. Policy holders, however, tend to be the junior partners in their contracts with health insurance companies. Similarly, as government has become involved in paying for health care services for some population groups, government has become the health care purchaser that must be satisfied. Implications of the issue for management. With the growth of managed care, the direct payers for health care services·health insurance companies, government, and employers·increasingly become the purchasers of health care services that must be satisfied by health care providers such as HMOs. Thus, HMOs increasingly are characterized by a purchaser-oriented management as opposed to user-oriented management in which the emphasis is placed on directly satisfying the patient. The term "purchaser-oriented management" as the term is used in this research refers to the practice by the payers for health care services to attempt to influence (almost direct) the ways in which health care is delivered. This approach becomes increasingly important within a managed care
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Approximate Word count = 2177
Approximate Pages = 9 (250 words per page)

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