Health Maintenance Organizations
An HMO is an organization that offers managed care for health insurance contracts as a liaison with health care providers such as doctors, hospitals and more. This is a type of health insurance plan that gives you access to a network of doctors and hospitals. Initially, most HMOs require that its members select a physician as their primary care provider (PCP) from a network of doctors who will direct their access to medical services. Your PCP will serve as your personal physician and provide all your basic health care services. Women can also opt for an obstetrician or gynecologist for their medical care. Whenever you require the services of a specialist physician or need some special tests to be done, your PCP will give you the referral.
HMOs offer cheaper health care in two ways. Firstly, by contracting with specific health care providers and handling a number of patients, the HMO can negotiate a more affordable health care service for its members. Secondly, HMOs will eliminate unnecessary treatments and focus on preventative health care eyeing long-term well-being of its members, thereby reducing the health care costs.
According to a research, it was found that the private HMO plans aren’t achieving any considerable cost savings over other plans. It is found that, the out-of-pocket expenditure of consumers is reduced, but the plan does not have any effect on the overall expenditure by the insurers.