HMOs: Lower Premiums, Added Restrictions - Essay Sample

Introduction

Health Maintenance Organizations (HMOs) are health insurance providers that administer healthcare services from physicians working through their network to subscribers at a monthly or annual fee (Hayes, 2020). The HMOs medical cover is limited to only healthcare providers in contract with them; thus, out of network services are not catered for unless during an emergency. The premiums available in HMOs contracts are lower compared to traditional health insurance but have additional restrictions to the subscribers (Hayes, 2020). For example, the HMO might require an individual to live in a specific geographical area or work in a particular field of services for them to access their services. However, the main objective of HMOs is to improve health services by integrating healthcare providers for their consumers.

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Tools and Features

Low-Cost Premiums

The HMOs signs contracts with healthcare service providers such as doctors, specialists, and medical facilities. Then, parties interested in their services pay a monthly or annual subscription fee to the HMO. Therefore, the HMO acts as a link between healthcare providers and patients. Being the sole payer, the HMO can regulate the cost of medical services as the physicians are sure they will have available consumers for their services. The HMOs also adjusts their payment systems for their premiums with out of pocket or employer-funded payments options. According to research, HMO plans have a 10% to 20% lower monthly subscription fee as compared to other traditional insurance services (“Prevention and Managed Care,” n.d.).

High-Quality Care

The HMOs get into contracts with a variety of medical specialists who offer a wide range of services. The contracts ensure HMOs pay healthcare providers for their services based on the signed agreements, which motivates them to maintain a high quality of medical services to their patients. HMOs insurance covers diagnostic, treatment, and health maintenance services. However, unique medical care may not be available, but the HMOs caters to emergencies.

Primary Care Physician

Every insured individual has to pick a primary care physician (PCP) of their choice from the HMOs network. The PCP acts as a first respondent to all the health-related issues of the subscriber and provides referrals for specific medical cases (Hayes, 2020). A PCP has a better understanding of patients' medical history and offers help efficiently. In cases such as senior health challenges, HMOs use PCPs to monitor the well-being of their patient through routine check-ups. The PCPs are the primary advocates for efficient and organized health systems.

Preventive Services

The primary focus of HMOs is not only to treat their patients when but also to ensure their general wellness; thus, they have incorporated preventive programs in their services. The HMOs use details such as medical history, origin, and working environment to set up preventive measures of any potential health risks (“Prevention and Managed Care,” n.d.). For example, weekly check-ups with a PCP of your choice to diagnose the occurrence of any infection. The preventive programs ensure the maintenance of good health through the treatment of diseases at an early stage. The system is also cheap and effective as compared to treating infections after they have manifested in a patient.

Organized Healthcare

The HMOs provides a functioning connection between healthcare providers and patients with PCPs operating as the first point of contact before giving referrals for particular medical services. The relationship benefits both parties as consumers pay reasonable prices for high-quality care while providers get their salaries from signed agreements. The structure of the HMO network is consumer-friendly and effective. Though limited only to a physician or medical facility in the system, a wide range of services is available for the patients. Furthermore, an individual has the option to change his or her desired PCP to attend to all their medical needs.

Issues and Challenges

Health of Uninsured

The out of the pocket health model only favors the few individuals that can afford to pay the monthly or annual subscription fee. Moreover, each HMO has restrictions on who can access their services. A large population of the country gets medical services from local health departments, which lack adequate funding (“Prevention and Managed Care,” n.d.). Therefore, the HMOs have subjected the uninsured population to second-best therapy or no treatment at all. The marketization of health services by HMOs has led to the provision of premium health services to only a few individuals that can pay for medical care.

Competition for Market

HMOs are business enterprises that seek to make a profit from the provision of healthcare services. The marketing of essential services, such as health tends to degrade the quality of products and services in that sector. An industry that displays potential profits gives rise to competitors for market shares. However, some competitors overlook the well-being of the patients and solely target generation of high revenues (“Prevention and Managed Care,” n.d.). Therefore, they end up providing the second-best services to increase their annual profits.

Out of Network Care

The HMOs do not cater to specialized health care that is not available in their network of physicians or medical facilities. With the current emergency of rare genetic diseases, one must always consider other health insurance providers if he or she is at risk of acquiring infections that require specialized care. Furthermore, HMOs have not stipulated the cover for emergencies during pandemics. Recently, the outbreak of the Coronavirus has exhibited the inadequate response of HMOs in cases of an emergency. Affected subscribers have lacked proper care due to their insufficient planning and administration by the HMOs when needed the most.

Population Growth

The rapid increase in population significantly raises the number of new health insurance subscribers annually. The rate is very high compared to the available healthcare providers; hence future projection predicts an overload to PCPs (“Prevention and Managed Care,” n.d.). High demand and surplus consumers are great for the HMOs because of the ready market shares, but it also degrades the quality of health services provided. The already deteriorating local health department will have to attend to more people with limited resources. Moreover, the organized HMOs system will fall apart due to overworking health providers and unsatisfied consumers. The ever-rising population demands countermeasures to maintain the health of the whole community. Cooperation between the private and public health sector is essential to achieve this objective.

Conclusion

HMOs have taken the role to ensure the well-being of a healthy community through the provision of a wide range of healthcare providers in a single network. Though still facing numerous challenges, HMOs subscribers have access to premium care at a low cost; thus, significantly improving the general health of the community. Currently, a good number of individuals have access to proper medical care thanks to the HMOs established in the country. However, one cannot ignore the concerning health of the uninsured people who are the majority of the population. The second-best therapy or no treatment is not good enough when it comes to the health of society. Therefore, HMOs and public healthcare investors have to integrate their services to sufficiently improve the healthcare system in the country.

References

Hayes, A. (2020, February 5). What you should know about health maintenance organizations (HMOs). Investopedia. https://www.investopedia.com/terms/h/hmo.asp

Prevention and managed care: Opportunities for managed care organizations, purchasers of health care, and public health agencies. (n.d.). CDC. Retrieved May 14, 2020, from https://www.cdc.gov/mmwr/preview/mmwrhtml/00039850.htm