Word: hmo
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Dates: during 1980-1989
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...costs have risen, the past decade has seen an explosion in prepaid, "managed" care. More than half of all physicians work in some kind of group practice, most commonly a health-maintenance organization. Patients pay a flat annual fee in exchange for care that is provided by HMO member doctors. As private corporations, many HMOs can be quite profitable -- so long as their patients do not get too sick. The number of patients enrolled in HMOs has doubled in the past five years, to 32 million, often at the urging of cost- conscious employers. The goals: efficiency through greater competition...
Physicians and patients who are not part of an HMO have found their lives affected too. The government (as the largest health insurer) and the private insurance companies have tried to cap medical costs by deciding in advance how much a particular treatment should cost and balking at anything above that amount. Many doctors can no longer decide how often they see a patient, when one can be hospitalized, or even what drugs may be prescribed. Those decisions are now in the hands of third parties, hands that have never touched the patient directly...
This change may cost some physicians as much as $40,000, driving some to set up new practices in other states, others to join self-insured medical care clearinghouses, such as Health Maintenance Organizations (HMO), and some may protest their financial troubles by going on strike, according to area physicians...
Corporations are especially fond of the concept, which helps them as much as their employees. Ford Motor Co.'s employee insurance program has offered HMOs since the early 1960s. Although only 8% of its employees are now enrolled in HMO programs, Ford will save an estimated $5 million in medical benefits this year...
...course, in the pay-any-price world of escalating health-care costs, even the most careful of HMO budget projections can quite unexpectedly boomerang. Last year, for example, the total operating budget for the Boston-based Harvard Community Health Plan was $65 million. But an unanticipated midyear spurt in hospital admissions, combined with higher than expected rate increases for services by the hospitals, wound up producing a cost overrun of $4.9 million for the plan. The Harvard HMO was forced to boost its premium 18% over last year's level. About a half-dozen other HMOs around the country...