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Running Head: HEALTH MAINTENANCE ORGANIZATION1Health Maintenance OrganizationSindiswa AkinboKeller Graduate School of ManagementHSM546: Health Insurance and Managed CareSpring, 2018
HEALTH MAINTENANCE ORGANIZATION2Health Maintenance Health OrganizationHealth Maintenance Organization (HMO) is one of the three primary types of managed care organizations. It was enacted in 1973 during President Nixon’s Administration to answer calls on healthcare reform. It provided organizations with ways of taking care of their employee’shealth care needs by negotiating lower-costs with physicians, hospitals, and/or clinics. They havetheir own contracted physicians and other health care providers that meet specific standards, and who will have agreed on lower-costs for any services they provide. (Kongstvedt, 2013). Health Maintenance Organizations (HMOs) have different types of plans and benefits for its members. The commonly recognized models of HMOs are closed-panel (staff, group or network) and open-panel (independent practice association (IPA). It is paramount that members review their health insurance and medical insurance choices to make sure that they meet their numerous circumstances. For this paper, concentration will be on capitation problems encounter by members enrolled under closed- and open-panel Health Maintenance Organization plan. Problem StatementIn a case reported in Sacramento, California…an eighty-eight (88) year-old woman was suffering from kidney problems. The medications and treatment provide to her proved to be ineffective, and she needed dialysis. The doctor was aware that dialysis would be the right choicefor this woman to keep her alive for a number of years, and also he knew that it will cost Health Maintenance Organization a sum of $40,000 a year. This particular doctor’s annual bonus was contingent on the cost of care he provided to his patients. He knew that if he prescribed dialysis, he would reduce his income. So he did not prescribe dialysis and as a result, the woman died.
HEALTH MAINTENANCE ORGANIZATION3This story indicates how the impact physician payments, high cost for health care services, and resources controlled by or influenced by an individual doctor, has on patient’s health. It is crucial for people to have an understanding of their health care plan, and what prompts physician payments. Let us look at the Closed- and Open-panel HMO models and how they operate.Closed-panel Health Maintenance Organizations tend to be the most restrictive type of managed care. Members are expected to have a Primary Care Physician (PCP) within the Health Maintenance Organization (HMO) healthcare providers. If a member needs care of a specialist, he/she must first see his/her Primary Care Physician who will refer the patient to a specialist within the Health Maintenance Organization providers. This increases the referrals to the alreadyoverburden and limited providers on the network, and creates inefficiencies and delays for the subscribers.

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