Introduction
Health Maintenance Organizations (HMOs) have been a part of the US healthcare system since the 1960s and have evolved in response to changing social, economic, and political issues. HMOs are managed care plans that provide comprehensive and coordinated care to enrollees in exchange for a periodic payment. As HMOs have become increasingly important components of the US healthcare system, they have been shaped by social, economic, and political forces. This essay will discuss the social, economic, and political factors that have shaped the HMO as it is known today and will consider how the advocacy model could help HMOs and managed care organizations (MCOs) survive.
Social Factors
The social forces that have shaped HMOs and MCOs are primarily related to the increasing demand for healthcare services and the rising cost of healthcare. The demand for healthcare services has been fueled by an aging population, advances in medical technology, and the increasing prevalence of chronic diseases (Immershein, 2019). Several factors, including the rising costs of labor, equipment, and medications, as well as the increasing utilization of healthcare services, have contributed to the rising cost of healthcare.
In response to these societal influences, HMOs and MCOs have sought to reduce expenses while maintaining the standard of care. HMOs and MCOs have employed various cost-minimization strategies, including utilization analysis, managed care agreements, and utilization management programs. These tactics have helped HMOs and MCOs control spending while maintaining the quality of care.
Economic Factors
On the economic front, the HMO model was viewed as a means to reduce costs for employers, as it enabled them to offer comprehensive coverage to their employees at a fraction of the cost. Other economic factors influencing HMOs and MCOs are primarily linked to the evolving structure of healthcare funding and payment systems. Healthcare financing has shifted from a fee-for-service system to a system of managed care, in which payments are based on a predetermined rate (Abraham et. al. 2022). This shift has increased competition among healthcare providers, putting pressure on HMOs and MCOs to control costs while maintaining quality care.
In response to these economic forces, HMOs and MCOs have implemented various cost-containment strategies, such as pre-authorization, utilization review, and provider networks. These strategies have enabled HMOs and MCOs to contain costs while maintaining quality care. Additionally, the HMO model relies heavily on risk-sharing (Hayes, 2022). The HMO can keep costs low while providing quality healthcare services by pooling resources and sharing risk among providers, insurers, and patients.
Political Factors
The political factors influencing HMOs and MCOs are mainly connected to shifts in the regulatory landscape. The passage of the Health Insurance Portability and Accountability Act (HIPAA) in 1996 introduced new regulations that have significantly impacted HMOs and MCOs (Falkson & Srinivasan, 2023). These regulations have increased the administrative burden for HMOs and MCOs, as well as the cost of coverage.
In the face of these governmental influences, HMOs and MCOs have implemented numerous tactics to comply with the mandates, including establishing systems to catalog patient records and instituting regulations to ensure patient confidentiality (Mars, 2019). By utilizing these strategies, HMOs and MCOs have maintained compliance with regulations while preserving the quality of care.
Response to External Forces
Over the years, the HMO model has evolved in response to various social, economic, and political factors. For example, in recent years, employers have widely adopted the HMO model to reduce healthcare costs (Hayes, 2022). Additionally, the government has utilized the HMO model to provide coverage to low-income individuals and families. Ultimately, private insurance companies have adopted the HMO model to offer comprehensive coverage to their members.
The advocacy model has been utilized in HMOs and MCOs to help reduce costs and enhance the quality of care. This model is beneficial because it encourages providers to focus on preventative care, which helps to reduce costs. The model also encourages providers to become more involved in their patients’ care, which can help build relationships among the patient, their family, and the care team (Mars, 2019). This model enables providers to better collaborate with their patients, taking into account their individual needs and concerns.
Conclusion
To conclude, social, economic, and political influences have shaped the HMO as it currently exists. HMOs and MCOs have employed a range of techniques to reduce expenses and comply with laws while maintaining the quality of care. The advocacy model could help HMOs and MCOs remain viable by encouraging patient involvement and engaging stakeholders in policy debates. By involving stakeholders in policy conversations, the advocacy model can help HMOs and MCOs enact regulations that ensure access to high-quality care for all.
References
Abraham, S., Townshend, G. & Mikula, A. V. (2022). Health care law: A practical guide. LexisNexis.
Falkson, S. R. & Srinivasan, V. N. (2023). Health Maintenance Organization. National Library of Medicine. Web.
Hayes, A. (2022). Health Maintenance Organization (HMO): What it is, pros and cons. Investopedia. Web.
Immershein, A. W. (2019). Challenges and innovations in U.S. health care. Taylor & Francis.
Mars, L. (2019). Guide to U. S. HMOs and PPOs 2020. Grey House Publishing.