The most obvious advantage to belonging to an HMO is cost. The premiums of managed care are usually lower than traditional health insurance, so that these plans tend to be very attractive and a significant amount of employees will choose them. Usually there are a wide selection of physicians and hospitals on HMO plans and employees feel that if they are able to get the current amount of health care at a substantially reduced price, then it benefits them. According to A. Foster Higgins & Co. Inc. , a Washington, DC, employee consult- ing firm, employers paid nearly 9.
5 percent less in 1994 per employee per year for HMO coverage than for traditional medical insurance (Henricks, 1996). Second, HMO’s offer a variety of care and that includes preventive medicine. They often provide preventive care for a lower copayment or for free, in order to keep members from developing a preventable condition that would require a great deal of medical services Third, HMOs require only a small co-payment, meaning employees’ expenses are lower. This is far less expensive than the usual 80 percent reimbursement of traditional health care insurance. Disadvantages
But there are disadvantages as well. What most people dislike is the requirement that you use only doctors and hospitals that are part of the HMO plan. Also, HMOs operate on the concept of capitation — they receive a flat fee each month for each person they cover. While this creates a good mechanism for cost control, it can also lead to restrictive practices such as difficulty in assessing specialists or special drugs. If you do need specialists care, an HMO will require that you first get approval from your primary care physician, which can be time-consuming and difficult for someone with a chronic illness.
So we can say that doctors who are members of HMO’s are front line soldiers. The obvious attraction of giving physicians incentives to refrain from prescribing treatments is that doing so cuts down the HMO’s medical costs thereby saving them a lot of money. As the Supreme Court observed, cutting down medical treatment costs does not necessarily increase medical risks—in fact, the Court noted, less treatment may sometimes even lead to less medical risk, for instance by cutting down the hazards of unnecessary surgery.
“However, unless our current levels of medical treatment are, on the whole, more risky than they are beneficial, it seems almost inevitable that less medical treatment will lead to more overall risk” (CBS News, 2007). This conclusion is, moreover, supported by some disturbing empirical evidence, which shows that rationing by HMOs may be increasing the medical risks to various classes of patients For example, in the fall of 1996, the Journal of the American Medical Association (JAMA) reported an extensive study of the medical outcomes for patients who had been treated in HMOs.
The study concluded that “elderly and poor chronically ill patients had worse physical health outcomes in HMOs” than under traditional insurance plans. For example, “the elderly treated in HMOs were nearly twice as likely to decline in physical health over time. ” By contrast, younger, healthier, and financially better-off patients “did at least as well in HMOs as in the [fee-for-service] plans. ” Other studies have generally confirmed these results: While HMOs serve the “average, healthy enrollee” about as well as traditional health insurance, they usually appear to provide “worse outcomes .
. . for vulnerable groups (i. e. , the seriously ill, the mentally ill, and the poor). ” For anyone familiar with the elementary laws of economics, this difference in medical outcomes should come as no surprise. To state the problem bluntly, there is a potentially lethal economic flaw in the HMO concept. The flaw is that the final say on whether a person gets life-extending treatment is consigned to an entity that can have a strong economic interest in seeing the subscriber dead, as soon as possible.
The shorter the lives of the chronically ill, the less the HMO will have to pay for their care. No one would think it fair to hold trials before judges who have personal financial stakes in the outcomes. Yet, this is precisely the way that the HMO concept is structured. That is, arguably at least, a very serious flaw. Other lawsuits against HMOs accuse them of violating a racketeering law by concealing doctors’ financial incentives to hold down treatment costs. Whether an HMO can be held responsible for a physician’s negligence partially depends on the HMO’s screening process.
If an HMO only contracts with providers meeting certain quality criteria and advertises this to its members, a court may be more likely to find that the HMO is responsible, just as hospitals can be liable for negligence in selecting physicians. Since the HMO controls only the financial aspect of providing care, not the medical aspect, it is often insulated from malpractice lawsuits. The Employee Retirement Income Security Act (ERISA) can be held to preempt negligence claims as well. In this case, the deciding factor is whether the harm results from the plan’s administration or the provider’s action (Humbach, 2000).
HMOs often pay health care providers a flat fee to provide care, regardless of the number of patients the provider tends to during the term of that agreement. The more patients a doctor can usher in, then out the doors, the more money he or she stands to make. Not surprisingly, patients forced to abandon a trusted family physician to join one sanctioned by their company’s new HMO are less than thrilled to discover their new status as “annoyance. ” And also, even if their original doctor is an HMO member, the doctor will still shirk costs in handling their clients
HMOs also control many other aspects of the health care process, right down to the labs. So what happens is they contract with low-cost providers for medical services, which can lead to inaccurate diagnoses. And when an HMO starts to pull out of the market, the members are left behind with no health care at all. Because HMOs are private companies, they can go out of business. CONCLUSION Every coin has 2 sides and the HMO similarly, has a positive and a negative side. Most people claim that it is advantageous to be a member because it reduces their medical expenses.
However, on the other side of the coin, we see people like us who file lawsuits against this organizations. Do they have enough evidence? Yes- and they are seen in countless death certificates that ethically compromised physicians have signed in the name of money. By allowing and even encouraging the delivery of medical services via the modern HMO care format, society may be saying that it wants its medical care to be provided and financed under conditions that cannot possibly pay the cost of saving every life from avoidable foreshortening.
If so, then it is society which has decided that some “life-saving” must be foregone, that some lives are simply not worth the cost, and that, in consequence, lethal treatment decisions must sometimes be made. The people on the front lines of these fatal decisions are, in the final analysis, only doing the bidding of others. With this kind of healthcare that these organizations are providing, instead of getting better, the sick become more sick, and that translates into another dollar saved for the HMO’s.
Works Cited :
CBS News.(2002) HMOs explained : Tips on how to successfully deal with HMOs. Retrieved August 17, 2007. http://www. cbsnews. com/stories/2001/05/01/national/main288749. shtml CBS News. (2003). Things to know about HMO’s. Retrieved August 17, 2007. http://telepixtvcgi. warnerbros. com/reframe. html? http://telepixtvcgi. warnerbros. com/dailynews/consumer/04_01/04_25a. html Bjordahl, H. (1996). Murder for hire: The HMO revolution. Retrieved August 17, 2007. http://www. hansbjordahl. com/columns/hmo. html McGuigan, B. , (2007). What is an HMO? Retrieved August 16, 2007.
http://www. wisegeek. com/what-is-an-hmo. htm Henricks, M. (1996). What’s the plan? – advantages of using health maintenance organizations. Entrepreneur. Retrieved August 27, 2007 from http://findarticles. com/p/articles/mi_m0DTI/is_n3_v24/ai_18220970/pg_1 Humbach, J. (2000). Criminal prosecution for HMO treatment denial. Retrieved August 17, 2007. http://www. pace. edu/lawschool/jhumbach/HMOArticlek50579907r1. pdf Wikipedia, the free encyclopedia. (2007). Health maintenance organization. Retrieved August 17, 2007. http://en. wikipedia. org/wiki/HMO