HMO stands for Health Maintenance Organization. These organizations offer health insurance to patients who have enrolled within the program. Being a business, HMOs require enrollees to jump through numerous hoops to get the health care they need. The insurance coverage is typically limited to care from doctors who work for the organization, or contract with the HMO. HMO only covers patient care within its designated network of providers. This means that an HMO may require you to live or work in its service area in order to be eligible for coverage. As an enrollee, the HMO will undertake to provide for your medical care so long as you have made fixed, advance payments up-front.
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Considering that enrolled patients have paid the HMO at the outset, the HMO will not always put the patient’s health and well-being first because after all, they have their money. For HMOs, economic practicalities frequently take priority over individual patients’ needs. This often manifests as reduced responsiveness to those enrollees who need medical attention and care.
In the most basic sense, HMOs make financially motivated healthcare decisions for their patients (i). HMOs have a number of coverage limitations and will often charge patients additional costs for some services that may be outside the scope of their policy. For example, in an effort to cut costs, they may not allow diagnostic procedures or treatments that are medically necessary. HMOs have large amounts of control over doctors and other medical professionals and very often, tests and treatments need pre-approval by the HMO before they can be given to a patient. HMOs will frequently limit the number of x-rays and tests administered to their patient enrollees. Furthermore, HMOs avoid offering more advanced medical procedures to patients because the organization will not get reimbursed for the costs of these more expensive measures. Likewise, HMOs do not cover experimental procedures, and the organization can disagree with a doctor recommendation, instead mandating another course of action. In severe cases, HMOs may allow a patient to die rather than undertaking an expensive and perhaps uncertain, but potentially life-saving treatment. Another concerning cost-cutting mechanism is that HMOs will replace physician services with non-physician care. Furthermore, HMO abuses are more likely to occur in health care plans serving the least-informed consumers.
HMO cost-cutting measures often equate to deviations from the acceptable standard of care that other, similarly situated medical professionals would provide to patients. HMO budget constraints give rise to sub-standard medical care and the neglect of valuable opportunities to reduce patients’ risks.
The Department of Labor has endorsed patient’s rights to sue HMOs for medical malpractice, allowing you to sue your HMO for damages when it has denied you either the care or treatment you need.
- (i) Duke Law Journal. 1976.