HMO Health Insurance

HMO Health Care: The Good, The Bad, The Managed

What is HMO Health Insurance and why does it have such a bad reputation?

HMO health insurance (Health Maintenance Organization) is a form of Managed Care Insurance. The idea is that an organization (the one providing the health insurance) works with doctors and hospitals to form a network.

These doctors are contracted with the HMO for lower prices, and might subject themselves to the organization for ‘utilization review’. The HMO reviews the dollar amount or number of visits that a person would use in one month, and scrutinizes for excessive medical care.

When signing up for an HMO health insurance policy, you would choose a Primary Care Physician within the network. That physician then becomes your main source for healthcare, and must give you a referral before you’re able to seek other medical help (like from a specialist). Women would choose an OBGYN when signing up…who would also be able to give referrals. And, of course, parents would choose a pediatrician for their children.

HMO Health Insurance Provides Less Expensive Care

With a setup like this, the HMO health insurance company is able to lower the over-all cost of health insurance (and increase the amount of benefits) in several ways. As mentioned before, the healthcare providers are contracted for lower prices in exchange for network inclusion. It’s like buying health care in bulk and then reselling it.

Since HMO health insurance reviews the utilization, they also save money by making sure patients do not receive unnecessary treatments…this lowers the over all cost of the insurance itself, and in turn allows them to increase the benefits amount.

HMO Health Insurance Can Seem Restrictive

The utilization review…it can be somewhat limiting. For example, Doctor Noname wants his patient to receive a CAT scan, but someone reviewing the case disagrees. The doctor then has to hassle with the HMO health insurance case worker before his patient can receive the care. Some people find this intrusive and difficult to deal with.

There are two ways to look at this. On the one hand, Dr. Noname is the one seeing the patient. He sees a person…not a case number. He is able to put the patient’s symptoms into context with the patient’s current health condition.

On the other hand, and this is something people often forget, HMO health insurance providers are looking at the big picture. Not necessarily always at the money saving aspect, but as a way of troubleshooting patient afflictions. That’s really part of what a doctor does…troubleshoots.

HMO Health Insurance is a Numbers Game

Think of it in terms of a car or an office machine. Not all technicians are the same. A rookie might spend an hour trying to figure out what’s wrong with a machine and someone with more experience might only spend five minutes. The HMO health insurance company adds years to a doctor’s level of experience.

When you hire a small copier dealer to repair your office machine, the technician is free to troubleshoot in any way he sees fit. He could replace the wrong part and end up costing the customer money. But some big corporations (like Xerox) train their techs to follow troubleshooting procedures…ones they put together by looking at the big picture. So even inexperienced technicians are able to quickly find a problem. And this is part of the concept behind HMO health insurance policy restrictions.

HMO health insurance might not be the best plan for everyone, but it allows companies to provide affordable health care for a large number of people…people who need good benefits with low premiums. This is what makes HMO health insurance an important part of the industry.