I am required to enroll in a different health insurance offering from my company next year, and HMO is one of the options. In all honesty, it looks like the HMO is the best option. I had a PPO/copay before, and the HMO seems rather similar.
So what is the stigma of HMOs that I keep running into on my general searches for HMO information? To some, they seem death trap. Surely this must be hyperbole.
By signing on with the HMO, you agree to only use doctors within that HMO network. If your current doctor is not in that network, you need to change doctors. For some people who have been with the same doctor for years, that change is not acceptable. If you choose to use the out of network doctor, you will end up paying more. PPO plans will allow for this, but you end up paying more for them, too.
As to the stigma, I am not sure. People generally do not want to be told what they can and cannot do - they may want a specific doc, and when they find out the doc is not in the HMO network - HMO=bad. However, they should complain to their employer, who purchased the group health insurance, and who chose which HMOs to offer their employees. Employers will typically analyze disruption before making a change, but usually it all comes down to $.
I think another problem with HMO’s is the fact (or perception?) that they have much more control over what their member doctors can do.
The common feeling (I think) is that with a PPO, you choose any doctor of your choice, who is actually working for you (if not, you keep choosing different doctors until you find one who is).
With HMO’s, it tends to feel more like the doctor is working for the HMO, and therefore he is much more under their direction, often providing low-quality perfunctory care in performing his primary duty, which is to minimize expenses to his HMO overlords. True or not, I think this is the impression that HMO patients tend to come away with.
In the case of my HMO, it is in fact almost literally true that the doctors are, indeed, emloyees of the HMO. My HMO is a major health services provider in several states, and they (sort-of) own and operate their own facilities, offices, hospitals, and equipment, and hire their own doctors and all other staff.
HMOs expanded quite a bit in the 1990s and achieved noticeable health care cost control, but they did so in large part by setting strict limits on access to specialist care, to a degree that many found unacceptable. That reputation still persists, I think, although I have no knowledge as to whether it continues to be accurate.
Is it the insurance that is HMO or is it really for an HMO like Kaiser in California or Group Health in Seattle?
I am seeing ACA exchange insurance here described as HMO or PPO but it is not affiliated with the large Group Health HMO in Seattle.
Increasingly, hospitals around the Pacific are buying physicians practices making them employees of the hospital. I’m not sure how that differs from an HMO. Northwest and Skagit hospitals have done this.
With an HMO if use an out-of-network provider there’s usually no benefits at all (unless it’s an emergency); PPOs provide 2 levels of benefits, with out-of-networks being worse than in-network (ie higher deductible & out-of-pocket, lower coinsurance, etc). Also with an HMO you have to designate a primary-care physician and get a referral from them anytime you want to see a specialist (or even another GP); PPOs allow you to self-refer.
Yes. All correct. If you want more flexibility than the HMO, you can go PPO, but again, it costs you more to have that. This is a complaint for people who do not like HMOs.
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Is it the insurance that is HMO or is it really for an HMO like Kaiser in California or Group Health in Seattle?
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The HMO is a product sold to your employer by the insurance company. Typical HMOs provide a network of doctors and hospitals that you would need to use for your health care, and going outside of that network results in what alphaboi867 states above.
The big complaint was that a doctor’s pay was tied to meeting certain goals, including having X number or less specialist referrals and Y number or less expensive tests and Z number of minutes or less, on average, with a patient. And if doctors chose to go over those numbers and not make the bonus, they’d get a stern letter hinting that inefficient practisioners might be let go. At least according to the TV news at the time.
In California, HMO pretty much means “Kaiser”.
It is a huge operation with dozens, if not hundreds, of facilities.
It traces its origins to the Hoover Dam project, where workers were in the middle of nowhere, and the doctors the contractor hired were the only game in town.
If you need a complex diagnoses or treatment, an HMO is not going to be optimal - my impression is that you need a written referral from your PCP to see any “specialist” - you can’t go down the street and get a second opinion you go to whatever doc your PCP says.
Well, that is one option, but a complex case may require 3 or 4 different specialists to each rule out his/her area as the cause/contributing factor. A PPO is going to make that easier (or so I am led to believe).
I’ve never had a problem getting referrals, and I get a LOT of them. Other plans may vary. I’m in California and in an HMO that’s not Kaiser.
I think the propect of having some nameless, faceless administrator controlling the purse strings of your health care is scary.
If you are the sort of person who wants to have full freedom to see whoever you want and not have to ask for referrals then the HMO option is not for you. OTOH if your primary is in the HMO and you are going to use your primary as your medical home and take your primary’s recommendation of what specialist to see anyway, then the HMO option may save you a money, especially if you utilize healthcare services. OTOH sometimes the premiums for the HMO option costs more.
As a provider I can always get my HMO patients to quality specialists who can handle what the issues they have. Just like I can my PPO patients. It might not be the specialist Aunt Betsy said is THE person to see, but they are certainly qualified. If no such person exists within network I can get approval to go outside of network and have it covered. Many of our group’s quality measures are driven by HMO metrics as well as they are the ones that often have incentives to large groups for achieving those outcomes (markers of better preventative care for both routine health care and at risk populations such as asthmatics, diabetics, those with COPD, etc.) Of the metrics set all are have been based on evidence based standards for best practice.
HMOs became a trendy whipping boy in the media in the 90s and the myths of HMOs still are an easy trope for shows to use (one of the stupid things about Breaking Bad was the idiocy of how those characters navigated healthcare, for example).
I think HMOs and PPOs overlap in so many ways now it is very hard to distinguish them.
The most traditional concept of an HMO, is an organization that owns facilities, it owns practices, and it also runs the benefits/premium organization. Kaiser is the biggest and best example (Kaiser has more people who are members in its network than many countries do people.) Kaiser charges premiums and such and operates one arm very much like an “insurance” company. That arm generates all the revenue that the other arms receive. Its other two arms are basically a large number of physician practices, and Kaiser hospitals that do procedures and etc. Everyone in the Kaiser system I believe is a Kaiser employee (or a closely affiliated contractor, I think.)
This means Kaiser has a huge amount of control over scheduling and a huge amount of control over cost that you do not see elsewhere. In traditional insurance, with say a PPO plan, the insurance company collects money from you in premiums, and it has a quasi-adversarial relationship with providers in that it wants them to agree to lower reimbursement rates so it can keep its reimbursements lower and make the maximum amount of money off their premiums.
At a “true” HMO like Kaiser, it’s all in the same building. They aren’t sending you to a specialist who the insurance company was able to negotiate a certain rate with, instead they’re sending you to a specialist that also works for Kaiser.
But many HMOs seem instead to function more like traditional health insurance these days. They have a network of private physicians who are not employees of the HMO, that accept reimbursements from the HMO. They will require their patients to designate someone as their Primary Care Physician, and that PCP’s referral will be required for your HMO to cover a visit to a specialist–and that specialist must also be in the HMO network.
The logic behind the fully integrated outfits like Kaiser and the less integrated ones that are (at least where I’ve lived) more typical, is that the “tightly managed” network of doctors (or employees in the case of a Kaiser) is much easier to control on cost. Further, funneling all treatment through a PCP can help eliminate unnecessary visits. Someone who might be inclined to run to a specialist over a hangnail for example, might be shut down by their PCP and told “yeah, go home and get over it.”
I think the general perception from the late 90s and 2000s on is that Kaiser is a great model for healthcare that is frequently spoken of very glowingly, in terms of providing good care at a good price. In the mid-90s and earlier Kaiser and many other HMOs were heavily maligned. Many of them brought in accounting types of basically ran a cost-control regime that create a lot of negative attention (but was probably never as bad as many said), but I’ve heard a lot of positive things about Kaiser and other HMOs in the past 10-15 years or so.
My company forced us to use HMOs in the 90’s. My biggest gripe was that they seemed to be there to LIMIT the amount of care you got – mostly by making it a lot harder to get the care.
In particular, you HAD to get a referral to a specialist. That meant a trip to your regular PCP to get the referral (if he would give it to you, unless he wanted to try to treat you himself). Then ANOTHER trip to the specialist. So 2 times taking off work, 2 times to different medical facilities, etc.
During this period I was having trouble with my eyes. I KNEW I needed to see an Ophthalmologist, but I couldn’t go to one without seeing my PCP first.
HMOs also limit your choice of specialists to just their specialists. I had an MS scare a couple of years ago. I ended up getting a second opinion from a specialist at the UCSF (Univ. of CA San Francisco) hospital, one of the premier hospitals in our area. Just to characterize this, I once had an <X> problem. I asked where the best place to go was. Living on the Peninsula, I expected them to recommend Stanford. They actually said, go to UCSF.
The specialist at UCSF said that MS was unlikely, after a local specialist had said otherwise. So I probably would have ended up with a lot of unneeded MS treatment.
I admit to being biased. I hate HMOs. Other people have told me that they actually like Kaiser, so I guess YMMV.
J.
I am a health management and policy student.
There are now as many flavors of HMO as there are ice cream. Read the details of the policy being offered. Many of the restrictions that HMOs used to place on utilization (like using the primary care provider as a gatekeeper) have been dropped since the 1990s due to their unpopularity. The term “HMO” is now used by plans that do not fit the traditional definition of that term at all.
I was not a fan of 1990s style HMOs either, but most of the demonizing information about them is wildly out of date. Some now offer a lot of choice to their customers, such that they are almost indistinguishable from PPOs…but they still call themselves an HMO. Some HMOs are still fairly closed shops, where you have to see doctors that are owned by the organization. Do your research.
Thr trouble with doing one’s own research is: Research What?
If I figure I need Radiology, and the facility next door has all kinds of imaging gear, no worries.
But what if it turns out I need a Cardiologist? Oppps! the only one of those is across town.
I’m going out on a limb here and thinking a young family (no family histories of complex diseases) just might be better off with an HMO - you are likely to use small amounts of vanilla medicine for the next 20 years.
I have kidney failure and osteoarthritis - walking through the door with that would have taken a while to diagnose. Flexibility is key. I also had a scarcy situation in which I went thorough an Internist, Cardiologist, Gastroenterologist, and Endocrinologist - all within 6 weeks. Try that in an HMO. (they never did figure out what it was).
Yeah, my insurance company loves me.
The true definition of HMO (if there even is one) varies widely state to state, plan to plan. Some are entities where the insurance co and the clinics/hospitals themselves are owned by the same company. Others are separate.
What all HMOs generally have in common are the administrative requirements for the members who seek specialty care. Basically, in order for an HMO to see a specialist, they must first see their primary care physician (PCP) and obtain an administrative referral. An “administrative referral” is where the PCP formally notifies the insurance company of the referral. The referral is to a specific specialist for a specific type of care and a specific number of visits. Should that specialist say that you need to see a different specialist, you need to go back to your PCP to obtain another administrative referral.
Sometimes there are benefits out-of-network - where a member would self-refer to a specialist of their choosing. Sometimes there is no coverage except for (generally) emergency care. Some states offer exceptions to this rule. In MN, for example, women may self-refer to an OB/GYN within a larger type of network.
The idea back when HMOs became popular in the late 80s and early 90s was that plans would save money by restricting self-referrals to specialists (who cost more) when the presenting problem wasn’t complicated enough to warrant a specialist. In addition, many plans administering HMO type plans included financial incentives for PCPs who did not refer beyond a certain patient per month ratio. Or, PCPs were penalized financially when they did refer beyond a certain patient per month ratio.
Problems arose because of high administrative costs for the health plans. They now had to process and review all of these referrals (which means more staff to handle all the extra paperwork). There was a lot of claims adjustments because maybe the PCP didn’t get the referral in the system quickly enough and the claim for the specialist came in before the referral. Or a member would self-refer, the claim would deny or pay at a reduced rate, then they would badger their PCP until they provided a post-service referral. It got somewhat messy/costly on the administrative side.
HMOs also received negative press from both doctors and patients because the insurance companies were perceived to be managing folk’s care instead of the doctors - and in some cases this was true to a degree - in order to save money.
So - no one was really saving money with HMOs, doctors didn’t like them, patients didn’t like them and they just fell out of vogue. They are still available in many areas, but aren’t as ubiquitous as they once were.
HMO type plans can tend to cost the member less than a sort of open network type of plan with similar coverage. This can really vary.
If you’re young, relatively healthy, and don’t have a history of more complex health issues - plus you don’t mind locking in on one primary care doctor to manage all your health care needs - plus the additional red tape involved should you need to see a specialist, there can be value in these plans.