Q: What are HMOs?

Health maintenance organizations, or HMOs, are health plans that deliver or arrange for quality care at an affordable price. Unlike conventional insurers, who simply pay claims, HMOs play an active role in arranging for appropriate, quality health care. They pay for and provide--or arrange to provide--access to a comprehensive range of medical services for a fixed, prepaid premium.

Q: How do HMOs differ from other types of health insurers?

A Focus on Staying Well. HMOs take an interest in helping their members stay healthy, not simply paying for treatment once they become ill, as conventional health plans do. HMOs focus on the prevention, early detection, and treatment of health problems. They provide access to primary care, including routine physicals, mammograms, blood pressure tests, and cancer screenings. HMOs also cover prenatal and well-baby care. Many HMOs offer health education classes and discounts at fitness centers.

Low Out-of-Pocket Costs. Unlike conventional insurance, in which patients pay a percentage of the bill each time they receive medical services, HMOs provide health care coverage for a fixed monthly premium that is, on average, much lower than the cost of old-style, "fee-for-service" health insurance. Moreover, while ordinary insurance commonly covers only 80% of many medical expenses, HMOs usually have minimal co-payments and do not require members to pay deductibles. Not only do these practices save consumers money, they remove financial barriers that can prevent people from seeking treatment early, before health problems become severe.

Minimal Paperwork. The typical HMO member does not receive bills and does not have to fill out a claims form for routine service. By minimizing the paperwork traditionally associated with obtaining medical services, HMOs make it simpler and less costly for their members to get the health care they need

Q: Can HMO members choose their own doctors?

HMOs employ or contract with select networks of doctors, hospitals, and other types of health care providers. HMO members must use providers within their plan's network. Patients who prefer a particular doctor or health care facility usually make sure the provider is part of an HMO's network and is accepting new patients before enrolling in the plan. Upon joining an HMO, a member selects a primary care physician from a list of doctors who work for or are associated with the HMO. A member's primary care physician provides routine medical care, refers patients to specialists within the network, and coordinates and monitors the treatment the specialists provide. This arrangement ensures that the care HMO members receive is efficient and appropriate, and it eliminates the fragmented treatment a patient may receive with ordinary health insurance.

Q: How do HMOs ensure their members receive quality care?

Before hiring or contracting with physicians or other health care providers, HMOs carefully evaluate their credentials. Once providers become part of an HMO network, their performance is routinely reviewed. Teams of physicians and other health care professionals regularly look at patient treatment histories in order to evaluate the appropriateness of all health care services. This practice, known as 'utilization review' or 'utilization management,' discourages the use of unnecessary procedures and tests, ensures that treatment is provided in the most appropriate setting, and establishes high standards of care. HMOs also help network doctors stay informed of "best practice" guidelines and new medical techniques and procedures. As a result of this recruiting, screening, and training, HMO doctors are well qualified. Nationally, approximately 85 percent of HMO doctors, but only 61 percent of all doctors, are certified by their specialty boards.

In addition, HMOs answer to a broad range of organizations that measure health care quality. The organizations include federal and state governemnt agencies, private employers, and independent non-profit review groups. The National Committee for Quality Assurance (NCQA), for instance, conducts a rigorous HMO accreditation process. You can find out any HMO's accreditation status through the NCQA website. NCQA is one of many organizations that evaluate HMO care for employers and individual consumers. Their "Quality Compass" rating index that includes more than 50 quality measures, such as cancer screening rates and measures of asthma care, is used by US News and World Report and Newsweek to rate HMO care. Medicare beneficiaries can check the "Medicare Compare" website to find out how local HMOs perform on quality, cost, and consuemr satisfaction rankings.

Q: Do HMOs really hold down health care costs?

Yes, HMOs have shown that they can hold down employers' and consumers' health care costs. The typical HMO plan costs 15 - 25% less than traditional insurance, yet HMOs provide more comprehensive benefits. By offering network doctors and hospitals a predictable volume of business, HMOs can secure lower prices to pass along to employers and consumers. Also, HMOs hold down costs by focusing on preventive care, eliminating the incentives for 'overtreatment' that exist with fee-for-service coverage, and providing comprehensive, high quality care more efficiently.

Q: Do HMOs cover emergency care?

HMOs pay for treatment in a hospital emergency room in the case of emergencies such as a serious injury or the onset of life-threatening medical conditions. In general, HMOs require a patient to seek treatment for non-emergency health problems from the patient's primary care doctor. This practice allows HMO patients to be treated in the most appropriate setting by doctors who are familiar with their medical histories. At the same time, it reduces the use of costly emergency room care when such care is unnecessary.

Q: What are the different types of HMOs?

A staff model HMO owns and operates health centers staffed by physicians employed directly by the HMO. In general, the health centers offer patients access to a broad range of medical care under one roof, including laboratory, x-ray, vision, and pharmacy services. A group practice HMO typically contracts with medical groups who provide health care services to HMO members under one roof, and who see patients from other health plans. Independent Practice Associations (IPAs) are HMOs that contract with individual physicians in private practice who provide care to HMO members within a private office setting.

Q: Who is eligible to join an HMO?

More than 3.7 million Maine, Massachusetts, New Hampshire, and Rhode Island residents now belong to HMOs. Most are covered through their employer. Some HMOs offer direct enrollment for individuals not eligible for insurance through a group. In addition, many HMOs offer senior plans for Medicare beneficiaries. About 400,000 ME, MA, NH, and RI Medicare beneficiaries currently belong to HMOs.

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