Health Maintenance Organization

Definition

Health Economics

  • A health maintenance organization (HMO) is a group of US health care providers that offers an agreed comprehensive package of care to a subscriber for a prepaid premium. HMOs are a species of managed health care plan. There is a great variety of forms of HMO and great variety in the form of remuneration for physicians but two broad types of HMO are approved by the US Health Maintenance Organization Act. One is the closed panel HMO. Under this type, the HMO employs a group of medical professionals at a central location or contracts with a medical group to provide services exclusively for the HMO's members. Tight control of medical services is maintained because of the close affiliation between the employer HMO and its medical personnel. Another type is the Independent Practice Association. Yet another is the mixed model HMO.
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