Health Maintenance Organizations and the Market for Health Services

Abstract

In its care proposals pending in the Ninety-second Congress, the Nixon administration has specified the so-called health maintenance organization, or as one cornerstone of its solution to the widely noted care crisis in the United States. First, the pending Medicare amendments, which were included in H.R. I along with the President's Family Assistance Plan of welfare reform,l would incorporate HMOs into the Medicare program as potential providers of care for those program beneficiaries who elect to enroll in them at the federal government's expense. Second, the President's package of care proposals that was originally announced on February i8, I97I,2 places heavy emphasis on the restructuring of the care delivery system by stimulating the organization and growth of HMOs through a series of affirmative measures. The administration hopes that by I980 HMO enrollment will be available to ninety per cent of the population as an alternative means of procuring care.3 In addition to the administration's proposals, a number of other proposals for meeting the care crisis are also pending in Congress. Many of these plans incorporate models of care delivery organizations that are at least subspecies of HMO, indicating the breadth of the consensus that has embraced this mode of rendering services. Thus, the Kennedy-Griffiths proposal4 for national insurance, widely thought to be the leading contender against the administration's