Health Maintenance Organizations

Health Maintenance Organizations. Alone among western industrialized nations, the United States at the end of the twentieth century lacked a system of socialized medicine or universal health insurance. National health plans proposed by presidents Franklin Delano Roosevelt in 1939, Harry S. Truman in 1948, and Bill Clinton in 1993 failed to win congressional approval. Instead, the United States, beginning in the 1930s, evolved a network of health‐maintenance organizations (HMOs) by which a group of health‐care providers contracted to deliver specified, prepaid medical services to a defined group of enrollees.

The HMO concept originated among practitioners in the public‐health, industrial‐medicine, and preventive‐medicine fields, who often advocated prepaid group practice as an alternative to the individual fee‐for‐service arrangement favored by the mainstream medical profession. An early advocate of “health maintenance,” the Yale bacteriologist and public‐health expert Charles‐Edward Amory Winslow coined the term in 1920 to describe an approach that emphasized preventive medicine and broad access to comprehensive care for workers and their families. Winslow's Medical Care for the American People (1932) advocated group‐health plans.

The concept gained credibility thanks to the West Coast industrialist Henry J. Kaiser. A group‐medical plan created for the workers on Kaiser's Grand Coulee dam project in the 1930s was extended to employees in Kaiser's shipyards during World War II. In 1946, with the support of organized labor, Kaiser‐Permanente incorporated as the nation's largest and most fully integrated prepaid group health plan, with its own physicians, hospitals, and medical facilities. Other plans soon emerged, particularly in the West. In the East, the idea was pioneered by the Group Health Association of Washington, D.C. (1937), and by the Health Insurance Plan of Greater New York (1947). The American Medical Association (AMA), defending the fee‐for‐service model, resisted HMOs, attacking them as “socialized medicine.” The U.S. Supreme Court, however, in a landmark 1943 ruling, struck down the AMA's effort to bar Group Health Association physicians from using local hospitals. The high court found this effort a violation of antitrust legislation.

The controversies stirred by HMOs highlighted the difficulty of achieving the goal of providing broad access to quality health care in a democratic society; the differing interests of consumers, employers, organized physicians, and the federal government; and the tensions between the emerging structure of corporate medicine and individual physicians’ traditional autonomy. But mounting health‐care costs, coupled with increasing emphasis on preventive care, propelled the movement forward. The Health Maintenance Organization Act of 1973, passed with the backing of the Richard M. Nixon administration, codified the basic tenets of prepaid health care and provided start‐up funding for HMOs. By the mid‐1990s, over five hundred HMOs existed nationwide, enrolling over fifty million people, including persons enrolled under the federal Medicare and Medicaid programs. While the first HMOs were not‐for‐profit, those formed in the later twentieth century were mostly for‐profit corporations. Kaiser‐Permanente, with 9.1 million members by 1998, remained an industry leader. HMOs, in turn, were part of a larger trend toward managed care, driven by cost‐containment pressures. The same pressures brought stricter regulation and oversight of HMOs after 1980. By the mid‐1990s, at least half of U.S. physicians were associated with HMOs or other managed‐care arrangements.
See also Health and Fitness; Industrial Diseases and Hazards; Medicine: From the 1870s to 1945; Medicine: Since 1945.

Bibliography

Paul Starr , The Social Transformation of American Medicine, 1982.
Rickey Hendricks , A Model for National Health Care: The History of Kaiser Permanente, 1993.

Rickey Hendricks