The value of a health insurance in modern society cannot be overestimated. Common health insurance plan implies payments to a health care organization, in which the patient has received treatment, by an insurance company, with which the patient has a contract. In such a case, the insurance fees are rather substantial as well as insurance premiums. Expensive insurance plans are not affordable to many, so it affects the health of the population to a certain extent. The concept of a Health Maintenance Organization (HMO) was developed to overcome the deficits of common health insurance system and provide people with the affordable and considerably qualitative health care coverage. A Health Maintenance Organization provides various health services for some fixed payment paid annually. Considering the peculiarities of the open and closed-panel HMOs, the paper aims to explore the concept of an HMO and its types (open and close), examine the similarities and differences between the two open and two closed-panel HMOs, outline the advantages and disadvantages of each type, assess the situation with HMOs in Florida, and draw the appropriate conclusions, including the author’s opinion.
HMO’s Types
Closed and Open HMO’s Panels
The closed-panel HMO is the traditional type of HMOs, providing the health care services for an annual or monthly fee. Such HMOs have a fixed group of physicians who work onsite in the facilities of HMOs, and a patient (subscriber) can choose a provider of healthcare services (Birrer, 2012). This type of HMOs usually employs specialists they have as consultants or signs special contracts with them to make sure that physicians will not work elsewhere in similar organizations too. Patients cannot choose particular physicians to cooperate with. The open-panel HMO is a rather new concept if compared to the closed-panel type. It is the development of the concept of the closed-panel HMOs. In such an organization, the patient pays a fixed annual or a monthly fee and can choose a physician (Birrer, 2012). In such a model, an HMO is commonly an insurance company or some medical society in a community.
Similarities and Differences between the Two Closed–Panel HMOs
First HMOs of the closed-panel type were non-profit organizations, so-called cooperatives formed by the patients in a community. Modern HMOs of such type are owned and managed by the profit-making organizations such as HIP (NYC) and Ross Loss (LA), for example. Both concepts (cooperatives, created by patients and commercial organizations) have the goal to provide the patients with a qualified medical help (Birrer, 2012). However, modern HMOs have more opportunities to offer to the patients and physicians, considering the profit-making focus and thus, more substantial financial support.
Similarities and Differences between the Two Open–Panel HMOs
HMOs of the open-panel type are organized by insurance companies (Blue Cross/Blue Shield, for example) mostly or medical societies at a county level. Both HMOs have the goal to provide services for a fee and allow patients to choose from the pool of physicians these organizations have (Birrer, 2012). Insurance companies have access to the larger group of physicians, considering the more significant profit-making opportunities.
Advantages and Disadvantages of Each Type
Both types of HMOs have advantages and disadvantages. Closed-panel HMOs’ advantages are the opportunity to provide more qualified medical help, the reduction of administrative costs, physical facilities that have everything needed on site and in one place, and even basic medical equipment such as X-ray machines or pharmacies. The disadvantages are the difficulties with attracting new patients to HMOs, location issues (not convenient to the patients), availability issues (in big cities only), and overall complexity of setting such type of HMO (Kongstvedt, 2012). Closed-panel HMOs are more traditional, though.
Open-panel HMOs’ advantages are the easy marketing of services, considering a substantial amount of private doctors, the improved logistics (physicians are not gathered in one place), and a simpler and less expensive process of setting up and maintenance of such organizations. The disadvantages are the lack of opportunities to influence the quality of medical care due to greater independence of the physicians and higher premiums than in the case of closed-panel HMOs (Kongstvedt, 2012). It should be noted that closed-panel HMOs are more widespread than open-panel type despite the potentially advantageous position of such HMOs.
HMOs in Florida
The state of Florida has HMOs’ type trend similar to the rest of the country. As of 2013, the majority of HMOs is of closed-panel type (Medina, 2015). It can be explained by the financial situation in the state and by the desire of the population to have quality medical services on site. People of Florida seem to prefer high-quality risk-free services that local HMOs such as Wellcare of Florida, Humana Medical Plan, and others can provide.
Conclusion
Summing up, the paper has explored the concept of HMO and its types (open and close), examined the similarities and differences between the two open and two closed-panels HMOs, outlined the advantages and disadvantages of each type, and assessed the situation with HMOs in Florida. In my opinion, closed-panel HMOs are preferable to choose these days, considering the advantages they provide: the quality of medical care (key advantage) and a full spectrum of the provided services. HMOs of the open-panel type will become more attractive in the future in case of the appropriate control over the medical care services. The other disadvantages are not sufficient.
References
Birrer, R.B. (2012). Urban family medicine. Brooklyn, NY: Springer Science & Business Media.
Kongstvedt, P.R. (2012). Essentials of managed health care. Burlington, MA: Jones & Bartlett Publishers.
Medina, G. (2013). The list: Top 25 Florida health maintenance organizations. South Florida Business Journal. Web.