Do HMOs Make a Difference?

Originally published by the Center for Studying Health System Change (HSC). HSC was a nonpartisan policy research organization funded principally by the Robert Wood Johnson Foundation.

Do HMOs Make a Difference? Comparing Access, Service Use and Satisfaction

Conference Transcript | March 9, 2000

Health maintenance organizations (HMOs) had become widely perceived by the American public as offering lower quality of care than other forms of health insurance, driven by concerns about restricted provider choice, limited access to services, and other factors. This negative perception fueled a managed care backlash and amplified calls for patients' rights legislation. To bring evidence-based context to these policy discussions, HSC completed a major research study comparing 35,000 privately insured individuals in HMOs against those enrolled in other plan types.

Key Findings

The results suggested that while HMOs and other plans differed in their reliance on specialists and in the types of access problems enrollees encountered, the overall level of access to services was comparable across plan types. Despite this, consumers continued to view HMOs as delivering somewhat inferior care. Some findings reinforced well-established distinctions in how HMOs and non-HMO plans delivered care, while others challenged conventional assumptions.

Roundtable Participants

The conference brought together leading voices in health policy to assess the research and debate its implications. Linda Bilheimer, Ph.D., Senior Program Officer at The Robert Wood Johnson Foundation; Janet Corrigan, Ph.D., Director of Health Care Services at the Institute of Medicine; Robert Reischauer, Ph.D., President of the Urban Institute; and John Rother, Director of Legislation and Public Policy for AARP served as discussants. Paul Ginsburg, Ph.D., President of HSC, moderated, while Peter Kemper, Ph.D., Vice President at HSC, and James Reschovsky, Ph.D., Senior Health Researcher at HSC, presented the study findings.

Conference Agenda and Discussion Topics

HSC researchers opened the conference by presenting their nationally representative findings, after which the expert panel explored the policy ramifications. The discussion centered on several critical questions. Consumers in HMOs paid lower out-of-pocket costs but sacrificed some control over care decisions -- were consumers willing to accept that bargain? What accounted for the apparent inconsistencies between objective access measures and consumer satisfaction ratings? Was patients' rights legislation necessary to address perceived problems, or had HMOs found a reasonable balance between primary/preventive care and more costly specialty services?

The panel also debated the future of the HMO model itself. Would pressure from consumers and purchasers give rise to new forms of managed care that would make traditional HMOs obsolete? If patients' rights legislation passed, how would it reshape the industry and affect consumers? Following the roundtable discussion, the floor opened for an extended question-and-answer session with the audience.

Conference attendees received the first published copies of the research, which appeared as six separate papers in the winter issue of the journal Inquiry. The conference was designed for policymakers seeking a clearer understanding of HMO performance, industry leaders looking for strategic insights on how HMOs compared to other plans, and advocates working to grasp how different plan types performed on measurable dimensions of access and quality.

Sources and Further Reading

Kaiser Family Foundation -- Employer Health Benefits Survey -- Annual data on employer-sponsored health insurance.

Health Affairs -- Peer-reviewed health policy research.

Robert Wood Johnson Foundation -- Health policy research and programs.