The Southern California HMO marketplace: growth, innovation, and integration

The 1980s have been a period of rapid growth in the Southern California HMO industry. Much of this growth is related to the emergence of network-model HMOs and, more recently, IPA-model HMOs, as a major competitive force that provides an alternative to the massive and rapidly growing Kaiser plans. The growth of the industry has been made possible by and, at the same time, has facilitated the development and growth of multispecialty medical groups and hospital-based IPAs throughout Southern California. This development has brought the HMO industry and the practice of prepaid medicine into the mainstream of health care and had led to the extensive involvement of community hospitals and independent physicians and physician groups in prepaid medicine. The coming decade will be marked by further growth and by continued integration of physician practices, hospitals, and HMOs into more efficient, high quality, vertically integrated systems of health care.