HMO viability and the economically disadvantaged

This study uses data from the 1984 Kaiser Foundation national health care survey to assess the viability of HMOs for the economically disadvantaged in light of important health care attributes. To achieve this, the paper examines their satisfaction with different health care attributes and their preferences for alternative health care systems with respect to these same attributes. These data are used to assess overall health care system preference. This study found that the economically disadvantaged population was largely indifferent between an HMO or traditional fee-for-service health care system. This finding supported the prospect that the economically disadvantaged and Medicaid beneficiaries were somewhat amenable to HMO coverage. A fairly strong preference for fee-for-service health care system was found with respect to the quality of care attribute. This suggests that the economically disadvantaged will view HMOs as the health care system of choice depending on their ability to provide quality care. In light of these findings, several policies are recommended.