Health maintenance organizations: critical issues raised by restructuring delivery for health systems reform

In sum, the potential that managed care will grow under health systems reform creates an opportunity for the HMO industry but also serves as a challenge and a threat. Faced with greater scrutiny and growing demands, HMOs increasingly are being forced to demonstrate their potential and live up to their expectation. At the same time, the changing nature of the health care system creates a challenge for HMOs. Cost pressures create needs to review the entire delivery system, including the ambulatory component, with a focus on enhancing cost-effectiveness. Greater visibility also creates demands; growing market penetration argues for the creation of a new paradigm to define an appropriate structure for public accountability and management. Finally, the transformation of an HMO industry into a managed care industry is not without its risks as HMO performance becomes evaluated not only against itself but as part of the performance of the broader managed care industry in which HMOs have become embedded.