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Health care delivery systems in review.

S N Dunmire

    The Journal of Medical Practice Management : MPM
    |February 3, 1990
    PubMed
    Summary

    Restrictive utilization reviews in Health Maintenance Organizations (HMOs) are less cost-effective than anticipated. Despite industry challenges, HMO enrollment grew, and successful plans are focusing on market share and niche products for financial improvement.

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    Area of Science:

    • Healthcare Management
    • Health Economics
    • Managed Care

    Background:

    • Physicians face increasing utilization review restrictions within Health Maintenance Organizations (HMOs).
    • Cost containment strategies in healthcare are under scrutiny for their actual effectiveness.
    • The managed care industry operates under significant financial and regulatory pressures.

    Purpose of the Study:

    • To evaluate the cost-effectiveness of restrictive utilization review procedures in HMOs.
    • To analyze the financial condition and market dynamics of the HMO industry.
    • To identify strategies employed by successful HMO plans.

    Main Methods:

    • Analysis of evidence regarding utilization review procedures.
    • Review of cost containment pressures from employers and regulatory limitations.
    • Examination of HMO enrollment data and industry financial trends from an SMG census.

    Main Results:

    • Evidence suggests utilization review measures are not as cost-effective as initially believed.
    • Health Maintenance Organization (HMO) enrollment increased significantly in 1988, while the number of plans decreased.
    • The overall financial condition of the HMO industry is improving, even with the failure of a major plan.

    Conclusions:

    • Restrictive utilization reviews may not be the most effective cost-containment strategy.
    • Successful HMOs are adapting by analyzing market share and developing specialized products.
    • The managed care landscape is consolidating, with growth in enrollment and a focus on strategic positioning.

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