Health maintenance organizations: just what the doctor ordered?

Following its recent reorganisation of the management of the hospital sector of the NHS, the Government is currently engaged in a review of the primary health care sector. Certain of its proposals may be interpreted as suggesting movement towards a system modelled on American-style Health Maintenance Organizations (HMOs). This article seeks to explore the context in which HMOs have developed, to assess their current performance and to evaluate their potential impact on the health delivery system. It suggests that they must be understood primarily in the context of initiatives aimed at reducing health expenditure, and finds that the cost advantages claimed for them are achieved through reduced utilization rather than through greater efficiency. It also argues that this reduced utilisation is likely to increase inequalities in health care.