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Health care delivery systems in review.

S N Dunmire

    The Journal of Medical Practice Management : MPM
    |December 5, 1989
    PubMed
    Summary

    Financial difficulties for Health Maintenance Organizations (HMOs) are expected to reverse soon. Physician risk-sharing may end due to legislation and sentiment, with industry consolidation improving profitability.

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    Area of Science:

    • Healthcare Management
    • Health Economics
    • Health Policy

    Background:

    • Health Maintenance Organizations (HMOs) have faced significant financial challenges.
    • Physician involvement in financial risk and incentive payments has been a key aspect of HMO operations.
    • Federal legislation and physician sentiment are influencing the future of HMO reimbursement models.

    Purpose of the Study:

    • To analyze the projected financial recovery of HMOs.
    • To assess the impact of changing physician reimbursement models on HMO profitability.
    • To understand the implications of industry consolidation and regulatory changes for the healthcare sector.

    Main Methods:

    • Analysis of current industry trends in healthcare finance.
    • Review of legislative proposals affecting Medicare risk contracts.
    • Assessment of physician sentiment regarding financial risk in managed care.

    Main Results:

    • A reversal of HMOs' financial difficulties is anticipated in the coming years.
    • The practice of physicians assuming financial risk and receiving incentive payments is likely to diminish.
    • Revisions to Medicare risk contract reimbursement rates may enhance the financial performance of certain HMOs.
    • The HMO industry is characterized by significant consolidation and limited expansion.

    Conclusions:

    • HMOs are entering a phase of strategic regrouping focused on enhancing profitability.
    • Improved utilization management and strengthened plan administration are key priorities for HMOs.
    • The evolving regulatory and economic landscape suggests a more stable financial future for the HMO industry.

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