Health care delivery systems in review

A reversal of HMOs' financial difficulties is likely to occur over the next few years. The era of physicians assuming financial risk and receiving incentive payments may end, due to physician sentiment and the outcome of federal legislation. The reimbursement rate for Medicare risk contracts is currently being revised, which may improve the bottom line of some HMOs. Overall, the industry is experiencing considerable consolidation and little, if any, expansion. This is a time of regrouping to improve profitability, tighten utilization mechanisms, and strengthen plan administration.