Contracts between hospitals and health maintenance organizations

This article describes the contractual relations that are emerging between health maintenance organizations (HMOs) and hospitals. Six HMOs in four large metropolitan areas provided information on 102 hospital contracts. The authors found that the HMOs are becoming more aggressive in placing hospitals in competition with each other for HMO patients. Staff and network HMOs are able to obtain a higher concentration of patients and substantially larger discounts for inpatient services than are individual practice association (IPA) plans in this study.