Physician adaptation to health maintenance organizations and implications for management

The growth of health maintenance organizations (HMOs) and other forms of managed care presents a challenge to traditional patterns of private practice. In Dane County, Wisconsin (Madison Metropolitan Area), the proportion of the population enrolled in closed-panel HMOs increased dramatically, from 10 percent in 1983 to over 40 percent by 1986. This study surveyed 850 practicing physicians regarding their expectations before, and experiences after this rapid change to competitive HMOs. Although most physicians expected a loss of earnings and lower-quality care, the majority reported that neither declined. However, most physicians expected and reported a decline in their autonomy. Primary care physicians were most supportive of the change to HMOs. The implications of these findings for management practices are discussed.