HMO Act of 1973

Health Care System Evolution-HMO

This is a sample research paper on Health Care System Evolution-HMO to help you understand how to write such papers and deal with the topic of healthcare. If you need professional help, order research papers from Essayplant.  Otherwise, just explore the paper on Health Care System Evolution-HMO, and practice research writing on your own.


I would like to start by saying that before early 1970s the US possessed the so called fee-for-services model of health insurance plan. This system required patients to pay a fee to the doctor each time they visited a private clinic or hospital. The existing insurance policies provided some benefit coverage for various services including testing and hospitalization. In this free enterprise model neither doctors nor patients ever needed prior authorization from the insurance companies prior to undergoing any treatment. The following essay will explore how the evolution of health care delivery systems (HMO) has influenced current health care systems.

HMO Act of 1973

The HMO Act of 1973 was signed by the US president Richard Nixon and drastically changed the US healthcare services. The country needed to reflect increasing health care costs and in the 1970s it was apparent that the government together with the insurance companies and patients needed to develop a system that would keep the costs at a stable level (Rimler, 1992).

The HMO act of 1973 created a Staff Model or the centralized facility that would provide and coordinate healthcare. That basically meant that all the doctors a patient needed to attend were placed in one medical facility and patient then would work with one primary care specialist.

HMO Act of 1973

HMO Act of 1973. Health Care System Evolution-HMO

I find it useful to notice that the HMO Act of 1973 provided the following things to the US community:

  • Government loans and grants needed by medical specialists to plan, organize and carry out consolidation of medical facilities as well as facilities’ expansion (Broskowski, 1991).
  • State laws would support the HMOs that passed federal qualification testing and thus were authorized to operate on the territory of the USA.
  • The US government developed means to test and select the qualified HMOs for the federal funding.
  • The government obliged employers to offer coverage to employees as well as presented two panel federally qualified HMOs.

The article I found on the topic of HMO is called “CE: overview of managed care”, written by “Pharmaceuticals Representative” organization in January 2003 and is available in an online mode at The article was written to illustrate the situation in the healthcare industry that occurred after the HMO act of 1973 was signed. Also the article lets the reader understand what HMO is about and what advantages and disadvantages it presents to a common user of HMO services. This article does not directly influence the healthcare situation in my community yet certainly provides an instructive overview of the medical system of the USA. From reading the article one is able to learn what changes took place and what was done to stabilize the prices of healthcare services in the USA.

The main dilemmas that the executives are facing comes with the necessity to contribute a part of costs on behalf of their employees and still remain a profitable company. The cost containment strategies that were developed force medical companies to accept lower profit margins yet still provide quality service to the patients. The main players as illustrated by the article are various HMOs, Medicare, Medicaid and supporting agencies let alone government officials who constantly lobby additional changes to the system (Mitka, 1998).

The roles of Medicare and Medicaid

The roles of Medicare and Medicaid is to provide affordable medical service coverage to their target markets. The role of executives is to provide finances. The role of government officials is to present proper legal framework for smooth operation. There appears to be no significant interventions, yet the government strives to discriminate the users based on age by providing certain benefits for the elderly, while leaving the younger and capable of working with a choice of using some medical institution on their own (Mizrahi, 1993).

I believe that interventions aimed to lower prices are good yet insufficient. Because of the regulations the amount of medical facilities reduced as private clinics that existed prior to 1973 consolidated into HMOs. The government initiatives appear to have removed what was individually-financed care and virtually forced everyone to use managed care thus limiting people’s choices. Since the choices are limited and competition did not increase, one can only speak about artificial drop of prices and their stabilization (Metzl, 1998).

HMO Act of 1973

Health Care System Evolution-HMO

The problems were not addressed adequately since the healthcare services in the USA are still among the most expensive in the world and little is done about reducing their prices. As for the quality, one can say that it probably increased since consolidation and increased controls contributed to quality controls and improvements. Public medicine certainly is not perfect yet would provide more opportunity to get proper medical treatment to people who cannot afford it even under the managed care plans. Those individuals who would like to attend some top notched clinics would pay the price above the standard price for similar services as paid in regular clinics.


Finally, speaking about the changes, one should note that the US government at some point would implement the following innovations that used to work in the past and currently work for other countries. It would either allow the insurance companies to provide full medical insurance option packages or would nationalize the medical service industry making it public like it is in Canada and most of the European countries. The term managed care already means that a person does not pay 100% of his/her medical expenses but rather a part of it. Public medical care would mean that taxes would cover these expenses fully and would reduce the need of personal calculations of what amount one should set aside each month to have enough money to meet some distant future health needs. The evident changes are that the US government is likely to switch all medical costs to the employers and corporations and would actively stimulate the presence of insurance companies by providing them with some tax benefits.

I believe that in the future health organizations will slowly merge with the insurance companies or would individually start providing insurance options to people.  Ultimately the managed care facilities are likely to become public, i.e. when the US citizens would be the ones to pay taxes and then get medical services for free.


Broskowski, A.  (1991).  Current mental health care environments: Why managed care is necessary.  Professional Psychology; Research and Practice, 22(1), 6-14.
Metzl, J. M.  (1998).  Psychotherapy, managed care, and the economy of interaction.  American Journal of Psychotherapy, 52(3), 332-351.
Mitka, M.  (1998).  A quarter century of health maintenance.  Journal of the American Medical Association, 280(24), 2059-2060.
Mizrahi, T.  (1993).  Managed care and managed competition: A primer for social work.  Health and Social Work, 18(2), 86-91.
Rimler, G. W. & Morrison, R. D.  (1992).  Managed care: The solution or the problem?  Compensation and Benefits Review, 24(3), 38-48.

This was a sample research paper on Health Care System Evolution-HMO. For professional help with research paper and essay writing as well as for any other academic assistance, please, place an order.


Posted in History essays, Medicine papers, Research papers, Sample papers and tagged , , , .