Health Maintenance Organization (HMO)
HMO is an acronym for Health Maintenance Organization. An HMO is an organization delivers medical services through a network of healthcare professionals who follow specific guidelines for care and costs. By allowing the HMO to manage care, the participating physicians and related healthcare professionals receive a steady flow of patients through the HMO. A consumer who obtains care through an HMO must receive services from the healthcare professionals in the HMO network. Otherwise, the HMO will not cover medical expenses. The HMO manages policyholder care through a main point of contact—the primary care physician—who provides care and makes referrals when necessary.
The major benefit of an HMO is affordability. By managing care through the primary care physician, the HMO can contain many costs and offer lower premiums. To help keep premiums low, HMOs require members to pay a flat fee—a co-payment or co-pay—when obtaining many services, including doctor office visits and prescription medications. HMOs also control costs by emphasizing wellness over treatment. By promoting preventative measures such as screenings, mammograms, and PAP smears, the HMO is able to detect and arrest medical conditions before they become more costly to treat. HMOs also cover medical services such as vision care, dental care, and psychiatry.