Will Social Values Influence the Development of HMOs?

Among industrialized nations the United States is relatively unique in relying on a mix of public and private financing and delivery of healthcare: federal and federal-state programs, such as Medicare and Medicaid; employment-based health insurance (primarily HMOs); and state-subsidized insurance pools for high-risk individuals. In recent years, however, there have been efforts to apply the principles of private employment-based health insurance to the other forms of healthcare, and there is speculation that rising healthcare costs can only be addressed by further extending capitated payment plans. This suggests that U.S. healthcare may increasingly be organized according to market principles. For some, this represents a historic departure from an emphasis on public responsibility for healthcare and a sacrifice of the value principles embodied in health relationships between patient and provider. But defenders of HMOs and a larger role for markets argue that managed care allows for a more rational allocation of scarce healthcare resources by minimizing inefficient low-benefit–high-cost care. More individuals receive essential care if inessential care is eliminated. HMOs are also said to encourage non-HMOs to provide lower priced healthcare.