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Twin Town High (vol. 8) |
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Two terms explained
Wednesday 29 November @ 13:46:34 |
 by KIP SULLIVAN
Health maintenance organization. Proponents of HMOs have never put forth a clear definition of “health maintenance organization.” Federal and state statutory definitions of HMOs are of little help because they are extraordinarily vague. Generally speaking, the phrase has gone through two definitions—a relatively specific definition in the early years of the phrase’s history, and a very loose definition today. When the phrase was invented in 1970, it referred to health insurance companies: that allowed enrollees to see only certain doctors; that required the doctors it contracted with to see only that company’s enrollees; that paid its doctors using methods that encouraged doctors to deny unnecessary services (and in theory, to order all necessary services); and that amended or vetoed decisions made by its doctors. Today the phrase HMO has come to mean any insurance company which gives its doctors financial incentives to deny care or which amends or vetoes physician decisions. By this latter definition, virtually all insurance companies in existence today are HMOs. The text of this article uses the modern definition of HMO.
Single-payer system. This phrase refers to a system in which one government agency replaces multiple insurance companies with a single agency or board. To put this another way, under a single-payer, the one payer reimburses clinics and hospitals directly; it does not funnel money through insurance companies. This switch from hundreds of insurance companies (it’s more like thousands if we’re talking about the national level) to one government payer cuts administrative costs in half and total health care costs by 10 to 15 percent. The single-payer system also cuts drug prices, specialist fees, and fraud, but these savings are smaller than the administrative savings achieved by single-payer systems. ||
Kip Sullivan is a member of the steering committee of the Minnesota Universal Health Care Coalition, which represents 12 organizations. He is the author of more than 100 articles about health policy, and of a new book entitled The Health Care Mess, available at Arise Bookstore, Amazon Books, Mayday Books, Magers and Quinn, and Orr Books in Minneapolis, Mikawbers’ and Amore Coffee in St. Paul, and at authorhouse.com and muhcc.org.
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