Cost Containment
Although businesses pursued the HMO model for its alleged cost containment benefits, some research indicates that private HMO plans don't achieve any significant cost savings over non-HMO plans. Although out-of-pocket costs are reduced for consumers, controlling for other factors, the plans don't affect total expenditures and payments by insurers. A possible reason for this failure is that consumers might increase utilization in response to less cost sharing under HMOs. Some have asserted that HMOs (especially those run for profit) actually increase administrative costs and tend to cherry-pick healthier patients.
Read more about this topic: Health Maintenance Organization
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“The cost of a thing is the amount of what I will call life which is required to be exchanged for it, immediately or in the long run.”
—Henry David Thoreau (1817–1862)