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
Famous quotes containing the word cost:
“Keeping accounts, Sir, is of no use when a man is spending his own money, and has nobody to whom he is to account. You won’t eat less beef today, because you have written down what it cost yesterday.”
—Samuel Johnson (1709–1784)