What is the HMO Act and what is its impact on employers?

Abstract

The explosion in health care costs has spurred the development of Health Maintenance Organizations (HMOS). It is predicted that $180 billion will be spent on health care this year. The search for more economical alternatives to the traditional fee-for-service type of care has naturally focused attention on HMOs. Evidence indicates that the cost of HMO services can be one-fourth to one-third less than the cost of traditional care. Such figures make HMOs one of the most important, and least understood, topics confronting employers today.