How HMO Health Insurance Works

Visiting patient

It has been said that one of the best assets a company can have is its employees. Today, most employee-centric activities are focused on providing employees the proper work and life balance. Human resource plays a crucial part in this development and by providing support to their employees they play a key role in the organization's development. Because an important part of human resources services is management and administration, human resource practitioners nowadays get the services of a health maintenance organization or HMO insurance.

HMOs provide the necessary administrative support to human resources. They can also make use of their existing network of medical and insurance providers. They can be local, national or regional, depending on the extent of the services of the HMO, or the deal with their clients.

Below is other pertinent information as to how HMOs operate and how they work for the benefit of the organization and its employees.

  1. Simply put, a company contacts an HMO provider. The company pays (normally prepaid) the HMO to manage their health care benefits. For the company, this means lower administrative cost because the personnel managing the health care benefits is not their full-time employee. This also means access to the network of doctors that a regular company usually does not have. 
  2. A health maintenance organization is a kind of managed care group which manages and gives medical care administration through accredited hospitals, doctors, and other medical practitioners through an agreement or set of restrictions (with a clause or contract) with the HMO.
  3. HMOs offer preventive care, including dental care. Instead of being considered as more expense for the HMO this would actually benefit the HMO because dental care would prevent the employees from developing avoidable conditions that would eventually require more expensive medical expense.
  4. Some treatments are limited (particularly those for aesthetic purposes) to regulate the cost. They carry only those treatments that are directly related to the job of the members (agreed coverage of the program).
  5. Called the staff model, there are HMOs who have doctors and medical practitioners under their own employ. This means that the members can only go to the said doctors (and are usually in the office as with the HMO). Vice-versa, this also means that the doctors can only see patients who are members of the HMO. For most HMO members, this is considered to be too restricted for the services. 
  6. The group models are HMOs who have a network of doctors and physicians that the members can go to. These doctors and other medical practitioners are not in their employ, but rather, can accommodate patients endorsed by the HMO. The doctors will then charge the HMO based only on those treatments and procedures they have given the patients.

Health maintenance organizations are growing steadily, and with more and more companies choosing to use their service because of the benefits and manageability, the HMOs themselves are becoming more competitive. HMOs are raising their standards to keep clients, and attract new ones. Companies can also take advantage of the HMO's network, especially if the company has global or regional operations. Educating yourself on how this intricate system works is often as simple as enrolling in the right online health care classes.


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