Systems Evolution

System Evolution

University of Phoenix

Celia A Langlinais

HCI/500

Week 3

05/14/2012

Systems Evolution

Health Management Organizations (HMO) is a prepaid health care coverage. In an HMO health care coverage plan, the patient picks primary care physicians (PCP) who takes complete care of the patients’ medical needs. This PCP has a contract with HMO and has to follow HMO regulations. In some cases, which the PCP is not qualified to treat a specific medical problem, so the patient is referred to a specialist. This type of coverage was started in Two Harbors, Minnesota. A railroad company had two doctors who retired and left them without any health care service. This prompted the community to buy the hospital from the railroad and create the Community Health Association in 1944. This became the model for today’s HMOs but this is not the first of its kind. In the history of health care there have been programs similar to the HMO coverage, which helped mold the HMOs of today.

The first example of an HMO was seen in 1910 in Tacoma, Washington. A timber mill and their employees paid a premium each month for certain medical services. In 1929 Ross-Loos Medical Group offered medical services to the Los Angeles Department of Water and Power and Los Angeles employees for a premium every month. This prompted the fire and police departments to enroll within the year. In 1982 as Ross-Loos Medical Group continued to grow, they merged with the Insurance Company of North America and Connecticut General to form CIGNA Health Care (Wikipedia, the free encyclopedia, 2011).

In the early 1960s Dr. Paul M. Ellwood formulated the prepaid health care plans in which doctors and professional staff operate and administer the health care services in conjunction with HMO. Then in 1972 Dr. Ellwood initiated the pilot program to test his concept.

This pilot started the push for the Health Management Organizations Act passed by the Minnesota...