Health Care Evolution

The Evolution of HMO
HCS 310
July 11, 2011

The Evolution of HMO
Health Management Organizations (HMO) is a prepaid health care coverage.   In a HMO health care coverage plan, the patient picks a primary care physician (PCP) who takes complete care of the patient’s medical needs.   This PCP has a contract with HMO and has to follow the HMO regulations.   In the case the PCP is not qualified to treat a specific need, he will refer the patient to a specialist.   This type of coverage was thought to be started in Two Harbors, Minnesota.   A railroad community had two doctors retire and leave 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 HMO’s, 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 HMO’s of today.
The first example of an HMO was seen in 1910 in Tacoma, Washington.   A limber mill and their employees prepaid for health care services each month.   Then in 1929 Ross-Loos Medical Group provided medical services to the Las Angeles Department of Water and Power and Las Angeles County employees for a premium every month.   This prompted the fire and police departments to enroll within the year.   By 1951, Ross-Loos had 35,000 people enrolled in their prepaid medical program.   In 1982 Ross-Loos Medical Group became CIGNA Health Care with the merger of Insurance Company of North America and Connecticut General. (Wikipedia, the free encyclopedia, 2011)
In the early 1960’s 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 preformed a pilot program that involved 5000 patients from area corporations in Minnesota to test his concept.   Then in 1973 the Health Maintenance Act was passed...