Abstract

The lack of centralized budget controls for health expenditures makes the United States health care system vulnerable to substantial cost increases. When these increases exceeded expected insurance premium revenue in the 1980s, pressures developed to reorganize the health system. Insurers and other payers have become more involved in health care decision-making, with the creation of integrated payer/provider organizations. These organizations, called Health Maintenance Organizations (HMOs), exert considerable control over physicians and hospitals, in part by creating cost-containing incentives for all providers. HMOs have been successful in reducing the rate of health care cost increase, while maintaining quality of care. Continuing evolution of these organizations creates the need for improved measures of patient satisfaction and quality of care.