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Managed Care Organization and Health Maintenance Organization Structure

Managed Care Organization MCO and Health Maintenance Organization HMO Structure

Proposed MCO/HMO Structure

Introduction Managed Care Organization And Health Maintenance Organization Structure

A Managed Care Organization (MCO) refers to an agency that offers health care services to persons enrolled in the managed care plans it offers. There different types of MCOs that vary depending on how they organized. Each of the MCOs comprises of healthcare providers (such as laboratories, physicians and hospitals) that make up its delivery system. One of the common models of MCOs is the Health Maintenance Organization (HMO). As Kongstvedt (2015) explained, there are different structures of HMO. The structure of HMO that can help to maximize the delivery of healthcare in ethical manner to the patients is the staff model.


Ethical delivery of health care services can be achieved HMO through adopting the most suitable structure or model. There are four major models of HMO, namely staff model, network model, individual practice association model and group model (Teitelbaum & Wilensky, 2012). In the staff model, the HMO employs physicians to provide health care services exclusively to the enrolls. Also, the physicians many not be employees of the HMO, but they can be providing most of their health care services to the enrolls through contractual relationships. The contractual relationship is adopted in situations where the HMO cannot be allowed to employee the physicians by the organizations that have employed them. The critical aspect is that they the physicians provide most of their primary care services to the enrolls of the HMO (Teitelbaum & Wilensky, 2012). To be a rue staff model, the physicians must be controlled by the HMO. The HMO may own healthcare delivery systems such as hospitals if necessary.

The HMO adopting a group model contracts one of more groups of healthcare personnel to provide medical services to the enrolls. Unlike in the staff model, the groups of physicians in the group model are not bound to one HMO (Teitelbaum & Wilensky, 2012). As such, they can provide health care services to one or more HMO. A group can provide specially based healthcare services, primary care or multi-specially based services (Teitelbaum & Wilensky, 2012). The physicians must transfer most or all of their medical practice liabilities and assets to the groups they belong to.

The individual practice association (IPA) model is a group of independent physicians who have come together to provide healthcare services, yet they are not substantively integrated their practices. Such physicians provide medical services to the HMOs, but each of the physicians works independently. The physicians involved use IPA for the purpose of signing contracts with HMOs only (Teitelbaum & Wilensky, 2012). In the US, IPAs are usually created by counties on behalf of physicians. In a network model, the HMO adopts two or three of the models described earlier at the same time (Teitelbaum & Wilensky, 2012). For instance, the HMO can employ physicians, sign contracts with physicians working in groups and use the services of physicians that sign IPA contracts at the same time. The model is usually adopted by HMOs that focus on providing managed care services at low costs.

The structure or model adopted by HMO has a major impact on the ethical delivery of healthcare services to patients. As such, it is essential to adopt a model that will maximize the ethical delivery. One of the factors that influence the effectiveness of delivery of the healthcare services is physician-patient relationship (Kongstvedt, 2015). The previous studies have shown that managed care models can have significant adverse effects on the relationships between physicians and patients. The negative effects usually occur in the cases where the model selected restricts access of physicians by patients, the amount of time the physician spend with the patients is limited and trust of the patients toward physicians is eroded (Kongstvedt, 2015). Thus, the most suitable HMO model is one that does not have such effects and if they are there, they are minimal.

The models in which HMOs employ physicians to work on short-term contracts only have a high likelihood of limiting ethical delivery of the healthcare services. Physicians engaging in group model and IPA contracts interact with the patients for a short period of time (Kongstvedt, 2015). The physicians may renew contracts but in some cases, they do not. In such cases, the physicians fail to develop close and strong relationships with the patients, which is essential in facilitating ethical delivery of care. When the physicians are replaced, the patients face the challenge of trusting the new ones (Kongstvedt, 2015). In such models, the physicians may work for more than one HMO, implying that the time they spend on a single patient may be limited. There might also be restrictions to access to physicians by the patients. Although the HMOs adopting a network model may employ physicians to work exclusively, they can also adopt the other models, hence reducing the likelihood of ethical delivery of healthcare services to all patients (Kongstvedt, 2015). As such, the most suitable structure that can facilitate ethical delivery of the services is the staff model. In addition to preventing the negative effects mentioned above, the model facilitates adherence of physicians to standards of practices of the HMOs.


Overall, the staff model is the most effective in facilitating ethical delivery of healthcare services by HMOs. The model enables physicians to spend enough time with the patients, facilitates access of patients to physicians and increases chances for the patients to develop trust with the physicians. In doing so, the model increases the likelihood of ethical delivery of care. The group, network and IPA models suffer from flaws that might limit ethical delivery of the healthcare services.

  • Kongstvedt, P. R. (2015). Health Insurance and Managed Care. Burlington: Jones & Bartlett Publishers.
  • Teitelbaum, J. B., & Wilensky, S. E. (2012). Essentials of Health Policy and Law. Burlington: Jones & Bartlett Publishers.

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