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Health Maintanence Organization

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HEALTH MAINTANENCE ORGANIZATION
IVAN D. HALOL
HCS/212 - HEALTH CARE VOCABULARY
APRIL 15, 2013
INSTRUCTOR DEBORAH DOHERTY

In 1990 Kaiser Permanente became the largest Health Maintenance Organization in the country. This was the result of a great man. His name was Dr. Sydney R. Garfield MD. Dr. Garfield is one of the pioneers in voluntary prepaid healthcare plans which was a direct precedent to the federal government enacting the Health Maintenance Organization Act of 1973. Dr. Sydney Garfield opened up a fee for service hospital in 1933. However, insurance companies were slow to compensate his practice and delinquent or non-payment from patients had negative impacts on his practice. This led Dr. Garfield to initiate an agreement with insurance companies to charge a prepaid fee of five cents a day to workers. Under a Health Maintenance Organization (HMO) plan patients and/or employers paid a fixed monthly payment. This provided patients with healthcare that included preventive medicine checkups, immunizations, office visits, and hospitalization. Professionally and personally, Kaiser Permanente has been my employer and healthcare provider for the past several years. The HMO system is cost effective to our patients compared to a pay as you go healthcare plan.
Dr. Sidney Garfield opened up his first hospital in 1933 called Contractor’s General Hospital. Its purpose was to provide healthcare for over 5,000 workers that were constructing the Metropolitan Water District of Southern California’s Aqueduct. This provided water from the Colorado River to the greater Los Angeles area. This hospital initially was a fee-for service. Because of this, the Contractor’s General Hospital was compensated generally by healthcare insurance or at out of pocket expense cost to the patient. This led to slow repayment from the insurance companies or delinquent or non-payment. Dr.

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