The Rise and Decline of the HMO: A Chapter in U.S. Health-Policy History

Research Report

The Rise and Decline of the HMO: A Chapter in U.S. Health-Policy History

October 13, 2006

Abstract

Bradford Gray traces HMOs movement from the periphery to the center of the American health care system and from depiction as policy solution to policy problem. The paper describes where HMOs came from, how they became important, and how they came to act in ways that generated the managed care backlash of the 1990s. He shows that the problems of the HMO movement came partly from compromises in the original HMO Act of 1973 as well as later policy decisions regarding sources of capital, the ERISA exemption from state regulation, and the Internal Revenue Service's hostility toward nonprofits. (History and Health Policy in the United States edited by Rosemary A. Stevens, Charles E. Rosenberg, and Lawton R. Burns, Rutgers University Press, 2006.)

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