What is a health maintenance organization (HMO)?

A health maintenance organization (HMO) is characterized by its requirement for members to utilize a designated network of healthcare providers. This structure helps control costs and improve care coordination. When enrolled in an HMO, individuals typically select a primary care physician (PCP), who serves as the initial point of contact for healthcare services and referrals to specialists within the network. This model emphasizes preventive care and aims to maintain the health of its members rather than just treating illnesses as they arise.

The focus on a specific network ensures that care is managed efficiently, which can lead to reduced healthcare spending and improved patient outcomes. Therefore, understanding that an HMO operates through a network of providers is crucial for recognizing how these organizations function within the broader healthcare system.