What are health care maintenance organizations (HMO)?

Private health service plans which promise to provide care, not merely pay for it, are often referred to as Health Maintenance Organizations or HMO's. Some are "closed panel plans" and operate out of a central facility, with all the health care providers employed by the HMO. When you go to the facility you may see the doctor on duty, or your "assigned physician".

Other HMOs are more loosely affiliated models, sometimes called Individual Practice Associations (IPA) or open panel plans, where the participating health care providers operate from their own offices. This has been called an HMO without walls, and is similar to a PPO. The difference between a PPO and an IPA is in how the physicians are compensated. With a PPO, you might have to contribute more to the payment for each visit. An IPA means that the network is directly compensating the physician, and there is no doctor’s “bill” to be allocated between you and the insurer.