Large US Employers Shunning HMOs

Some large employers in Minnesota are complaining that health maintenance organizations, which they had supported as a way to cut their medical costs, have now grown so big that they are stifling competition and medical innovation. From January 1, these firms, including General Mills, Honeywell, Pillsbury and American Express, will begin buying medical services for 400,000 people directly from organized groups of doctors, hospitals and clinics.

Under the plan, about 15 groups of doctors, hospitals and clinics comprising over 90% of primary care doctors and specialists in the Minneapolis-St Paul area will provide a standard package of benefits and comparative information on cost, medical quality and customer service. Employees will get vouchers to buy medical coverage from any one of the groups, whose services will differ in price.

A spokesman for the employers' coalition, the 24-member Buyers' Health Care Action Group, says this will encourage employees to shop around for health care by comparing price, quality and service.