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| 2 |
Promotion
of HMO’s in the mid 1970’s
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· |
HMO’s
are believed by many to promote a more efficient form
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of
practicing medicine
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· |
Evidence
is overwhelming that HMO’s achieve savings by
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realizing
lower rates of hospitalization among their patients
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than
would otherwise be expected. State
governments have
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contributed
to efforts to introduce reforms into the system by
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permitting
the creation of preferred provider organizations
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(PPO)
these schemes constrain costs by ensuring consumers to
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seek
care from the least costly providers and hospitals in their
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communities
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| 2 |
In
spite of all the policies enacted in recent years, health
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care
costs increase every year
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· |
In
1989 total health expenditures jumped to 10.4%
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– |
Health
spending over 15% of federal budget
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– |
Medicaid
expenditures represent as much as 20% of state
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budgets
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