What is the function of a "health maintenance organization" (HMO)?

The function of a health maintenance organization (HMO) is to provide a type of health insurance plan that emphasizes preventive care and requires members to use a specific network of healthcare providers to receive full benefits. This structure helps to control healthcare costs and encourages coordinated care, as members are typically required to choose a primary care physician who then manages their overall healthcare and referrals to specialists within the network. This approach ensures that care is organized and follows established guidelines, ultimately promoting better health outcomes and efficient use of resources.

The requirement to receive care from a network of providers is a key characteristic of HMOs, distinguishing them from other types of health insurance that may allow more flexibility in provider choice.