GROWING DIVERSIFICATION IN HMO, 1988-1994

Based on data from annual surveys conducted by the American Associatio n of Health Plans, this article shows growing product diversification among the nation's HMOs. Between 1988 and 1994 the percentage of HMOs offering point-of-service (POS) plans increased from roughly 20 percen t to 74 percent, and the percentage offering PPO plans rose from about 25 percent to 58 percent. Today, most HMOs view themselves as managed care organizations (MCOs) offering an away of health plans and produc ts, not as traditional, close-ended HMOs. Future analysis of the healt h care industry should regard the MCO rather than the HMO as the unit of analysis. One potential developing problem is the growth of self-in sured HMO plans. If current trends continue, self-insured HMO plans co uld erode the insurance function in the HMO market, as occurred in the indemnity market in the 1980s.