Conflicts of Interest in Fee for Service and in HMO's

Abstract

It is now half a decade since the United States Government, acting in accordance with a new law, began to encourage the growth of Health Maintenance Organizations (HMO's) as an alternative to the traditional fee-for-service kind of medical care. In a speech delivered before the LBJ Foundation in New York City on October 27, 1977, Joseph A. Califano, Jr., Secretary of Health, Education, and Welfare (HEW), gave the following justification for this policy:A Health Maintenance Organization provides a comprehensive range of medical benefits, including physicians' services and hospitalization, to its enrolled members and their families for a prearranged, prepaid . . .