Below is a link to a very illuminating interview with one of the architects of the HMO, Walter McClure. Mr. McClure worked alongside Paul Ellwood to build the HMO in the 1970's and helped to draft much of the federal HMO Act of 1973. 

The HMO Act of 1973 changed the course of health care in America. It melded the delivery and financing of health care into one entity, putting major conflicts of interest in play. The institution that cares for the patient also pays the bill.

CCHF's president wrote an article, "Blame Congress for HMOs" which has been republished in the Congressional Record of the U.S. House of Representatives.

The HMO has morphed into the "health plan" and under Obamacare is changing into the ACO (Accountable Care Organization) which puts doctors under the same corporate roof as hospitals and allows the health plans to send a consolidated/capitated payment to the new ACO. Hospitals and doctors must decide how to divvy it up. Some have called ACOs "HMOs on steroids."

The financial risk now falls on the ACO (hospital/doctors) rather than the health plan. The health plan simply transfers premium dollars in lump sums and tracks data. The ACO must care for patients within the lump sum. The ACO becomes the new insurer. The more expensive you are, the less money for the doctor and the hospital.

Walter McClure, in this interview provides the clearest statement about how far medicine has moved under government control in Minnesota with the 2008 health care reform law signed by Governor Tim Pawlenty

FROM THE SUMMARY OF THE INTERVIEW: "When [McClure's] team started on [cost and quality] assessment in the 1980's, the idea that someone would be looking over a physician's shoulder was considered communism. Physicians were convinced of their right to autonomy." However, by 2008 Minnesota's private and voluntary sector had accomplished a sea change in this culture with 85 percent of providers in the state participating in having their outcomes measured."

The Minnesota 2008 health care reform law signed by Governor Pawlenty (and touted by him in his presidential campaign) was opposed by CCHF. The law mandates that doctors share private patient "encounter data" for quality and cost measurement. The law created the Provider Peer Grouping system which ranks doctors according to "cost" and "quality" as determined by a group that was created by and is funded by major MN health plans -  Minnesota Community Measurement. Payment to doctors and access to patients can be adversely affected by the scores and the rank given.

PPG was almost dismantled in the 2012 session because of complaints from providers about the scoring methodology. In testimony, the MN Department of Health admitted that it was faulty. Unfortunately PPG, and its unconstitutional collection and use of private patient data, remains law today.


August 2012 interview with Walter McClure, one of the chief architects of the HMO and the HMO Act of 1973

Another Interview with Mr. McClure done by Health Affairs - Spring 1988