Architect of the HMO, dead at 95

Dr. Paul M. Ellwood Jr., architect of the HMO, is dead at 95…

Dr. Paul M. Ellwood Jr., who changed the way millions of Americans receive private medical services by developing — and naming — the model for managed care known as the health maintenance organization, died on Monday in Bellingham, Wash. He was 95.

HMOs say they provide high-quality services while cutting overlapping medical consultations and unnecessary treatments and hospitalizations. But for decades critics have argued that prepaid plans invite cursory examinations and skimpy care. Studies have shown that elderly and poor patients fare worse in HMOs, and some patients complain that the rules unfairly limit their choice of doctors and their access to specialists and costlier treatments.

Dr. Ellwood, too, worried about the effects of cost controls on quality of care, especially after federal and state policy changes encouraged the growth of for-profit HMOs. As HMOs grew, merged, and became enormously profitable, he repeatedly voiced disappointment with the way his original ideas had worked out in practice.

I had HMO health coverage with two different Fortune 500 employers in the late 1980’s and 1990’s and found them to be excellent. But with time, the concept got corrupted by the arrival of Jack Welch-trained MBAs with the focus on improvments to Executive Compensation fueled by cutting expenses with a lower quality list of doctors and hospitals, and bureaucratic hurdles to accessing the health care you’ve paid for.

It’s what makes America exceptional.