Ted Kennedy
From the Senate Committee on Human Resources, Subcommittee on Health and Scientific Research, "Health Maintenance Organization Act Amendments of 1978," March 3, 1978:
...As the author of the first HMO bill ever to pass the Senate, I find this spreading support for HMOs truly gratifying. Just a few years ago, proponents of health maintenance organizations faced bitter opposition from organized medicine. And just a few years ago, congressional advocates of HMOs faced an administration which was long on HMO rhetoric, but very short on action.
The current revival of the HMO movement should come as no surprise. HMOs have proven themselves again and again to be effective and efficient mechanisms for delivering health care of the highest quality. HMOs cut hospital utilization by an average of 20 to 25 percent compared to the fee-for-service sector. They cut the total cost of health care by anywhere from 10 to 30 percent. And they accomplish these savings without compromising the quality of care they provide their members.
In fact, many medical experts argue that the peer review built into group practice in the HMO setting promotes a quality of care superior to that found in the traditional health care system.... "In our enthusiasm to see HMOs proliferate throughout this country we should not lose sight of the need to guarantee the quality and integrity of the prepaid plans we create.
The entire point of HMOs was to reduce hospitalization and costs generated by illness by emphasizing preventative medicine and health maintenance--hence the name. The idea was that, like any insurance company, they make more money if you don't get seriously ill in the first place, so they have something to gain by keeping you healthy. Much the same way as automobile insurance companies support safe driving and no alcohol behind the wheel.
The HMO Act of 1973 commanded employers to offer HMOs as an option, something they had avoided up to then, and threw hundreds of millions of dollars of subsidies to them to allow them to gain competitive advantage over other alternatives. One of many examples of how the government throws a monkey wrench into something, then later screams that it needs more power to fix the resulting problems.