The Carter administration has started a last-ditch effort to revive the program to start potentially money-saving prepaid health plans before official neglect and bureaucratic snafus kill it.
Officials in the Department of Health, Education and Welfare already have embarked on an operation designed to demonstrate their commitment to the future of health maintenance organizations.
HEW Under Secretary Hale Champion told the Group Health Association of America convention in Los Angeles last month that HEW was "going to get about the business of stimulating the development of more HMOs - and we're going to stay in that busines."
Champion's speech was the most visible part of the administration's effort to rescue a program that, Champion said in an interview last week, is in "bad" shape. "We have lost of internal work to do in the next couple of months to be able to deliver," he said.
Health maintenance organizations, or HMOs as they are commonly called, offer comprehensive medical care to members who pay a flat fee covering themselves and their families. In exchange for the fee, the family receives whatever medical attention it needs usually without any further charge.
One of the main advantages of HMOs, according to proponents, is that they reduce the cost of medical care by holding down unnecessary hospitalization, tests and other procedures. Critics point out that the quality of care can suffer, that chronically ill patients may be excluded from programs and that HMOs have difficulty in rural areas, because of a dispersed population, and in inner cities, because of a higher rate of health problems.
Despite the potential problems, 25 HMOs with more than 4 million members have been operating successfully for more than 10 years. Some HMOs, like the California-based Kaiser-Permanente program and the Washington-area Group Health Association, have been operating since the 1930s. Currently, 177 prepaid plans serve about 6.5 million persons.
In 1971, the Nixon administration committed itself to an ambitious program to enroll 40 million persons in 1,700 HMOs by 1976. When federal legislation was passed in December, 1973, the program had become a demonstration project.
About 28 HMOs, with 250,000 members, have received federal aid in starting. Another 50 or so have applications on file to receive up to $1.6 million in funds to help them get started. Those applications are presently being processed at the rate of about two a month.
According to an internal HEW memo written for a meeting last month, "a number of crises will erupt within the next six months unless action is taken."
The memo said that three congressional committees were preparing to hold hearings and that the General Accounting Office, Congress' watch-dog, was preparing a report critical of the HMO program. "The HEW compliance and qualification programs are on the verge of total breakdown," the memo added.
Among the steps under way are:
Moves to speed up the process of writing regulations to implement amendments enacted nine months ago to simplify procedures under the original law.
Simplifying the application form filed to seek approval as a federally qualified HMO. One applicant submitted four copies of its application, each weighing 20 pounds. Additional personnel will also be brought in to reduce the backing of applications.
Champion said he could not say yet whether additional funds will be sought for the program.
According to James Daugherty, legislative counsel to the Group Health Association of America. "Time is not on their side. There's been an awful lot of withering of interest because of delays."
Champion conceded that the administration has a way to go to prove it means business. "You've not only got to say, you've got to show it," he said.