DAVID U. HIMMELSTEIN, M.D.; STEFFIE WOOLHANDLER, M.D., M.P.H.
In her thoughtful article on health maintenance organizations (HMOs) and elderly persons, Gillick (1) cites our study (2) to support the notion that HMOs save money on administration. Our report documented that administration accounts for 22% of health spending in the United States, compared with 8% in Canada, and 6% in the United Kingdom. We are unaware of any evidence indicating that HMOs are currently cheaper to administer than is fee-for-service medicine. Administrative costs of HMOs may in fact be higher because of the rising costs of marketing and the amount of bureaucracy that is needed both to exclude patients
HIMMELSTEIN DU, WOOLHANDLER S. A National Health Program for the United States. Ann Intern Med. ;106:783. doi: 10.7326/0003-4819-106-5-783_1
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Published: Ann Intern Med. 1987;106(5):783.
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