Vanderbilt Law Review

First Page



The purpose of this Article is twofold. First, we develop a theory for HMO legislation based on an assessment of past experience with HMOs, current problems with the delivery of health services, and different legislative theories that have been advanced by others. Secondly, we use this theory to help evaluate some major issues faced by legislators and administrators in regulating HMOs and to suggest a number of improvements. A recurring theme throughout this analysis is that policymakers have not considered fully all of the economic and political ramifications of the HMO phenomenon. This has helped produce theoretical conflict about HMO policy and legislation that is incomplete and often muddled.

The first part of this Article summarizes the literature on the empirical performance and theory of HMOs. The second part analyzes legislative theories about HMOs that have been advanced by others and proposes a new one, which borrows from previous theories and to some extent synthesizes them. The third part analyzes federal HMO legislation in the context of this theory, and certain legislative changes are proposed.