The Impact of Michigan’s Health Maintenance Organization Act
Growing dissatisfaction with the shortcomings of the traditional system of health care has led to renewed interest in the Health Maintenance Organization (HMO) concept in recent years. Although some HMO’s have been operating in the United States for over forty years, conditions have been less than favorable to their growth and development. Major obstacles have been opposition from the medical profession, lack of public understanding about the nature and function of HMO’s, and state laws restricting or prohibiting the establishment of HMO’s. In order to create a more favorable legal climate and encourage HMO development, a number of states, including Michigan, have recently enacted laws to provide for the establishment, regulation, and licensing of HMO’s. The effect of these new laws is not yet clear but an analysis of the statutory provisions enables one to predict what that effect might be. This article undertakes an analysis of the Michigan Health Maintenance Organization Act of 1974, discussing the problems antedating enactment and evaluating the provisions of the Act which address those problems.