The Rise of HMOs

To determine factors associated with differential HMO enrollment growth across metropolitan statistical areas (MSAs), this study examines the periods 1973-1978 and 1988-1993, during which national HMO enrollment grew substantially, and compared the results to determine the stability of statistical relationships. The study finds that the availability of physicians and other physician-related factors are strongly associated with HMO enrollment growth during the 1973-1978 period, but that this is not the case for the 1988-1993 period. Other associations found for the 1973-1978 period were not found for 1988-1993. The research strongly suggests that the factors associated with HMO enrollment growth on the MSA level changed in the 10 years between the two periods. Even though the national industry was still growing rapidly in 1993, a more detailed examination of that growth suggests that the industry was shifting from growth to maturity. The observed transition from continued growth to slow decline during subsequent years reinforces this suggestion.