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This report uses breakeven analysis to assess the financial feasibility of two health maintenance organization (HMO) models which have received considerable support from health-care professionals as potentially viable organizations in rural areas. The two models analyzed, the individual practice association and satellite clinic, represent quite different organizational and financial structures. Enrollment levels required for each HMO model to attain financial viability for specified premium rates are calculated. In addition, the effects of varying key health-care utilization rates on an HMO's financial position are assessed. This information should be of interest to extension agents and others who are working with groups contemplating a variety of health initiatives.
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Maine Agricultural Experiment Station
Health maintenance organizations, rural health services, Maine
Health and Medical Administration | Health Economics
Skinner, S.P., B.S. Bridges, S.D. Reiling, and D.A. Watkins. 1982. A breakeven analysis of two rural health maintenance organization models. Maine Agriculture Experiment Station Bulletin 789.