Define "health maintenance organization" (HMO).

A health maintenance organization (HMO) is fundamentally structured to emphasize preventive care and maintain a network of providers. By encouraging preventative services, HMOs aim to improve overall health outcomes and reduce long-term healthcare costs for both the insured and the insurer. Members of an HMO typically must choose a primary care physician from within the network, and referrals are often required to see specialists. This structure provides coordinated care and minimizes unnecessary treatments and tests.

HMO members benefit from lower premiums and out-of-pocket costs compared to other types of health insurance plans, mainly because the emphasis is on keeping patients healthy and managing care efficiently within the set network. This model allows for a streamlined approach to treating patients while maintaining close oversight of all services provided, fostering an environment that prioritizes health maintenance rather than just treatment after illness occurs.