HISTORY TOPICS

Health Maintenance Organizations

Minnesota lays claim to the idea of prepaid health plans—health services operated and administered by medical doctors and professional staff, and managed by health maintenance organizations (HMOs)—a design formulated in the early 1960s by Dr. Paul M. Ellwood, then executive director of the American Rehabilitation Foundation and the Sister Kenny Institute of Minneapolis. To Dr. Ellwood and his associates, the passage of Medicare legislation in 1965 seemed to portend a slide toward "socialized medicine," unwelcome involvement of government in American medicine and patient care.

In proposing his concept of managed care, Dr. Ellwood intended it to act as a bulwark against a looming threat to quality medical care. In cooperation with the Park Nicollet Clinic in Minneapolis, Dr. Ellwood conducted a pilot program in 1972, testing the concept. The pilot program involved 5000 patients from General Mills, the Dayton Company, and other local corporations who were enrolled in this employer-sponsored prepaid health plan.

The Health Maintenance Act of 1973 was passed by the Minnesota Legislature and codified as chapter 62D of the Minnesota Statutes. The statute defined health maintenance organizations (HMOs) as "non-profit organizations, providing comprehensive health maintenance services in exchange for a fixed prepaid sum, regardless of frequency or extent of care required." Even before the enactment of the law, an organization called Group Health, Inc., had been providing medical services to its subscribing members since 1957. And as early as 1944, railroad workers in Two Harbors, Minnesota, had developed a plan for prepaid medical care of their members. These plans stemmed from roots in the "co-operative" movement of the 1930s.

The revolution created in American medicine and health care in the 1960s was, and remains, controversial. Health care concerns have placed the matter high on the national agenda, with calls for reform.

GET STARTED WITH SECONDARY SOURCES:

And Who Shall Care for the Sick?: The Corporate Transformation of Medicine in Minnesota, by Richard L. Reece.
Minneapolis, Minn.: Media Medicus, 1988.
MHS call number: RA 410.54 .M6 R44 1988.
Group Health: An American Success Story in Prepaid Health Care, by Mary Jo and Walter H. Uphoff, in collaboration with Russell K. Lewis.
Minneapolis: Dillon Press, 1980.
MHS call number: Reading Room RA 413.3 .G72 U63.
Health Maintenance Organizations, prepared by Ruth H. Stack and William G. Pollock.
Minneapolis: Twin City Health Care Development Project, Federal Reserve Bank, 1975.
MHS call number: RA 413.5 .U5 T8 1975.
Health Maintenance Organizations: Analysis of Selected HMOs Nationally and Locally: Issue Papers, prepared by the staff, Warren Eustis, William G. Pollock, Ruth H. Stack.
Minneapolis: Twin City Health Care Development Project, Federal Reserve Bank, 1972.
MHS call number: RA 413.5 .U5 T8.
"Where Doctors Scramble for Patients' Dollars," by Edmund Faltermayer.
In Fortune, vol. 98, no. 9: pp.114-116, 118, 120.
MHS call number: RA 413.5.U52 M643.

PRIMARY RESOURCES:

Russell King Lewis Papers.
Files (1925-1966) related to Group Health, an early HMO, and other health cooperatives.
MHS call number: See the green Manuscripts Alpha Notebooks—filed under Lewis, Russell King—for a detailed list of boxes and locator numbers (there are 22 boxes, but not all relate to this topic), or use an electronic version of the inventory.
Minnesota Department of Health
- Health Maintenance Organizations Files (1971-1989).
  These files document the Minnesota Health Department's activities in relation to health maintenance organizations (HMOs) operating in Minnesota, particularly its regulatory authority to review contractual relationships between an HMO and other parties, the quality of care being offered within an HMO, and the financial status of an HMO.
  MHS call number: See the black State Archives Notebooks—filed under Health Department, Health Systems Division—for a detailed list of the box contents and a locator number (there are 4 boxes), or use an electronic version of the inventory.
- Health Policy and Systems Compliance Division Records (1980-1996).
  This archival collection contains subject files on HMOs.
  Restriction: Some of the records may include private data and can only be used with permission. Ask a librarian for help.
  MHS call number: See the black State Archives Notebooks—filed under Health Department, Health Policy and Systems Compliance Division—for a detailed list of boxes and locator numbers (there are 6½ boxes, but not all relate to this topic), or use an electronic version of the inventory.
- Health Systems Division Records.
  This collections consists of subject files (1973-1984) and publications (1979-1980) regarding Health Maintenance Organizations (HMOs) in Minnesota.
  MHS call number: This collection has been acquired, but not processed; consult staff for assistance (there is 1 box of material, but not all relates to this topic).
Minnesota Planning Agency, Health Systems Agencies Records (1972-1986).
Records documenting the health services, plans, and activities of Minnesota regional health systems agencies, including health systems plans, grant applications, annual implementation plans, special services plans, meeting files, and some financial records.
MHS call number: See the black State Archives Notebooks—filed under Planning Agency, Human Services Division, Health Planning Section—for a detailed list of the boxes and locator numbers (there are 5 boxes, but not all relate to this topic).
Northern Pacific Beneficial Association Corporate Records.
Organized in 1882, the Association provided medical, surgical, and hospital care for Northern Pacific Railway (NP) employees, centralized in the creation of seven hospitals: Brainerd, Minnesota; Missoula, Montana; Tacoma, Washington; Glendive, Montana; Pasco, Washington; Staples, Minnesota; and St. Paul, Minnesota. The collection includes minutes (1907-1934), cash books (1882-1949), statements of operations (1898-1899, 1950-1956), and miscellaneous materials documenting the series of hospitals organized by the NP.
MHS call number: See the green Manuscripts Notebooks for the Northern Pacific Railway Company—filed in the NP Branch Line notebooks under Northern Pacific Beneficial Association—for a detailed list of the boxes and locator numbers (there are 10 oversize boxes and 2 volumes, but not all relate to this topic).
Samuel Popper Papers.
This archival collection (1960-1990) contains correspondence, memoranda, committee agendas and minutes, financial data, reports, and printed matter related to Popper's (a University of Minnesota professor) 18-year tenure (1962-1980) on the board of directors of one of the largest health maintenance organizations in the Midwest. The collection primarily documents management issues dealt with by Group Health Plan's board of directors during the 1970s.
MHS call number: P2373; see the green Manuscripts Notebooks—filed under P2373—for a detailed list of boxes (there are 4 boxes), or use an electronic version of the inventory.
Newspapers that may be useful for this topic:
- Minneapolis Star-Tribune (an index for articles published after 1970s is located in the Hubbs Microfilm Room)
- St. Paul Pioneer Press Dispatch (an index for articles published in 1967 or after is located in the Hubbs Microfilm Room)
Check the library catalog for other materials.