From Mr. H Young
Vice President, Human Resources
Ref: The Need to Switch to HMO
The company has traditionally provided the retired employees of this company a health insurance cover for those who had worked at the company for twenty years. However, with the challenging economic times, the company has to cut down costs of health insurance for employees.
This is by adopting the health maintenance organizations and abandoning the open-ended insurance. Though some of the retirees were not for this idea because of the need to maintain their doctors, the program is still very high for this company. The total number of retirees at this company are 41 and 15 of them suffer from chronic problems. The number of retirees needing our support gives us no choice, but need to cut down costs. Only 15 of them do not suffer from serious health problems.
We still stick with HMOs since they have the best ways of helping this company cut down cost. The HMO is paid at a flat fee. Our only choice for the retirees is to select a plan within HMO showing us their most preferred plan. An example of an HMO is the Accountable Care Organization. It provides coordinated care for those suffering chronic disease. This leads to the improvement of care to patients. The payment is focused on the achievement of health care quality outcomes and goals that lead to cost savings (CMS. Gov 2013). There are many other options which re well understood by retirees to suit their specific needs.
In order to discuss issues on HMO options, we will hold a meeting on July 15th to 17th 213 to explain to you the various available options. Retirees will then be given two months to return a card indicating their selected option. For those failing to return this card, company will select one for them.
CMS. Gov (2013) Accountable care organizations. Retrieved from
On June 26th 2013