health maintenance organization (HMO), type of prepaid medical service in which members pay a monthly or yearly fee for all health care, including hospitalization. The term "health maintenance organization" was coined by a health policy analyst, Dr. Paul Ellwood, in the early 1970s. Most HMOs involve physicians engaged in group practice. Because costs to patients are fixed in advance, preventive medicine is stressed, to avoid costly hospitalization. One criticism of HMOs is that patients can use only doctors and specialists who are associated with the organization. Many people who have had a long-standing relationship with a family doctor or specialist have balked at what they see as a limitation of choice. "Open-ended" HMOs offer members the option of seeing a doctor who is not part of the HMO, but the patient must pay additional costs. Proponents of HMOs say that they make health care available to more people and that their emphasis on prevention results in earlier diagnosis and increased health-care savings. Numerous complaints (and lawsuits) have arisen, however, over HMOs' refusals to approve various treatments, and over the concern that the organizations skimp on care in order to realize profits. By 1996 most states had enacted laws restricting HMO rules that were seen as detrimental to patients' health. In 1997 there were 66.8 million Americans enrolled in HMOs. See also health insurance; managed health care.

Measures taken by manufacturers or distributors to control the resale prices of their products (i.e., the prices charged by businesses that resell them). Such measures have been applied to a limited array of goods, including pharmaceuticals, books, photographic supplies, and liquor. Resale price maintenance first began to be employed in the 1880s, reflecting the success of brand promotion and the resulting increase in competition among retailers. It became especially common in the U.S. but declined after World War II. It is prohibited in some countries. The complexity of marketing channels in industrialized countries makes it increasingly difficult for manufacturers to establish and enforce a single price or even a minimum price for their goods. Seealso fair trade law.

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Public or private organization providing comprehensive medical care to subscribers on the basis of a prepaid contract. HMOs deliver a broad range of health services for a fixed fee. In the prepaid group-practice model, physicians are organized into a group practice with one insuring agency. A medical care foundation, or individual practice association, usually involves multiple insurance companies and reimburses members of a loose network of individual physicians from subscribers' prepaid fees. Originally viewed as a way to control health-care costs and meet increased demand for health services, HMOs have become controversial because some limit care by refusing to pay for tests or treatment against their own doctors' advice.

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