The letters HMO (short for Health Maintenance Organization) have very quickly become household words. In general, an HMO may be described as the organizational entity of a health care system which contracts with hospital and medical care providers on behalf of its enrolled members. More precisely, it is an organization, (usually a corporation) which accepts the responsibility to provide, directly or through contract, an agreed upon set of comprehensive health maintenance and treatment services for a volun. tariiy enrolled group of persons and is reimbursed through a premgotiated payment made by or on behalf of each person enrolled in the plan. (U. S. Department of H.E.W., Health Maintenance Organization [1971]).

HMOs can be either for profit or not for profit, although for profit HMOs are rare since establishing a for profit HMO involves the navigation of uncharted waters, containing many obstacles which most HMO organizers would prefer to avoid.