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DOCUMENT FESUPE
04295 - [B3394623] (Restricted)
The Sound Health Association: A Federally Qualified Health
Maintenance Organization. HRD-77-119; B-164031(5). December 2,
1977. 26 pp. + 5 appendices (15 pp.).
Report to Rep. Paul G. Rogers, Chairman, House Committee on
Interstate and Fcreign Commerce: Health and -the Environment
Subcommittee; Sen. Edward M. Kennedy, Chairman, Senate Committee
on Human Resources: Health and Scientific Research Subcommittee;
by Elmer B. Stacts, Comptroller General.
Issue Area: Health Programs: Health Haint. Organization's
Compliance with Lam (1214). ther Viability as Alternative
to fee-for-service Mode of Producing Care
Contact: Human Resources Div.
Budget Function: Health: Health Care Services (551).
Organization Concerned: Department )f Health, Education, and
Welfare; Sound Health Association, Inc., Takoma, WA.
Congressional Relevance: House Committz on Interstate and
Foreign Commerce: Health and the Envi.onment Subcommittee;
Senate Conmittee on Human Resources: Health and Scientific
Research Subcommittee.
Authority: Public Health Service Act (42 U.S.C. 246(e)). Health
Maintenance Organization Act of 1973, as amended. P.L.
94-63. 42 U.S.C. 242b (Supp. V). 42 U.S.C. 229b. 42 U.S.C.
299J.
The Sound Health Association, Inc., of Tacoma,
Washington, is a consumer-owned, prepaid health plan and was the
first health maintenance organization qualified by the
Department of Health, Education, and elfare (HEW) under the
Health Maintenance Organization Act. The provision of health
care services on the basis of prepaid rates provides incentives
for the organization to emphasize preventive medicine to reduce
overall health care costs. Findings/Conclusions: The Sound
Health Association appears to be providing comprehensive prepaid
halth care in accordance with the act. Although delays in the
publication of implementing regulations slowed the development
of the association and caused increased operational costs, it
should have enough operating income to meet operating costs by
the second quarter of calendar year 1979 provided that it meets
enrollment projections, improves marketing efforts, and controls
costs. The association requested a waiver of the open enrollment
requirement. HEW did not issue the waiver, but it has not forced
the association to have an open enrollment period. The
association is serving the indigent but has not actively so'ght
enrollmorit of high risk individuals. As of December 31, 1976, it
was providing comprehensive health care services to 6,016
members. The Federal Government requires employers to include a
health maintenance organization in their employees' health
benefit plans. For employees represented by a labor anion, the
health maintenance organization alternative is subject to](ViewImageLocal?handle=hein.gao/gaobaawie0001&div=1&collection=&method=preview&ext=.png&size=3)