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Promoting HMOs as part of a national health strategy began in 1971. An analysis of the data that have been accumulated in the intervening years sheds new light on the issues raised during the legislative hearings prior to the HMO Act of 1973. It describes the developmental process of the HMO program and suggests procedural modifications. It illustrates the difficulty of determining HMO viability during the early stages of operation, examines the varied hospital utilization rates of prepaid group practices and individual practice models, and suggests a hypothesis based on the dynamics of group process and peer pressure for HMO provider behavior.

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