Are Coordinated Care Health Plans the Future of Healthcare in Hawaiʻi? Why More Healthcare Organizations Are Embracing the HMO Model

Healthcare in Hawaiʻi is facing several challenges at the same time.

Medical care continues to become more expensive. Hawaiʻi has a significant shortage of physicians. Our population is aging, and more people are living with chronic conditions that require ongoing care from primary care physicians, specialists, hospitals, pharmacies, and other healthcare providers.

These realities are causing healthcare organizations across the country to reconsider how care is delivered and how providers are paid.

For many years, much of the healthcare system operated under a fee-for-service model. In simple terms, doctors, hospitals, and other providers were generally paid for each appointment, test, treatment, or procedure they performed.

That system can provide patients with considerable freedom, but it does not always encourage different providers to communicate with one another or take responsibility for the patient’s overall health.

Today, the healthcare system is placing greater emphasis on coordinated and value-based care. Instead of focusing primarily on the number of services provided, these approaches attempt to improve health outcomes, reduce unnecessary duplication, manage chronic conditions more effectively, and use healthcare resources more efficiently.

Health Maintenance Organizations, commonly known as HMOs, are one model designed to support that approach.

This does not necessarily mean HMOs will replace every other type of health plan. It does suggest, however, that HMO-style coordinated care may play an increasingly important role in Hawaiʻi’s healthcare future.

What Is Coordinated Care?

Coordinated care means organizing a patient’s healthcare across multiple providers.

Consider someone living with diabetes, heart disease, and high blood pressure. That person may receive care from a primary care physician, cardiologist, endocrinologist, laboratory, hospital, pharmacy, and other healthcare professionals.

When those providers do not communicate effectively, problems can occur. Tests may be unnecessarily repeated. One physician may not know what another physician prescribed. Follow-up care may be missed after a hospitalization. The patient may be left trying to connect all the pieces independently.

The Centers for Medicare & Medicaid Services explains that fragmented care can contribute to repeated testing, medication conflicts, medical errors, poor transitions from the hospital to home, unnecessary emergency care, and higher costs.

When providers work together and share information, they may be better able to manage chronic conditions, coordinate follow-up care, avoid unnecessary duplication, and provide treatment consistent with the patient’s needs and goals. Learn more about care coordination from CMS.

Coordinated care is not exclusive to HMOs. PPOs, Original Medicare providers, Accountable Care Organizations, and integrated health systems can also coordinate care effectively. However, the structure of an HMO—with its defined provider network and emphasis on primary care—can make coordination easier to organize.

How the HMO Model Supports Coordinated Care

An HMO provides healthcare through a network of participating physicians, hospitals, specialists, and other providers.

Members generally choose a primary care provider who can serve as the central point of their healthcare. Depending on the plan, the primary care provider may also help coordinate specialist care and provide referrals.

For some people, that structure feels restrictive. For others, it provides a clearer path through an increasingly complicated healthcare system.

A coordinated HMO model may encourage:

• Better communication between primary care physicians and specialists

• Greater emphasis on screenings and preventive care

• Earlier management of chronic health conditions

• Follow-up after hospitalization or emergency care

• Improved sharing of medical information

• Reduced duplication of tests and services

• Greater accountability for quality and patient outcomes

• More efficient use of healthcare resources

CMS describes value-based care as an approach that focuses on quality, provider performance, and the patient’s experience. Its accountable-care initiatives encourage doctors, hospitals, and other healthcare professionals to work together to improve coordination and health outcomes while reducing fragmented care and avoiding unnecessary costs. Read CMS’s explanation of accountable and value-based care.

Again, this does not mean every HMO automatically provides excellent coordination. The quality of the provider network, relationships between medical groups, technology, customer service, and follow-up systems all matter.

An HMO creates a structure for coordinated care, but the participating organizations must still execute it well.

Why Coordinated Care May Be Especially Important in Hawaiʻi

Hawaiʻi’s geography creates healthcare challenges that most states do not experience.

Certain specialists and medical services are concentrated on Oʻahu. Neighbor Island residents may have fewer provider choices or need to travel for care. Recruiting and retaining physicians is difficult, and each island has different healthcare needs and resources.

The 2025 Hawaiʻi Physician Workforce Report estimated that the state was short 644 full-time-equivalent physicians based on statewide demand. When the geographic realities of providing specialty care on separate islands were considered, the estimated unmet need increased to 833 physicians. Primary care remained the state’s greatest shortage by specialty. View the 2025 Hawaiʻi Physician Workforce Report.

A coordinated-care model cannot create physicians where none are available. It also does not eliminate concerns about appointment availability or whether a particular doctor participates in a plan.

However, when medical resources are limited, it becomes even more important to use those resources wisely.

Better preventive care may help identify health concerns before they become emergencies. Better chronic-condition management may help people avoid preventable hospitalizations. Better communication can reduce repeated services and make it easier for physicians to understand the complete picture of a patient’s health.

Those are important goals anywhere, but they may be especially valuable in an island state with an aging population and a limited healthcare workforce.

Why Some People Prefer PPOs

Despite the potential advantages of coordinated care, an HMO will not be right for everyone.

Some people are comfortable receiving care within an established network and having a primary care provider help coordinate their treatment. Others place greater importance on having the widest possible choice of doctors and medical facilities.

A Preferred Provider Organization, or PPO, generally offers more flexibility. Depending on the plan, PPO members may be able to see specialists without referrals and receive covered care from providers outside the network, although their costs will typically be higher.

Someone may prefer a PPO because of:

• Greater provider flexibility

• Fewer referral requirements

• Access to covered out-of-network care

• A desire to see a particular specialist

• Frequent travel or extended stays on the mainland

• A preference for managing their own healthcare relationships

That flexibility has real value.

KFF notes that narrower provider networks can help plans control costs, but they can also limit provider choice, affect continuity of care, and make access more difficult for some patients. Read KFF’s analysis of provider networks.

This is the central tradeoff between the two models: greater structure and coordination on one side, and greater flexibility and independence on the other.

Neither preference is wrong.

Are HMOs the Future of Healthcare in Hawaiʻi?

No one can predict exactly how Hawaiʻi’s healthcare system will look ten years from now.

What we can observe is that healthcare is moving toward greater coordination, stronger provider partnerships, increased accountability for patient outcomes, more emphasis on preventive care, and closer management of healthcare costs.

HMOs are one model designed around many of those principles.

Hawaiʻi’s unique geography, physician shortage, growing kūpuna population, and presence of integrated healthcare systems may make coordinated-care models particularly well suited for our state. For those reasons, HMOs may play a larger role in Hawaiʻi’s healthcare future.

That does not mean PPOs or other coverage arrangements will disappear. Provider choice will remain extremely important, especially for people with established specialists, complex medical needs, or lifestyles that require care outside Hawaiʻi.

The future will most likely require a balance: enough coordination to reduce gaps in care and use healthcare resources responsibly, while preserving reasonable access to the physicians and services patients need.

Which Healthcare Model Fits You?

Whether you choose an HMO or a PPO, the most important question is not which type of plan is universally “better.”

The better question is:

Which type of healthcare delivery best fits your medical needs, your doctors, and your lifestyle?

Some people may benefit from having a defined healthcare team and a primary care provider coordinating their treatment. Others may be willing to pay more for greater provider flexibility.

For Medicare beneficiaries, these differences should be considered alongside prescription coverage, medical costs, travel habits, referral requirements, and the availability of doctors and hospitals within each plan’s network.

As healthcare continues to evolve, understanding how care is delivered—not just what benefits appear on a plan summary—will become increasingly important.

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Let PBC Help You Understand Your Options

Premier Benefit Consultants is contracted with Medicare Advantage plans throughout Hawaiʻi. Our independent Medicare agents can help you compare HMO and PPO options, review provider networks, and understand how each plan’s rules may affect your healthcare.

Our assistance is complimentary. Contact PBC to speak with a local Medicare agent and make an informed decision based on your individual needs.

Plan availability, provider networks, benefits, costs, referral requirements, and coverage rules vary by plan and may change from year to year.