What is the key characteristic of a Health Maintenance Organization?

A Health Maintenance Organization (HMO) is designed to emphasize preventive care and requires members to work within a network of designated healthcare providers. One of the key characteristics of HMOs is the requirement for mandatory referrals for specialist care. This means that when a member needs to see a specialist, they must first consult their primary care physician who will then provide a referral. This structure helps to coordinate care and manage costs effectively, ensuring that specialists are utilized only when necessary and under the guidelines of the primary care provider.

In contrast, some other options suggest practices not aligned with the primary function of an HMO. For instance, having no referrals required for specialists contradicts the essence of the HMO's coordinated care model. A focus on secondary health providers does not capture the preventive and primary care focus of HMOs. While low healthcare coverage costs can be a benefit of HMOs due to their structure, it is not the defining characteristic that differentiates them from other types of healthcare organizations. Thus, the requirement for mandatory referrals for specialist care is essential to understanding how HMOs operate within the healthcare system.