The early Health Maintenance Organizations, like the Kaiser-Permanente Foundation, were based on a certain assumptions. They thought that if cost barriers were removed, people would use much more preventive medicine and thus lower health care costs. They also thought that people would get earlier care when they did get sick, resulting in prompter, less expensive cure. Thus the name "Health Maintenance Organization," which implies care aimed at keeping you healthy, not care which begins after you're ill.

Until then, the traditional pattern of health care in the United States was based on fee-for- service payment. If you got sick, you went to the doctor, who examined you, treated you, and sent you a bill. But as medical costs spiraled upwards (sometimes reaching hundred of thousands of dollars for care), patients needed more and more help with paying the bills. Many of them bought health...