One of the first HMOs created in the United States that has lasted through the 1990s is Kaiser-Permanente Medical Care Program. What makes Kaiser unique is successful use of what is known as a staff model system to expand itself nationally. In this system, a health care plan officially employs its own hospitals and doctors and covers primary and specialty care services. The majority of health care emphasis is on primary care services with a limited focus on specialty care. This type of HMO has little success in places where a significant part of the public favors specialty care for most illnesses or disorders.

The other organizational system used by HMOs is the group model. In a group model, doctors and hospitals are paid fee-for-service. This gives doctors no motivation to save money for the HMO in which they participate. In this system, there is no limit to the amount of service a doctor gives to his or her patients and therefore no limit to the amount of money the health care plan must pay its doctors. There is potential in this model for the HMO plan to experience deficits.

The major criticism currently made of both types of HMOs is the restricted access to doctors and hospitals that they offer their members. Often, members of HMOs believe they are deprived of geographic convenience and the opportunity to select specialists of their choosing. The panels of doctors and hospitals presented by many HMOs tend to exclude some of the most renowned physicians and highly-regarded medical centers in the country. Oxford, however, signed too many of these well-trained specialists and expensive medical centers which attracted vast enrollments of highly-educated, wealthy members. The rich populations experienced extremely high medical utilization rates that plunged Oxford into deep financial crisis. Another cause of Oxford’s infamous deficit was their doctors’ and hospitals’ excess of services that were incurred but not reported ("IBNR"). When Oxford representatives reported to shareholders, they repeatedly underestimated the amount of IBNRs and exaggerated their company’s monetary value for so long that their debt grew immensely. The wealth that had been frequently identified as Oxford’s financial surplus was suddenly revealed to be its debt. After the news of the enormous misrepresentation of IBNR was released, Oxford’s stock value plummeted 40 points in one day.