Health maintenance organizations (HMOs) are a relatively new and alternative means of providing health care, combining a risk-sharing (insurance) function with health service provision. Their potential for lowering costs has attracted great interest in the USA and elsewhere, and has raised questions regarding their applicability to other settings. Little attention, however, has been given to critically reviewing the experience with HMOs in other countries, particularly concerning their introduction to settings other than the USA. This paper first reviews the current experience of HMOs in low- and middle-income countries, including Argentina, Bolivia, Brazil, Colombia, Ecuador, Uruguay, Chile and Indonesia. Secondly, the paper reviews the USA experience with HMOs: prerequisites for the establishment of HMOs in the USA are identified and discussed, followed by a review of the performance of HMOs in terms of cost containment, integration of care and quality of care for the elderly and poor. The analysis concludes that difficulties may arise when implementing HMOs in developing countries, and that potential adverse effects on the overall health care delivery system may occur. These should be avoided by careful analyses of a nation's health care system.