What's the difference b/w health care plans?
Question:
HMO'S completely eliminates traditional fee-for-service medicine in which doctors are paid for each patient visit. Instead, a doctor agrees to assume responsibility for a certain fixed number of a health plan's patients; and the physician is paid a flat fee every month for each of the patients on his list, whether the doctor actually sees the patient that month or not. This is called a "capitated plan", and a typical capitation amount might be $8 per patient per month. Thus if a doctor agrees to take on 500 of some plan's patients, he is paid a flat $4,000 every month even if he never lays eyes on one of those people all month. HMO's were originally conceived supposedly to give doctors an incentive to focus their energies on keeping patients well (as if they weren't already doing that); so that their patients would need expensive medical care less often.
and
PPO
doctors contract with an insurance company to accept specified reduced fees for their services and the doctors also agree not to bill patients for the difference between their normal fees and what the insurance pays them. The insurance company then markets its group (or "panel") of doctors to major employers to provide medical services at some lower cost to the employer than traditional Indemnity Health Insurance.
Because doctors under this sort of program are paid a fee (albeit discounted) each and every time they see a patient, their natural inclination is to encourage patients to come to the office for evaluation if they call in with some sort of medical problem. In this way, PPO's are like Indemnity Insurance, because there is an incentive for doctors to actually see and examine their patients in person.
The "hook" concealed in this seemingly simple system is that once the majority of doctors in a community are signed up to provide their services at discounted fees to a number of insurance companies,
overall both are bad ...
INDEMNITY INSURANCE (THE BEST)
This is the "traditional" form of health insurance which served well until the large insurance companies began to seize control of the health care delivery system in the past few years. Doctors billed either the patient or the insurance company for their normal charges,
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