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Define
a. HMO- Health Maintenance Organization
A mode of health financing that is established mainly in the US to curb the medical
utilization among insurance companies. It has more control over the use of
healthcare benefits and therefore able to make utilization of health goods and
services cost more effective (POLICARPIO, 2006)
c. Point of Service
another type of managed care group health insurance with characteristics of both an
HMO and a PPO. There is more flexibility than in the HMO plans and less than in a
PPO.
References:
Department of Health Office of the Secretary. Administrative Order No. 34. (1994, July 20), Manila.
LePore, P. (2012, September 10). MANAGED CARE AND ITS VARIATIONS. Available:
http://www.acponline.org/residents_fellows/career_counseling/managed_care.htm
Point of Service Plans (POS Plans) (2012, September 10). Available: http://www.medhealthinsurance.com/posplan.htm
Policario, J.D. (2006) Economics in Health. Quezon City. C & E Publishing, Inc.
PPO Definition (2012, September 10). Available: http://www.aappo.org/index.cfm?pageid=11
Group models of either type share some of the advantages of staff-model HMOs. Conducting utilization reviews,
implementing clinical guidelines, and standardizing processes of care is facilitated in this model.
For the physician working in this type of setting, the benefits are also similar to those found in a staff-model HMO.
Hours tend to be more regular and physicians are salaried. Physicians are more like employees in this model also, as
opposed to independent contractors. The group exerts a certain amount of control over the way physicians practice
through utilization mechanisms, productivity requirements, and the like.
Network-Model HMOs - In this model, an HMO contracts with several groups of physicians to provide services to the
HMO's members. The HMO may contract with several large multi-specialty groups or with many groups of primary
care practitioners. Physicians maintain their own offices and are often compensated through a payment method know
as capitation. For a pre-defined amount per member per month (PMPM), the group agrees to provide all needed
services for a specific population of patients. Physicians in this type of arrangement are often said to be assuming
"risk" because they are at risk for the cost of the care of the patients in the network. In this type of arrangement,
physicians may see patients that are non-HMO members.
Physicians in network-model HMOs maintain a fair amount of autonomy in that they continue to practice in their own
offices, see non-HMO as well as HMO patients, and generally set the parameters for their work setting.
One of the ways in which the HMO is able to control costs and improve quality is through the development and use of
practice guidelines, utilization review programs, and quality-assurance programs. Physicians participating in these
arrangements must accept a certain amount of oversight related to the way they practice medicine.
Independent-Practice Association (IPA) - This is one of the most loosely organized managed care entities. In this
model, physicians form an intermediary organization that contracts with payers, including HMOs, to provide services
in return for a negotiated rate. Physicians work from their own offices and are not limited in terms of the patients they
may see. In this model, reimbursement may involve capitation or discounted fee for service.
This model helps physicians achieve some of the benefits of belonging to a large group for negotiating purposes
while allowing physicians to maintain a great deal of autonomy in their individual practices.
There are benefits (and detriments) to practicing in any of these settings. If personal and professional autonomy are
high on your list of requirements for professional satisfaction, you might be happier in your own office and joining an
independent practice association. If freedom from business issues and structured office time is more to your liking, a
staff-model HMO might suit you best.
PPO Definition
http://www.aappo.org/index.cfm?pageid=11
A Preferred Provider Organization (PPO) is a health care delivery system where providers contract with the
PPO at various reimbursement levels in return for patient steerage into their practices and/or timely payment.
PPOs differ from other health care delivery systems in the way they are financed, including providing more
choice, benefit flexibility and enrollee access to providers and medical services both in and out-of-network.
There are two types of PPOs:
A non-risk PPO's primary focus is to contract with providers in a geographical area to form an
interconnected network of providers and services. The non-risk PPO network leases and/or "rents" its
network for a fee to insurance companies, self-insured employers, union trusts, third-party
administrators (TPAs), business coalitions and associations.
A risk PPO assumes the financial risk for an enrollees medical costs. Traditionally, insurance
companies offer a risk PPO that includes a benefit plan and network services either provided by the
risk PPO or leased from a non-risk PPO.