Healthcare Organization

The types of managed care are differentiated by definition, operation, structure, and information needs. `HMOs were the most common type of MCO until commercial insurance companies developed PPOs to compete with HMOs' (Douglas, 2003, p.331). `HMOs are business entities that either arrange for or provide health services to an enrolled population after prepayment of a fixed sum of money, called a premium' (Peden, 1998, p.78). There are three characteristics that an HMO must have. The first is a health care financing and delivery system that provides services for members in a particular geographic area. Second, is ensured access to a complete range of health care services, health maintenance, treatment, and routine checkups. Last, health care must be obtained from voluntary personnel that participate in the HMO. The five HMO models related to the participating physicians are the Staff

Another type of managed care program that was introduced is the Preferred Provider Organization (PPO). A PPO is comprised of a group of physicians, hospitals and other medical service providers who contract with employers, insurance companies or other plan sponsors. The PPO offers discounted pricing to these contracted organizations due to the high volume of business received. PPO’s typically have up-front cost sharing in the form of deductibles and/or co-insurance, which vary depending upon the actual plan chosen.

Point-of-service (POS) health insurance combines several elements from both HMO and PPO plans. Similar to health maintenance organization plans, (HMO), a member is required to choose a primary care physician and seek referrals to network specialists. Like preferred provider organization insurance, (PPO), members have the choice to receive care from non-network providers but typically incur larger out-of-pocket costs for venturing outside the network.

A PPO is a preferred provider organization. A type of health plan that contracts with medical providers,

I chose to save the best for last; I will be talking briefly about Health Maintenance Organization [HMO] as well as its advantages and disadvantages. I chose HMO because it was the first form of Managed Care. The earliest from of HMOs can be seen in a number of prepaid health plans tracing back to 1910 the western clinic in Tahoma, Washington offered lumber mills owners and their employees certain medical services from is providers for a premium of 50 cents. However; the first HMO considered in the United States was the Ross-Loss Medical Group in 1929 as I said earlier.

With a POS plan, members can use doctors who are within the network or those who are not in order to receive their care. If member do choose doctors outside their networks they will have to pay more to have those services performed. With the POS plan members must have a primary care physician. With a PPO plan members have more options over who they can see. Members do not need a primary care physician with this type of plan (What is an HMO? 2009).

Insurance, most notably health insurance, has become a major part of the American lives. Health will always be a major concern for people, so health insurance would be the most bought insurance. Sometimes people get sick unexpectedly, people will usually be thankful that they have insurance but not really know how their insurance works. It is imperative to know how one’s insurance works so one can pick the best plan that will benefit them without being overcharged for services that they do not need. There are three types of insurance plans that are widely used by health insurance companies. They are: FFS (Fee-For-Service Plan), HMO (Health Maintenance Organization), and PPO (Preferred Provider Organization). FFS plans is a little older than the managed care plans, HMO’s and PPO’s, however they are still used today. HMO’s and PPO’s are the most popular health insurance plans used by the insurance companies.

Preferred Provider Organization: With a Preferred Provider Organization (PPO), members pay less for care when they use in-network providers — doctors, hospitals, and pharmacies that are part of the PPO network. The plan also provides coverage when members go to out-of-network providers, but they will pay more. This plan doesn 't require referrals.

Health Maintenance Organization (HMO) was enacted in 1973 it is a prepaid group practice that is operated by the government. The Government helps HMO meet federal standards and provides loans and grants to organizations. Employers having more than twenty five employees offer HMO as an alternative health treatment plan for employees. The federal government reimburses the HMOs on a per capita basis, this means HMOs are paid on a fixed per capita amount. In order for an employer to qualify for HMO they must provide proof they can provide comprehensive health care and show performance reports such as medical records to the offices of department of Health and Human Services (DHHS). HMO plans have a primary care physician also known as (PCP)

HMOs multiplied rapidly with the new federal giveaways. Managed care, now including PPOs, mushroomed. Employers initially perceived managed care plans as cheaper than traditional fee-for-service insurance. Gradually, they stopped offering a choice of health plans, making individual policies more expensive. HMOs' penetration of the industry had been subsidized into existence. Government had instituted managed care. Today, while overall quality of patient care remains the best in the world, doctors practice medicine in an increasingly intricate web of rationing and regulations: Physicians are stripped of professional autonomy. As patients wander the maze of managed bureaucracy, costs rise and quality deteriorates. Every American dependent on a third party for health coverage is a potential victim of managed care. And state sponsored management of medicine

A PPO health insurance plan allows for more flexibility and more choices when it comes to your healthcare. “This plan offers you a hire reimbursement letter for the treatment that one may receive from a preferred doctor” (Miller, R. J., C., Lavenberg, R. A., & Mackay, I. A. ERISA: 40 years later 2014). Different doctors, hospitals, and organization work together to provide medical care to people who have a PPO health insurance coverage. The doctors that your insurance sends you to will be seen at a discounted rate because you are apart of this group. You can also see non-preferred doctors as well; you will just have to pay a little bit more out of pocket for that

The United States being referred for specialties depends on the insurance plan (Mossialos, Wenzel, Osborn, Sarnak, 2016, pp. 171-177). Health Maintenance Organization (HMO) plans give access to certain healthcare organizations and physician within their network that have agreed to lower rates for their services. The individual must agree to these services to have services covered. All services will be coordinated by the primary care physician PCP. Medicaid coverage is also based on these principles. Preferred Provider Organization (PPO) plan have higher premiums but give more flexibility. PPO allows the individual to see any physician they choose but cost is less if the individual stays within the network. PPO does not require that the individual have a PCP. No referrals for specialist are needed.

Preferred Provider Organizations, or PPOs, are typically the most expensive option offered to an employee. They are seen more in the large corporate spectrum than in small businesses. These plans offer employees several choices of doctors and hospitals. Additionally, they allow workers to see specialists outside of the network, although that typically comes with additional fees out of the individual employee’s pocket.

Two types of health maintenance organization plans that are readily available are the Staff Model HMO and Group Model HMO, and these plans are often called closed-panel plans (Kongstvedt, 2016, p. 63). These HMO plans are considered closed because either the HMO employs the physician, or the physician belongs to the HMO group, thus creating a smaller network for the patient to be seen (Farnham, n.d., Chapter 3). Each HMO plan has its benefits and disadvantages for the physician and patient. Consequently, depending on what the patient needs to meet their medical needs the Staff Model HMO plan or Group Model HMO plan would benefit them. Furthermore, depending on the particular type of freedom the physician is looking for is what would influence the type of plan they would join.

HMO represents an insurance plan in which individuals or their employers pay a fixed monthly fee for services instead of a separate charge for each visit or service under the network healthcare system. The monthly fees remain the same, regardless of types or levels of services provided. The reimbursement amount is according to copay and deductible detail in the contract. With an HMO plan, individuals or employers must select a Primary Care Physician (PCP) from a network of local healthcare providers under the HMO plan. HMO beneficiaries must arrange and visit their PCP first for the service or treatment. PCP will provide a referral to a trusted, in-network specialist or hospital, if they cannot help. However, HMOs don’t cover costs of care from an out-of-network physician, hospital or facility except in the case of a true medical emergency.