What is an hmo how does it differ from a ppo hmo

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9What is an HMO? How does it differ from a PPO?HMO stands for health maintenance organization. It is a type of managed care organization that provides comprehensive medical care for a predetermined monthly fee per enrollee.HMO
a. Capitation is the primary method of payment; risk is shared with providersb. Uses gatekeeping c. Generally, it has a closed paneld. Responsibility for ensuring that services comply with certain established standards of qualitye. It may employ physicians on salaryPPOa. Discounted fee-for-service is the primary method of payment; there is little or no risk sharing with providersb. Does not use gatekeepingc. It allows enrollees to go outside the paneld. It uses only contractual arrangements with physicians
10Briefly explain the four main models for organizing an HMO. Discuss the advantages anddisadvantages of each model.The four main models are (1) staff model, (2) group model, (3) network model, and (4) IPA model. A staff model HMO employs its own salaried physicians. Based on physicians’ productivity and the HMO’s performance, bonuses may also be paid on top of the salary. Physicians work only for their employer HMO and provide services to that HMO’s enrollees. Staff model HMOs must employ physicians in all the common specialties to provide for the healthcare needs of their members. Contracts with selected subspecialties are established for infrequently needed services. There are two main advantages of the staff model: (1) The HMO is able to exercise control over the practice patterns of their physicians. Hence, it is easier to monitor utilization and build a common culture of care delivery. (2) Staff model HMOs also offer
the convenience of “one-stop shopping” for their enrollees, because most common types of services are centrally located in the same clinic. The two main disadvantages are: (1) the large fixed salary expense, which often prevents expansion into new markets, and (2) a limited choice of physicians for the enrollees. A group model HMO contracts with a multispecialty group practice and separately with one or more hospitals to provide comprehensive services to its members. The physicians in the group practice are employed by the group practice, not by the HMO. The HMO generally pays an all-inclusive capitation fee to the group practice to provide physician services to its members. Advantages include (1) leverage regarding financial terms and utilization controls, since the HMO brings a block of business to the group practice; (2) avoiding large expenditures in fixed salaries and facilities, and (3) a certain degree of prestige and perception of quality if the HMO isaffiliated with a reputable multispecialty group practice. Disadvantages include (1) disruption of the delivery of services if the contract is lost and (2) limitations in the choice of physicians.Under the network model, the HMO contracts with more than one medical group practice. A common arrangement is to have contracts only with group practices of primary care physicians.

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