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Submitted By premdeepkaur
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Health Maintenance Organizations (HMOs) stand out from the fee-for-service and preferred provider insurance plans due to a requirement that all members are to select a primary care physician and the selected physician will only be associated with that particular HMO. Unlike the fee-for-service system which gives doctors an economic incentive to order additional tests and schedule extra appointments to incur more capital, the HMO physicians are paid one lump sum per patient regardless of how many tests and appointments were administered. HMOs use fewer particularly expensive procedures, tests, and treatments. An example of a major HMO healthcare organization who is currently leading the integrated health plan model in the United States is Kaiser Permanente. Kaiser Permanente serves more than 9 million members in eight states around the country. HMOs offer a wide range of health care services in exchange for a fixed payment made periodically by the member. HMOs reduce medical expenses by heavily focusing on prevention of diseases. The goal of HMOs is to reduce health-care costs by focusing on preventive care and general health promotion. HMOs’ concentration on preventative care allows possible future health issues to be discovered and treated in the early stages; avoiding and catching illness early saves the HMOs medical expenses on the patient by eliminating the need for hospitalization and treatment for major health issues in the future. For example, every year Kaiser Permanente promotes the flu vaccination to avoid members getting the flu which translates into less visits to the doctor resulting in cost savings for the Kaiser Foundation Health Plan. Another way HMOs reduce costs is by requiring a referral by a primary care physician to be seen by a specialist. The primary care physician acts as a gatekeeper by approving or disapproving an appointment with a...

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