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The
number of Health Maintenance Organizations (HMOs) is growing by leaps and bounds
and is in direct correlation with increasing health care costs.
The
purpose of HMOs is to manage health care by using a prepaid model that
emphasizes early treatment and prevention.This prepayment is referred to as a service-incurred basis and is paid by
the consumer.
This
emphasis on prevention such as routine physicals, diagnostic screening is paid
for in advance.The model is a direct contrast to health insurance plans that
historically did not pay for preventive programs but only paid after the fact
for injury and illness.
In
theory, the HMOs focus on prevention is ultimately supposed to reduce health
care costs.At the same time, HMOs provide medical treatment, hospital and surgical
when needed.
There
is another way that HMOs differ from the traditional health insurance providers.HMOs have two step system that is not shared by insurance companies.Under the traditional method, consumers receive the health care itself
from the medical profession and the financial coverage from the insurance
company.
In
sharp contrast, the HMO provides both the health care services AND the health
care coverage.