the patient population.
Definitions and basic facts. Managed health care refers to a "a system that, in varying degrees, integrates the financing and delivery of medical care through contracting with selected physicians and hospitals that provide comprehensive health care services to enrolled members [patients] for a pre-determined monthly premium. All forms of managed care represent attempts to control costs by modifying the behavior of doctors . . . in different ways" (Iglehart, Physicians, 1994, p. 1167).
According to Iglehart (1992), "managed care programs seem endlessly varied, but there are essentially two types of HMO: the group or staff model, in which groups of physicians contract to provide services, and the independent practice association (IPA), in which doctors remain in their own offices but agree to treat patients enrolled in a health plan" (Managed, p. 744). Participating physicians can either be employed directly by HMOs or contract individually or as members of groups or networks to accept payments from HMOs as independent contractors. Other forms of managed care, which are sometimes confused with HMOs, are preferred provider organizations (PPOs) and the point of sale service plans (POSs).
All three organizations offer prepaid group health plans; however, important differences exist among these organizations. PPOs "are networks of individual physicians, medical groups and hospitals that accept a discounted rate of payment in exchange for the plan's efforts to deliver large volumes of patients" (Iglehart, Physicians, p. 1168). Most HMOs select their own physician panels but PPOs rely on insurance companies or employers to do so. A patient has more freedom of choice over the selection of doctors in a PPO than in an HMO. POSs, which are offered by a number of Fortune 500 companies, offer "employees incentives (usually more benefits or lower copayments) to channel their care thro...