As noted by Virk (2007), the American health care delivery system has been transformed over time from a capitated or fixed pre-payment contract system into a fee-for-service system, a community health center model, and the current health maintenance organization and its various related program models. Each of these delivery models has resulted in positive clinical and financial outcomes.
For example, the capitated system of the late nineteenth and early twentieth century which was organized by large businesses or philanthropic societies provided preventive as well as emergency care under a relatively low fixed cost, thus enhancing the health of patients while maintaining affordable systems. Similarly, the emergence of fee-for-service and group practices was accompanied by the development of insurance plans that were paid for by individuals or their employers. The group insurance plan spread the cost for health services across a large population, thus reducing individual out-of-pocket expenses for medical care.
The Center for Health Transformation (2006) takes the position that during the community health era the expansion of services to the uninsured redefined the role of health care delivery and expanded its target market. However, this particular model has fallen out of favor and has been replaced with large scale "charity" hospitals or the use of emergency room services by those who receive Medicaid and Medicare. The expansion of public health finance has resulted in significant improvements in the overall health and well-being of the uninsured but it has also placed a financial burden.
The advent of the health maintenance organization (HMOs) and other managed care models was a response to the escalating costs of health services and an effort to streamline service delivery by aggregating group practices to generate economies of scale (Virk, 2007). HMOs are seen as providing positive clinical outcomes becaus...