Question

As medical groups sought capitation payments from health maintenance organizations (HMOs), what was a major problem for these groups?

		They could not enroll a sufficient number of patients to be financially viable.
		They were inexperienced in managing the financial risk associated with capitation and suffered financially.
		They did not have the information technology to collect quality data to prove their performance to the HMOs.
		They could not recruit a sufficient number of specialists to deliver the services their patients needed.

Answer 1

Ans - They could not enroll a sufficient number of patients to be financially viable. They could not recruit a sufficient number of specialists to deliver the services their patients needed.

Health maintenance organizations (HMOs) are a type of managed care health insurance plan that features a network of health care providers that treat a patient population for a prepaid cost. As prepaid health plans, HMOs combine financing and care delivery and thus allegedly provide an incentive to provide cost-efficient quality care. The motivation for the emergence of HMOs was a desire to align financial and care-quality incentives. Such alignment of incentives contrasts with alternative health care payment structures such as fee-for-service designs where those providing care may have a financial incentive to do so inefficiently.

A health maintenance organization (HMO) is a network or organization that provides health insurance coverage for a monthly or annual fee. An HMO is made up of a group of medical insurance providers that limit coverage to medical care provided through doctors and other providers who are under contract to the HMO.

Capitation payments are payments agreed upon in a capitated contract by a health insurance company and a medical provider. They are fixed, pre-arranged monthly payments received by a physician, clinic or hospital per patient enrolled in a health plan, or per capita.

Health Maintenance Organization (HMO) A type of health insurance plan that usually limits coverage to care from doctors who work for or contract with the HMO. An HMO may require you to live or work in its service area to be eligible for coverage. HMOs often provide integrated care and focus on prevention and wellness.An example of a capitation model would be an IPA which negotiates a fee of $500 per year per patient with an approved PCP. ... Primary capitation is a relationship in which the PCP is paid directly by the IPA for each patient who decides to use that practice.

Patients have a primary care physician with whom they can build a long-term relationship. Typically, the co-pay is low with no deductible. Prices for prescriptions are also low as the HMO can take greater advantage of bulk rates.

These are some of the same reasons why some doctors move away from accepting HMOs. HMO systems are known to pay poorly for everything from office visits to routine medical tests, and many physicians say HMO payments don't even cover their overhead costs. HMOs often pay late.

HMO means "Health Maintenance Organization." HMO plans offer a wide range of healthcare services through a network of providers who agree to supply services to members. With an HMO you'll likely have coverage for a broader range of preventive healthcare services than you would through another type of plan. The more efficient managed care alternatives have no incentive to hold down their premiums because most employers do not pay a fixed amount on behalf of their employees, effectively subsidizing the more expensive options. Many believe that some managed care organizations engage in shadow pricing, content to limit enrollment increases, while profiting by not passing savings back to the purchasers of their product. Financially successful managed care organizations need be only slightly more efficient than the competition to increase their market share. While corporate purchasers of managed care products are not happy with double-digit premium increases, they have nowhere else to turn.

Many physicians still are protected by their ability to shift costs onto essentially unmanaged private payers. Virtually all physicians have considered managed care contracting an obstacle to clinical and financial autonomy. With rare exceptions, providers have not believed that managed care organizations, in fact, might permit them to practice higher-quality medicine, do as well financially, or experience more satisfying practices than is possible in the prevailing, disorganized system. While the theory of managed competition envisions successful managed care “marriages of convenience” between payers and providers, physicians have responded with “a plague on both your houses” to both public and private cost-containing activities.