Question

Define an HMO and list the four main models of organization. Also, define a PPO and the major models of organization. How do HMO and PPOs differ from each other? 

Answer 1

HMO is Health Maintenance Organisation and in this coverage is restricted to a particular group which is known as 'network'. The four major models are

• Staff Model: In this model HMO, physicians and other medical professionals are employees to HMO and have their own offices. Phsyicians can only consult patients who has signedup to the HMO.
• Group Model: In this model physicians and other medial officers are not hired directly. They belong to group of multi speciality physician . The HMO pays the group in bulk.
• Network model:It is a combination of group and open panel model.An HMO will enter into some contracts with multi speciality or independent practise team. to provide medical service. It is one of the most common model.
• Open panel model: Independent practice association is the main center. The independence association will work similar to multi speciality team and the exception is they are allowed to treat non HMO patients.

PPO is a preferred service organisation where there are group of service providers and patients can chosen any physician they wish which is not possible in HMO. The major difference between both are in order to receive coverage under an HMO, first procedure is to see the primary care physician ( leader of each network). PPO offers freedom to visit physician as our wish.HMO offers no coverage outside network but patients can enjoy low premium rate. Avg premium amount for HMO is atleast 15-20% lower than PPO.