Cost Concepts Essay Example | Topics and Well Written Essays - 500 words

Cost Concepts - Essay Example That is why HMO plans are cheaper than other plans. However, it is noteworthy that the added control over cost is achieved on the cost of quality of the health care. In this type of managed care organization, physicians offer their services at a cheaper rate. This is a mutually beneficial practice in which physicians earn more because of increased business while the patients get the services at a significantly lower cost. The FFS plans provide patients with maximum freedom in terms of choice of physician. Patients can use these plans to select a health care professional of their own choice whom they feel satisfied served by. However, the freedom amplify the cost of service they are given. In many ways, POS resembles HMO. Health care providers have the capitation arrangement for the people enrolled. However, in this type of managed care organization, there are no specific hospitals for doctors to work in. They are compensated annually for every patient they check. â€Å"Increasing the percentage of the patient population in lower-reimbursed, managed segments†¦ [and] †¦changing practice patterns across all patient populations, including higher-utilization unmanaged segments† (Majkowski, 1997). Ways in which physicians may be reimbursed in managed care organizations are numerous and vary from type to type. For example, in HMOs, physicians receive fixed salaries while in POS, the â€Å"network providers are compensated on capitation basis, however the enrollees can choose a provider outside the network, who is reimbursed on fee-for-service basis† (Virk,