Final answer:
An HMO-POS is a hybrid of a Health Maintenance Organization (HMO) and a Point of Service (POS) plan, offering structured in-network healthcare services with the option for patients to seek out-of-network care at an extra cost.
Step-by-step explanation:
An HMO-POS is a hybrid of a Health Maintenance Organization (HMO) and a Point of Service (POS) plan.
An HMO is a prepaid health insurance plan where patients receive healthcare services from providers within an approved network under the guidance of a primary care physician. In contrast, a POS plan is more flexible and allows patients to seek care from providers outside of the HMO network at an additional cost.
The HMO-POS hybrid offers a structured healthcare plan with options for patients to access services outside of the network, combining the elements of managed care and some flexibility similar to fee-for-service for out-of-network services.
Understanding this hybrid plan is essential to grasp how it may help mitigate issues of moral hazard and adverse selection in the healthcare market. By offering a fixed payment structure with some flexibility, HMO-POS plans incentivize providers to deliver efficient care while giving patients the option to seek specialized services when necessary, resulting in a balanced approach to healthcare financing and potentially reducing overall costs.