Final answer:
Employers often select health maintenance organizations (HMOs) as a method of health care delivery to ensure discounted costs and controlled utilization of healthcare services. HMOs pay providers based on patient numbers, incentivizing efficient care management and mitigating adverse selection and moral hazards in health insurance markets.
Step-by-step explanation:
The statement suggests that health care delivery allows employers to choose specific health care providers who offer discounted prices and adhere to strict utilization controls. This is a description typically associated with health maintenance organizations (HMOs) within the health insurance market. Employers often select HMOs because they mix groups of people with different health risks, helping to mitigate the insurance provider's concern about attracting only high-risk individuals, thereby addressing the issue of adverse selection.
HMOs reimburse medical care providers based on the number of patients they care for, rather than the traditional fee-for-service model where services are billed individually. This often leads to discounted rates as health providers have an incentive to manage care efficiently. The transition towards HMOs also aims to reduce moral hazards by imposing healthcare provider incentives to deliver care without over-provisioning, due to the fixed amount received per patient.