Final answer:
Critics argue that some Health Maintenance Organizations prioritize cost reduction over patient care quality, guided by a fixed-payment structure which may incentivize providers to limit services.
Step-by-step explanation:
Critics of Health Maintenance Organizations (HMOs) charge that some HMOs sacrifice quality for cost-cutting. This claim arises from the HMO structure, where medical care providers are reimbursed based on the number of patients they handle, not the services they perform. This fixed-payment arrangement creates an incentive for providers to limit the quantity of care, which might lead to concerns about the quality of healthcare provided. HMOs contrast with a fee-for-service system where providers are paid for each service, potentially encouraging more services but also higher costs. HMOs also face the issue of adverse selection, which occurs when insurance buyers have more knowledge about their health risks than the insurance company, affecting the pricing and availability of insurance plans. Today's healthcare system often uses a blend of HMO and fee-for-service payments to balance out incentives and provide care.