Final answer:
The key difference between a fee-for-service healthcare system and an HMO system lies in how healthcare services are paid for and managed.
Step-by-step explanation:
The key difference between a fee-for-service healthcare system and a system based on health maintenance organizations (HMOs) lies in how healthcare services are paid for and managed.
Fee-for-Service Healthcare System
In a fee-for-service system, healthcare providers are paid based on the individual services they provide. Patients have more freedom to choose their healthcare providers and the services they receive. Insurance plans typically reimburse patients for a portion of the costs.
HMO System
In an HMO system, healthcare services are managed by a specific organization. Patients usually have a primary care physician who coordinates their care and refers them to specialists within the HMO's network. The HMO typically pays healthcare providers a fixed amount per patient, regardless of the services provided.
Therefore, the key difference is that in a fee-for-service system, healthcare providers are paid for individual services, while in an HMO system, healthcare services are managed and providers are paid based on a fixed amount per patient. This impacts the patient's choice of providers and the overall management of healthcare services.