Final answer:
HMOs aim to offer cost-efficient healthcare by paying providers a fixed amount per enrolled member, prioritizing preventive care, and addressing the moral hazard by balancing necessary care against the quantity of services provided.
Step-by-step explanation:
The goal of a Health Maintenance Organization (HMO) is to provide healthcare to enrolled members for a fixed amount, creating incentives for healthcare providers to focus on preventive care and cost-efficient treatments. This is in contrast to the traditional fee-for-service model where providers are paid based on the quantity of care delivered, leading to potential overuse of medical services. HMOs aim to reduce moral hazard by incentivizing providers to deliver necessary care without unnecessary treatments, potentially lowering overall healthcare costs and encouraging a focus on patient health outcomes rather than the volume of services provided.