Final answer:
In a Health Maintenance Organization (HMO), a patient usually needs a referral from their primary care physician before they can see a specialist. This system contrasts with fee-for-service and helps manage costs and resources within the healthcare system.
Step-by-step explanation:
Patients belonging to a Managed Care Organization (MCO), which is often an Health Maintenance Organization (HMO), usually are required to get a referral from their primary care physician before seeing a specialist. In contrast to a fee-for-service system where medical care providers are reimbursed based on the cost of services provided, HMOs pay providers based on the number of patients they care for, entrusting them with resource allocation for various healthcare services.
The infrastructure of HMOs aims to prevent excessive use of specialist services by introducing this gatekeeping step, which helps manage costs and ensure appropriate use of healthcare resources. Furthermore, the concept of adverse selection in the insurance marketplace is significant as it describes how individuals with greater health risks may find HMO plans more appealing, while those with lower risks might forgo them, thus challenging the system to maintain balance and affordability.