Final answer:
Fee-for-service models charge for each healthcare service, possibly leading to more tests and higher costs, whereas HMOs operate on fixed payments to cover members, which can result in more efficient care at the expense of service choice and potential wait times.
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 the payment and care structure. In a fee-for-service model, healthcare providers charge separately for each service they provide, potentially leading to reduced duplicate tests but also incentivizing more services, which can drive up costs. HMOs, on the other hand, receive a fixed payment for a set period to cover their enrolled members, which can incentivize more efficient care to keep costs down but may result in limited service options or longer wait times for certain treatments.