Final answer:
Preventive and routine care for HIC members is primarily provided by HMOs, which receive a fixed payment and focus on cost-efficient preventative care. This approach incentivizes providers to manage care effectively, reducing moral hazard and unnecessary services.
Step-by-step explanation:
All preventative and routine medical care provided to a Health Insuring Corporation (HIC) member is typically handled by health maintenance organizations (HMOs). In contrast to the fee-for-service model where providers are reimbursed based on the number of services rendered, HMOs operate on a capitation basis, receiving a fixed payment per member. This payment structure incentivizes HMOs to focus on preventative care and effective cost management, which in turn helps to reduce the incidence of moral hazard by minimizing unnecessary service provision, ensuring care is allocated efficiently, and preventing future health issues and associated costs.
As the health care system evolves, many doctors find themselves compensated through a hybrid model combining managed care arrangements with elements of traditional fee-for-service payments, particularly for the treatment of specific conditions that may warrant additional care beyond the scope of the fixed payment structure.