Final answer:
The key difference between a fee-for-service healthcare system and an HMO system lies in how medical care providers are reimbursed. Fee-for-service reimburses based on the cost of services, while HMOs reimburse based on the number of patients handled.
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 way medical care providers are reimbursed.
In a fee-for-service system, providers are paid according to the cost of services they provide. On the other hand, HMOs reimburse providers based on the number of patients they handle, regardless of the services provided.
For example, in a fee-for-service system, if a patient requires multiple doctor visits, diagnostic tests, and surgery, each of these services will have a separate cost that the insurance company will reimburse based on the fees set by the providers.
In an HMO system, the provider receives a fixed amount per patient enrolled in the plan, regardless of the number or cost of services provided.
These funds are used to cover a range of services, such as doctor visits, medications, and hospital stays, without additional charges to the patient.
In summary, a fee-for-service system focuses on reimbursing providers based on the cost of services, whereas an HMO system focuses on reimbursing providers based on the number of patients they handle.