Final answer:
A group of medical providers that bypasses the insurance company to contract directly with patients is called a Direct Primary Care (DPC) organization. This approach can help reduce issues such as adverse selection in insurance markets.
Step-by-step explanation:
A group of medical providers that contracts directly with patients, bypassing the insurance company, is known as a Direct Primary Care (DPC) organization or practice. Unlike traditional fee-for-service health financing systems, where medical care providers receive reimbursement based on the cost of services provided, DPC charges patients a flat monthly fee and provides them with a range of included medical services.
This can mitigate issues like adverse selection, which is prevalent in insurance markets when insurance buyers possess more information about their health risks than the insurance provider, leading to potential imbalances in the insurance pool. In Health Maintenance Organizations (HMOs), providers are paid based on the number of patients they handle rather than services performed, which also impacts resource allocation and cost management.