Final answer:
Managed care encompasses various models aimed at delivering efficient healthcare by aligning provider incentives with cost containment. Fee-for-service and HMOs represent traditional and alternative compensation structures. The primary goal is to overcome issues such as moral hazard and adverse selection in health insurance markets.
Step-by-step explanation:
The question presented deals with different models of managed care within the health care system. Managed care is a system that seeks to provide quality care while controlling costs. In the fee-for-service system, providers receive payment based on the services they render. An alternative is the health maintenance organization (HMO), where providers are paid a fixed amount per patient. Managed care aims to reduce the moral hazard by aligning the incentives of healthcare providers with the cost-effectiveness and efficiency of care. The creation of models such as EPOs, IDSs, group models, IPAs, and PPOs all reflect attempts to improve healthcare delivery and mitigate adverse selection and moral hazard in health insurance markets.