Question

Which of the following types of organizations are prepaid group health plans where members pay in advance for the services of participating physicians and hospitals that have agreements?

A) Health Maintenance Organization (HMO).
B) Preferred Provider Organization (PPO).
C) Exclusive Provider Organization (EPO).
D) Point of Service (POS).

Answer 1

Health Maintenance Organizations (HMOs) are the type of organizations where members prepay for healthcare services from participating physicians and hospitals.

Step-by-step explanation:

The type of organizations where members pay in advance for the services of participating physicians and hospitals that have agreements are Health Maintenance Organizations (HMOs). In an HMO, medical care providers are paid a fixed amount per person enrolled in the plan, regardless of how many services are provided. This system contrasts with a fee-for-service health financing system, where medical care providers are reimbursed according to the cost of services they provide. HMOs aim to manage costs and healthcare utilization by incentivizing providers to focus on preventive care and cost-effective treatment options, reducing the moral hazard problem inherent in other insurance models, such as the fee-for-service system.