| Private Insurance |
Medical plan that patients purchase to hedge against medical costs |
- Patient pays monthly premium
- When/if patient is ill, insurance company will pay for bulk of the medical bills
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| Medicare |
Federal government program that makes health care payments to those on Social Security |
- Program pays health care costs for elderly (age >65), disabled, and dependents of disabled
- Part A pays for hospital care
- Part B pays for physician services
- Annual deductibles and copayments are applicable
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| Medicaid |
Joint state/federal program that covers all care for those on welfare |
- Covers hospital stays, physician services, medication, and nursing homes
- There are no deductibles or copayments
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| Health Maintenance Organization (HMO) |
Prepaid group practice that hires physicians or contracts with physicians to provide services |
- Payment is made by capitation: fixed payment for the number of patients in their care
- Physicians receive only minor additional compensation for care when it is provided
- Preventive care is incentivized
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| Preferred provider organization (PPO) |
Fee-for-service at a discount |
- Provider makes money on volume, i.e., less money per patient but more patients
- Efficiency is rewarded
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