Sally's employer has changed insurance groups to save employees and the organization she works for money. The new insurance group offers two different plans to choose from. The new insurance company offers an HMO group plan and a POS group plan

Question

Sally has a physician she has used for years.
a. Which would be the better choice for Sally?
b. What are the advantages and disadvantages of the HMO versus the POS group plan?
c. Which of these plans applies capitation in their plan? How?
d. Is there an advantage to capitation? Are there any disadvantages?

Answer 1

Students' answers should include the following:
a. Sally needs to make a list of the pros and cons of the HMO and the POS group plans. From this, she needs to see which better fits her needs for medical care, physician preference, and where she seeks medical attention. Also, medical expenses out of the pocket should be factored in because she will have the deductible to pay for and any other out of pocket expenses. Here, the students can list the different options available for Sally, taking into consideration different family, as if they were Sally.
b. HMO gives physicians incentives to keep costs low. It is based on the number of participants provided, not the number of services. They rely on keeping their participants healthy and not using a lot of medical services.
POS plan uses the theory that competition controls the cost. Providers discount their services for the opportunity to get more customers. Selecting physicians outside the network will cost more than picking providers inside the discounted network.
Disadvantages with the POS would include having a physician outside the POS network and wanting to keep him or her and not changing to someone inside the network.
Disadvantages with the HMO would be members being responsible for an entire bill of unauthorized care.
Students can discuss other advantages and disadvantages from their pros and cons list from the list they produced in part a of topic 2.
c. After defining what capitation is, the students should apply the definition to each of the various types of insurances plans (HMO, PPO, POS, and PHO) and see who best fits this definition and why.
How do they use it in their plan? It's used by the physician's having the incentive to keep their costs low because they will receive the same amount of pay, regardless of what they provide as service. The participants get paid whether the members require healthcare facilities or not.
d. Advantages to capitation can be applied here from question c above. It is part of the HMO definition and refers to an actual head count of members or participants in an insurance program. Members are encouraged to stay healthy, which includes preventative screening, preventative services, and education.
Disadvantages are authorizations for second opinion and diagnostic testing or screening.
Students can go into detail about what advantages and disadvantages they think capitation has for its participants and if this is a good plan to have.