Institute:Office of National Coordinator (ONC) Workforce Training Curriculum
Component:Introduction to Health Care and Public Health in the U.S.
Unit:Financing Health Care - Part 1
Lecture:Payors in the U.S. Health Care System
Slide content:Types of Private Health Insurance Indemnity plans - traditional plans Fee for service Simply provide reimbursement to providers Less prevalent today Managed care plans Offer financial incentives to providers and patients Integrate financing and delivery of care within a single system 11
Slide notes:The contract that an insurance company offers is either an indemnity plan or a managed care plan. Generally, the contract for insurance is between the individual or family and the insurance company or payor, but not between the insurance company and provider. There are two types of private health insurance plans. Indemnity plans are traditional plans based on a fee-for-service model. Under these plans, providers are paid according to the services they perform. For example, if you break your arm, the company pays a different fee for each service provided, such as a fee for the x-ray and a fee for applying a cast. Today, relatively few indemnity plans exist. Instead, most health plans are managed care plans. Managed care is a term used to describe the techniques designed to provide comprehensive health care, manage outcomes and quality, and control costs through a managed care organization. Managed care became popular in the 1970s with health maintenance organizations, or HMOs. Managed care controls costs by providing financial incentives to providers and patients. A key difference between the two types of plans is indemnity plans simply finance health care by paying reimbursements to providers. In contrast, managed care plans integrate the financing and delivery of care into one system. The current delivery of "managed care" services is considerably different than the HMO models of the 1970s, 80s, and 90s. 11