What payment structure characterizes a health maintenance organization?

A health maintenance organization (HMO) operates on a payment structure where providers receive a fixed sum for each enrolled client, generally on a monthly basis. This model emphasizes preventive care and encourages the efficient use of healthcare services. By receiving a consistent payment regardless of the number of services provided, healthcare providers are incentivized to focus on offering comprehensive and preventive care rather than treating only acute issues. This structure helps to keep costs predictable for both the insurer and the enrolled clients, as monthly premiums cover a range of services.

The nature of this payment system also fosters strong relationships between clients and providers, as the latter are encouraged to manage the health of their patients proactively, often providing services that prevent more costly interventions later on. This contrasts with other structures such as fee-for-service, where costs can escalate based on the volume of care provided.