As our world changes, so does our language. This column presents definitions of terms that are part of the new health care reform lexicon.
HMO vs. PPO
Health-Maintenance Organization (HMO). A prepaid health plan in which doctors are paid a fixed fee to treat patients covered by the plan (see capitation). HMOs may employ physicians as salaried staff members or they may contract with a specific physician group (a closed panel) or with any physician in a community who can accept capitation (an open panel). Preferred-Provider Organization (PPO). An organization that contracts with "preferred" physicians who agree to provide health care to subscribers for a discounted fee. Some PPOs require doctors to put part of their discounted fee into a risk pool. They get all or part of this money back if their charges don't exceed an annual limit.
------------------------ These definitions are reprinted with permission from the glossary of Revolution -- The New Health Care Takes Shape, authored by noted health-care futurist Russell C. Coile Jr. The published is Whittle Direct Books, 1993.
