But doctors say insurers dictate treatment by limiting what is covered, and by penalizing physicians who violate treatment guidelines. Patients exercise control by buying health insurance or going without it. Under many HMO contracts, an insurer pays member doctors a monthly fee per patient. But when a patient needs to see a specialist, the doctor, not the insurer, pays the specialist's fee. Advocates say this motivates doctors to practice preventive medicine, but critics argue such contracts tempt doctors to delay expensive tests and treatments until a patient is seriously ill.
Capitation is only one feature of contracts between HMOs and doctors.
Contracts between HMOs and member doctors include treatment guidelines which may limit hospital stays for specific procedures without allowing for variables among patients, and may go as far as defining what may be written in patient charts. Doctors who order too many costly procedures face expulsion from plans. With insurers controlling such a large segment of the health care market, expulsion can mean economic ruin by cutting a doctor off from a supply of paying customers. Public recognition that health plans exert extensive control over what treatments are covered or even discussed has made it harder for insurers to claim they play no role in patient care decisions. Along with this reassessment has come a re-evaluation of certain legal privileges insurers currently enjoy.