Reduces cost by giving the providers an incentive to avoid supplying services. There are now 574 HMOs, with 51 million Americans. Reduces cost through discounts. There are now 1036 PPOs, with 50 million Americans. Reduces cost by rationing specialty care.
Providers receive incentives for avoiding such care, or punishments for approving it.
The differences among the various types of plans is diminishing, as each adopts the others' measures to reduce costs and to win customers.