How the Health Care System Works

Written by Free Online Encyclopedia. Posted in Home

The question of how the health care system works–or even what it is–might seem difficult to tackle quickly. However, this video proves otherwise.

The system includes everyone who provides a health care service to patients: doctors, hospitals, clinics, and even pharmacies. Patients often don’t pay providers directly, but their insurance companies pay for services; although patients may be required to pay directly if their insurance plans don’t cover the charges for certain reasons or require a copay.


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These companies may be private or government organizations, as is the case with Medicare, which is funded through taxes. Insurance companies receive compensation from employers and employees who pay into health plans in the form of monthly premiums.

Another organization is known as an HMO, which integrates the insurance company with the medical provider through contractual relationships or even by employing providers directly. Patients are limited to doctors on the HMO’s list. A PPO similarly works from a list but offers more flexibility. Patients can see other providers, and their PPO may still cover some of the cost. But PPOs do not manage providers as closely as HMOs do. Regardless, both services manage the financial risk of healthcare.se.

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