250 Butterworth Health System 11.4 Market dIMensIon The market dimension deals with the users of the health-care system. A market is defined in terms of three essential elements: need, access, and purchasing power. The classification and proper grouping of health-care needs define the nature of products and services rendered. These will be discussed in detail under the following section on the care system. However, the classification of users into various groupings reflects their purchasing power and defines the market access mechanism necessary to reach them. 11.4.1 Market access Users of the health-care system are traditionally grouped into the follow- ing institutional models. 11.4.1.1 FEE For SErvICE The traditional insurance companies such as Blue Cross and Blue Shield usually represent fee-for-service arrangements. Members are free to choose their own providers, who are compensated on a cost plus basis. Blue Cross/ Blue Shield of Michigan has converted to a managed payment system; it pays on a diagnostic-related group (DRG) basis. This arrangement has caused the development of the interventional care system. 11.4.1.2 HMoS HMOs were designed as a way to curb the rising costs of health care by managing the members' health-care demand needs. They contract for care on a discounted basis from providers. HMO patients are limited to a pre- selected group of providers. In evolving HMOs, the providers are given a fixed per-member sum, called capitation, to be drawn against for services rendered. Although originally sick-care oriented, HMOs have begun to build prevention, maintenance, and wellness into their services to curb the treatment costs -- hence the term "managed-care plans." 11.4.1.3 IndEpEndEnTS (SElF-InSurEd) The independents, or self-insured populations, include employers who finance health-related charges for their members based on the plans they design for themselves. They may choose to outsource the management of their system to HMOs, to other insurance companies, or to third-party administrators (TPAs). To serve this group effectively requires a great degree of flexibility because each represents a variety of different designs. 11.4.1.4 MEdICArE Medicare is a federal government health insurance plan for those who have reached a certain age (around 65) and have contributed the mini- mum premiums required to the fund. Medicare is beginning to move patients toward managed-care plans.