"Managed care" health plans include many different kinds of health insurance and health care plans. All managed care plans place restrictions on access to medical services, some more than others, to lower costs to the plan. Managed care plans include health maintenance organizations (HMOs) and preferred provider organizations (PPOs). Even some conventional health insurance plans that pay physician fees have managed care requirements, such as making you get permission from plan reviewers before entering a hospital for care, except for emergencies.

Almost all of health care has become managed care to some extent. HMOs and PPOs, however, have features that go well beyond the managed care in conventional insurance plans.

An HMO is a health care plan, not just an insurance program. An HMO organizes, controls, pays for, and provides almost every aspect of health care that a member may need. HMOs take care of their members mainly through organized networks of preselected doctors, hospitals, and other health care providers. Today, more than 50 million people are members of HMOs.

An HMO usually only lets you see the doctors and use the hospitals in its network when it pays for your care. If you are treated by a doctor or hospital outside the HMO's network, the cost of your care usually won't be paid for unless the care was authorized ahead of time by the HMO or it was for an emergency.

A PPO plan shares some of the features of both ordinary health insurance and an HMO. PPOs encourage you to use physicians, hospitals, and other health care providers that are part of a preselected network. PPOs pay more of the cost of your care and usually require only a small fee called a co-payment from you when you see your doctor. If you use doctors or hospitals that are not in the PPO network, the plan pays less of your costs. PPOs usually let patients see medical specialists without getting permission first from a primary care doctor, but some PPOs now limit this.

One way to keep your ability to choose your medical specialist when you want to is to seek out and join a "point-of-service" HMO or PPO. These plans are growing quickly because they are less restrictive than ordinary HMO plans and patients want more freedom of choice.

Point-of-service plans will usually cost more than an ordinary HMO or PPO, but they will allow you to use doctors not in the plan without the permission of your primary care doctor or a company employee. You can use this freedom of choice at any time, which is important if you want to see a specialist.

If you get care from HMO or PPO network doctors and hospitals, you'll have little or no deductible, and only a small fee out of your pocket for a visit. If you decide to go outside the plan's network of doctors and hospitals for care under the point-of-service option, you will have claim forms to complete; a bigger out-of-pocket expense, known as a deductible, to pay; and you'll pay part of the rest of the cost, which is called coinsurance.

Managed care plans make more money when they keep you healthy, keep you out of hospitals, reduce the amount of care you receive, and stay within the budget set for each member's total medical care.

HMOs usually pay their doctors and other medical providers an annual salary or a fixed amount of money for each member to provide all the care necessary for that member. PPOs usually pay doctors either a fixed amount of money for each person or they pay based on the doctor's normal fee for a service, minus a discount.

HMOs and PPOs often hold back part of a primary care doctor's payment or use other types of financial inducements to encourage those doctors to reduce the number of tests they order and the number of patients they send to medical specialists or admit to hospitals.

All HMOs and many PPO plans will make you pick a primary care doctor, often described as a "gatekeeper," who provides, arranges, or authorizes all of your care. Primary care doctors are usually family doctors, internal medicine doctors, pediatricians, and obstetrician/gynecologists. This control of your medical care means that you have to get permission from your primary care physician before visiting any medical specialist, such as a skin specialist, orthopaedic surgeon, ear-nose-throat specialist, or eye specialist. An HMO member may go to a hospital only with the advance approval of the primary care doctor except in emergencies.

Some HMOs employ doctors who work in a limited number of plan clinics. If you join one of these HMOs, you may have to choose a new doctor for yourself and members of your family. Other HMOs use doctors who see HMO patients in their own offices, so you may be able to join one of these plans without changing doctors.

You should focus on these key issues critical to your health care for any plan you're considering.