Explanation: A physician hospital organization makes contract arrangements directly with employers. In this system, physicians and hospitals act as a single entity. In a health maintenance organization (HMO), patients are managed by a gatekeeper physician, who refers them to other medical professionals when necessary. In a preferred provider organization, patients work with a designated network of medical professionals. Feeforservice plans allow the patient to shop around for medical services, the costs of which are initially covered by the patient, who is later reimbursed.