Managed care Free Essays

1. How do managed care organizations provide comprehensive and quality care while keeping costs down? American health care should essentially be a nonprofit enterprise. However, the privatization of American health care holds that health care in general and hospitals in particular are increasingly operating on a for-profit basis. We will write a custom essay sample on Managed care or any similar topic only for you Order Now In fact, the for-profit hospital sector has accounted for a relatively constant share (about 15 percent) of hospital beds over the last twenty years (Morrisson, 1999). This is why recently the U.S. Congress tries to push more â€Å"consumer-directed† health plan options to avoid cash-strapped managed care organizations (MCOs) to boost their deductibles, raise premiums and even defy federal law by authorizing policy holders to buy prescription drugs from low-cost vendors in Canada (Smith, 23 September 2004). Managed care organizations (MCOs) often apply the traditional fee-for-service models, which do not provide adequate financial controls and utilization incentives for physicians and hospitals to contain the costs of providing healthcare. Under managed care, the needs of the patients are balanced with efforts to provide cost-effective care. Typically, MCOs enroll subscribers by promising to provide all necessary medical care in exchange for a fixed monthly premium. The MCO also contracts with hospitals, physicians, and other healthcare providers to dispense the necessary medical care to its enrollees at a discounted reimbursement rate. In exchange for accepting reduced fees, the caregivers gain access to the MCO’s enrolees (Kirby, Sebastian Hornberger, 1998). A problem with managed care is that employers who offer a health maintenance organization (HMO) to their employees often pay the premium as long as the HMO premium was not higher than the fee-for-service premium. This behavior by employers creates distorted incentives for the HMO in controlling its costs. Enthoven (1993) suggested that this incentive distortion can be corrected when employers design better alternatives for their employer contributions. The employer could contribute a fixed-dollar amount for health insurance with the employee paying the full difference between plans. The greater the portion of the marginal premium paid by the employees is, the stronger the incentive is to choose lower-cost plans. For example, if the employer pays 80 percent of the premium and the employee pays the remainder, then the employee pays only 20 percent of the difference between the low (let’s presume here) HMO premium and the higher fee-for-service premium. HMOs and other managed care arrangements are organized on a prepayment basis that appear in a wide variety of forms. An HMO could hire physicians on a salary, contract with a preexisting group practice of physicians, or contract with physicians who maintain a fee-for-service practice. According to Luft (1991), â€Å"Because specific social, legal, historical, political, and economic aspects of the medical care environment have shaped delivery systems such as the HMO, it is not reasonable to expect that the typical HMO could be transplanted intact to another country† (p. 173). The key to HMO cost savings is the organization’s wide range of medical services, both inpatient and outpatient. In this way, the HMO can receive the cost savings implied by reduced hospital use. This may be difficult to manage in systems where there are separate financing mechanisms for primary care physicians and inpatient care. As Luft (1991, p. 180) remarks. â€Å"If there were no way to shift funds from the ‘hospital side’ to the ‘physician side,’ it would be difficult to reward clinical decision makers for the development of more cost-effective practice styles.† 2. How can the trio of ambulatory care, mental health care and alternative theraies assist in the process of providing quality care at low cost? Ambulatory care-sensitive conditions reflect the quality and availability of primary care services, since they are readily treatable without the need for hospitalization. There are differences in the hospitalization rate for ambulatory care sensitive conditions. Shenkman et al. (2005) had indicated that specialty ambulatory care is important for many children with chronic conditions. However, access to such care may be constrained within managed care environments. The use of primary care providers (PCPs) as gatekeepers for managed care organizations (MCOs) is one commonly used strategy to control specialty care use. Studies of the impact of gatekeeping on children’s receipt of specialty care have resulted in mixed findings. Some studies found more specialty care use in gatekeeping MCOs, compared with non-gatekeeping MCOs. Other researchers found that the replacement of a gatekeeping system with an open-access model increased specialty visits among a group of children with chronic conditions. Although the focus on gatekeeping in general yields some important information, MCOs use many other strategies concomitantly with their PCP gatekeepers, such as capitated payments, financial incentives, and prior authorization procedures. The use of these concomitant strategies may meet the unique needs of children with chronic conditions, including their need for specialty physician care. On the other hand, managed care had been significant contributor on delivery systems for mental health services. Taylor et al. (2001) had indicated that direct and indirect persuasion to provide more cost-effective treatments has been one consequence. The cost-saving qualities and the effectiveness of group interventions have produced clear expectations for an increased use of therapy groups. In the research of Taylor et al. (2001), they compared perceptions and uses of group treatments on a national sample of managed care organizations and mental health providers. Implications of differences and similarities between directors of managed care organizations and treatment providers are examined and discussed across five response categories (familiarity/training perceived effectiveness, likelihood of reimbursement/referral, daily use and expectation for future use). Taylor et al (2001) favored the approach where MCOs calibrate treatment referral/reimbursement decisions. Recently published comparison outcome studies and meta-analyses can and should empirically guide the present treatment delivering systems. Lastly, many managed care organizations have already begun to integrate complementary and alternative medical therapies (CAM) with conventional medical providers. Medical practitioners are obligated to assess CAM therapy with patients. Alternative therapies require professionals to rethink staff competency, patient assessment, and patient-focused care. Medical leaders must understand CAM trends and therapies to better integrate these concepts into health care policy, standards of care, and ethical decisions (Parkman, 2001). Among ambulatory care and mental health care, alternative therapies, or CAM, offers the most favorable and cost-efficient strategy for MCOs. This is because the aging â€Å"baby boom† generation is beginning to experience chronic but non-life threatening conditions, such as joint pain, headaches and menopause-related complaints and they are willing to explore options other than prescription drugs. For health plans, the attraction of offering alternative care products lies in retaining and attracting new members, diversifying their services from competitors in a congested managed care market and in attempts to address current or proposed state mandates (West, 1997). In 1997 alone, expenses for professional services were $21.2 billion, a 45% increase over the earlier 1990 data. Expenses for professional services, herbals, vitamins, diet products, books, and classes totaled $27 billion. Five surveys conducted since 1990 have reported frequent use of CAM, ranging from 30% to 73% by patients suffering from conditions such as cardiovascular disease, cancer, arthritis, HIV and AIDS, multiple sclerosis, and chronic musculoskeletal pain. Futhermore, the demand for CAM by the general public is increasing, despite the fact that its use is largely paid by consumers without coverage by third-party payers. In 1997, Americans spent an estimated $13 billion for visits to CAM providers and an additional $2 billion for commercial diet supplements and over-the-counter megavitamins (Pelletier Astin, 2002). Managed care should not only focus on cost savings, but they should also look into diversifying their services. MCOs have generally contributed to the decline in the U.S. health cost growth rate. Their potential will continue to be limited to the extent that employers fail to offer true financial advantages to consumers who choose the low-cost health plans. Thus, more reforms in the policies should be reviewed and revised so that more people could benefit from the quality health care everyone deserves. References Enthoven, A.C. (1993). The History and Principles of Managed Competition. Health Affairs, supplement, 24-48. Kirby, E.G., Sebastian, J.G. and Hornberger, K.D. (1998, Jan/Feb). The Effect of Normative Social forces on Managed Care Organizations: Implications for Strategic management/Practitioner Response. Journal of Healthcare Management. 43(1):81-106. Luft, H. (1991). Translating the U.S. HMO Experience to Other Health System. Health Affairs 10:172-186. Morrison, I. (1999). Health Care in the New Millennium. NY: John Wiley Sons, Inc. Parkman, C. (2001, February). Alternative Therapies Are Here to Stay. Nursing Management, 32(2): 36-40. Pelletier, K.R. and Astin, J.A. (2002, Jan/Feb). Integration and Reimbursement of Complementary and Alternative Medicine by Managed Care and Insurance Providers: 2000 Update and Cohort Analysis. Alternative Therapies in Health and Medicine, 8(1): 38-44. Shenkman, E., Tian, L. and Schatz, D. (2005, June). Managed Care Organization Characteristics and Outpatient Specialty Care Use Among Children With Chronic Illness. Pediatrics, 115(6): 1547-1555. Smith, C. (2004, Spetember 23). Senate Panel Examines Health Care Choices, Insurance Costs. Knight Ridder Tribune. Taylor, N.T., Burlingame, G.M., Kristensen, K.B., Fuhriman, A. et al. (2001, April). A Survey of Mental Health Care Provider’s and Managed Care Organization Attitudes Toward, Familiarity With, and Use of Group Interventions. International Journal of Group Psychotherapy, 51(2): 243-264. West, D. (1997, November 10). MCOs Integrating Alternative Care. National Underwriter, How to cite Managed care, Essay examples Managed Care Free Essays The article seeks to identify the problems that face managed care organization (MCOs) in contemporary competitive environment which include broad public opinion, competitive realities, need for cost reduction. The article also notes that there has been an increase in health care cost despite the establishment of the managed health care systems implemented through the managed care organizations. Increase in cost remains to be a major concern for patients/consumers. We will write a custom essay sample on Managed Care or any similar topic only for you Order Now Due to this, patients are ready to switch from one plan to another in which cost difference in premium is as little as $15. 0 per month. The article also claims that there has been concern from the society as far as quality of managed healthcare service is concerned. Such concerns encompass: accessibility, and the verification of what is ‘medically necessary’ including the diagnosis tests and referrals. Other concern is freedom of choice. Additionally, perceived quality which is increasingly valued by contemporary patients/consumers has been lacking in the managed care organizations. (Entrepreneur 1998). Strategies or techniques are used to solve the problem or address the issue. This article proposes application of institutional theory to MCOs performance as well as strategic planning. Over emphasizing of institutional theory at the expense of strategic planning will not help the managed care organization to survive in the contemporary competitive environment. The article proposes a strategy that will respond and conform to the needs of the patients and the society at large. Being cost efficient and conforming with socially accepted norms will lead to superior performing of MCOs. Thus, a strategy that encompasses technical requirements as well as conforming to needs of the patients/consumers is very critical for success of any MCO. Only emphasizing or dealing with cost issue is not a strategy for long-term MCO superior performance and success. The article also proposes that all MCOs must demonstrate what contemporary consumers/patients and society expects. These expectations include accessibility, freedom of choice, and perceived quality i. e. always provide value for all patients. ( Entrepreneur1998). My conclusions and recommendations It is clear that the establishment of managed care and the managed care organizations have not been a panacea to all problems facing patients/consumers. Instead, what the patients would like to have is more accessibility to health care services, freedom of choice, better services emphasizing on perfect diagnosis tests, reduction in cost of this services as well as flexibility of managed care systems. This is yet to become a reality. To ensure this, responding to consumers/patients needs will be of great importance. This should include training the health care workers on the best way to serve the patients better, and carrying out perfect diagnosis tests before treating the patients. Increase in number of medical practitioners in MCOs so as to ensure accessibility of these services should also be considered. The managed care plans should also employ modern technology that will improve the quality of health care services. This should encompass better disease diagnosing equipments, and establishing better information systems. Reduction of cost is also very imperative. All inefficiencies and wastage should be checked through a well planned compliance system that should work closely with the human resource department. (Harris, J. S. 1994; Morton-Cooper Bamford 1997; Alexander Amburgey. 1987) Contribution of the article to helping practicing healthcare managers This article is of great help to many practicing healthcare managers. First, it point out the importance of being market oriented i. e. responding to the needs of the patients/consumers and society at large. Factors that determine patients choice of particular health care provider i. e. accessibility of the service, cost of the service, perceived quality such perfect diagnosis test for appropriate medication and so on are also enlisted. The article also emphasis on need of employing a strategy that ensures adherence to technical requirements, cost reduction, high quality, and also freedom of choice to the patients/consumers. Such insight is of great importance to any practicing health care manager who wants to succeed in this career. How to cite Managed Care, Papers