Within the United States of America, the appeal of managed care has increased sufficiently as a method of healthcare administration. The development of managed health care is an attributed backlash to the traditional U.S. health care system (Sekhri 2000). The managed care organization is employer-based offering indemnity insurance and fee-for-service conditioned for both the providers’ and patients’ expectation of the unlimited resources and unrestricted choice (Sekhri 2000). The system is enforced by both user and provider satisfaction through adequate compensation and consumers through unrationed medical care. Methods used in the managed health care organization are consumer oriented for equal benefit. There are various packages offered in the current managed health care system. However, the current state of the managed care system has a backlash that has affected the health system within the United States.
The start of the health care inventions that have become a source of debate today can be traced back to the 20th century. Prior to this the health institution along with the health insurance industry was extremely turbulent experiencing change. Before the Second World War, the model for paying for health care services was purely out of pocket. The earliest forms of health organization were the health maintenance organization (Kongstvedt & Fox n.d.). However, independent clinics such as The Western Clinic in Tacoma Washington offered prepaid medical group practice. Implementation of the practice was opposed by other members of the medical practice. The prominent examples are the Kaiser Foundation Health Plan and the now defunct Group Health Association of Washington, D.C (Kongstvedt & Fox n.d.). In the mid 1960s, the onset of health care cost inflation increased expenditure in the hospitals. The President John F. Kennedy proposed the Part A of the Medicare, financed through taxes on earned income that is similar to the Social Security that offers the benefit of covering mostly health services (Kongstvedt & Fox n.d.). Its functions through a third-party payment system severed links between the provider, the recipient and the one who pays the medical care. The payment system generates increased fees and greater utilization (Kongstvedt & Fox n.d.). The management care rose in popularity due to the accelerated health care costs driven at least in part by a third- party payment system proposed (Kongstvedt & Fox n.d.). The proposed model was the preferred provider organization (PPO) and offered increase in the utilization management by the insurers and the growth of the Health Maintenance Organization. However, the HMOs are of a federal mandate under which the election process is stated in the HMO Act (Kongstvedt & Fox n.d.). The obtaining of federal qualification is based on four principal reasons: the Good Housekeeping Seal of Approval, the dual choice requirement, ensured access to the employer market, the override of state laws applied to federally qualified HMOs and the receipt of federal grants and loans availed in the prior of the Act (Kongstvedt & Fox n.d.).
The management care organization (MCO), as a form of health insurance, has contracts between health care providers and medical facilities to provide the care to the members at reduced costs (Nlm.nih.gov. n.d.). Health Maintained Organization is a model that combines the function of coverage and health care delivery system. The main focus of this system is the management of the utilities and changing payment system so as to better align the goals of the system with those of the providers (Kongstvedt & Fox n.d.). The Primary Care Physicians are the center of the approach with other financial incentives to control the referrals made to specialists (Kongstvedt & Fox n.d.). The particular benefits of the HMOs are the coverage of preventive services, child and women’s preventive services, child and women’s preventive health visits and prescriptive drugs that are not offered by the traditional insurance planned. The Preferred Provider Organization (PPO) is a system offered by individual doctors and hospitals where a discounted fee is offered it the consumer who choice the hospital as their desired choice. The low cost sharing offers a hospital a competitive edge over the other hospitals. Moreover, the cost control measures such as complying with pre-certification requirements for elective hospitalization meant the doctor must be notified before elective admission can occur, and the patient must meet the critical criterion in order to stay covered (Kongstvedt & Fox n.d.). The HMOs revolution includes the care shifting from inpatient to outpatient setting and the shortening of the length of hospital stays (Kongstvedt & Fox n.d.). The Point of Sale (POS) combines the elements of an HMO with the limited payment method of out of network providers. The plan is done through a selection of a single PCP who authorizes the referral services for full time message (Kongstvedt & Fox n.d.). The POS proposals cost division associated to non-authorized amenities. However, the popularity was limited due to the high installment costs in the health care scene. The POS offers the consumer a choice on a particular health plan to be adopted, whether HMO or PPO each with its own perks.
Secondly, the managed care in the United States offers power to the consumer if provided with substandard quality care for the sake of cutting costs (Sekhri, 2000). There are vocal consumers that complaints of the substandard quality of care provided for the sake of cutting costs. However, these are attributive cases of negligence provided by the different managed care organization. The breach in contract offers a reason for dismissal of the physician in the case of PPOs and the payment of hefty compensation packages in the case of HMOs. The role of the managed health care is the financing of the health care costs at a controllable rate and the delivery of medical care at a manageable fee for service rubric. Complaints launched by the different consumers and the providers help in the creation of better health tariffs and premiums.
What’s more, the clinical behavior of the provider within the health setting is limited by the cover premiums offered by the health institution. Managed Care Organization includes the clinical performance of providers, as it combines the fee and distribution of healthcare into a single organization, the purpose of which is to switch the cost, quality, and access of healthcare services for a single brace of health plan enrollees (Schutchfield, Lee, & Patton, 1997). The industry is faced by numerous criticisms linking of the huge profits. As a matter of fact, the charge leveled by the providers and the public have decreased causing the plummeting of the net income in most managed care organization (Sekhri, 2000). However, there is no offered cushioning for the individual consumer. Despite this, the employers are protected by the booming United Sates economy that has been able to absorb the current health care premiums passed down to the employees. If the trend continues, most organizations will force the employees to provide health care coverage (Sekhri, 2000).
The increasing cases of malpractice dominate the reviews of the managed care organization. The substandard care provided can be costly or even provide health risks on the part of the patient. This has resulted in negative reviews. Managed care often evokes strong or negative feedbacks from healthcare providers because they are paid a fixed amount for handling their patients, regardless of the authentic cost, which may influence their level of productivity. This can challenge the interactions between doctors and patients (Claxton, Rae, Panchal, Damico, & Lundy, 2012; Sekhri, 2000). In the view of the negative relationship between the consumer and the provider, most people are not inclined to adopt the health premium as a mode of paying for their health care. The compensations offered by the companies cause the health services is a major setbacks in the health sector. The malpractice complaints generate negative reviews for the health premium. The negative review generates poor profit margins and the dwindling popularity as a health care option
According to Sekhri (2000), the US health care system is unique among the wealthy industrialized countries in the extent of its reliance on the private sector for the financing, purchasing and delivery of health care services. Studies have presented the current public expenditure - conclusively in the federal, state and local administrations - total 45% of overall health expenditure, principally for acquiring health facilities for explicit residents (e.g. the elderly, disabled, veterans, and the poor) (Sekhri, 2000). A managed care organization is accountable for managing the care of residents through a health care organization that observes and organizes care through a complete series of services (primary care through tertiary facilities). It also highlights deterrence and health teaching, inspires the delivery of care in the most suitable location and by the most appropriate provider (e.g. outpatient clinics versus hospitals, primary care physicians versus specialists), and promotes the cost-effective use of services by bring into line inducements (e.g. by tax on providers, cost-sharing by clients) (Sekhri, 2000). The negotiation of the costs is negotiated through price discounts with intended providers, and other managed care tools such as incentive alignment, prevention, health education and the disease management. The networking within the health organizations is established through Management Services Organization that performs the administrative work of contracting and management of the payment practices by the organizations (Sekhri, 2000).
The providers and the consumers are in a backlash of the managed care system. The restricted management of the care cost containment that offers a causal effect on the management goes to the containment practices resulting in higher costs (Pinkovskiy, 2013) the flexibility offered to the patient and consumer choices in the intensity of treating. The health insurance offers a moral hazard that offers to monitor the treatment choice and the economy of care offered by different financial incentives to the insurees. Alternative arrangements involve insuring direct contracting and employing of a physician and the regulation of choice in the care provided by offering more sophisticated financial incentive. Other plans involve the threat of termination or deselecting from the preferred contract network if the insurer deems the physician’s health resources are limited clinically. The restricted model of managed care is the hiring of the physicians whose care it reimburses and offers exclusive contract with a board of specific physicians that forbid its patients from seeking help from another physician in numerous circumstances. As a less restrictive measure, the PPO offers a better form of managed care. It is relatively widespread that contracts a network of physicians receiving discounted feeds in return for the adoption of preferred physician’s within the network for its patients.
Recommendation for the management of the system includes the expansion of the care method. The mergers and acquisitions of smaller companies should be increased in order to meet the population needs of the people and increase the national enrollment within the United States. This will ensure an increment on the profit range in the country. Secondly, the health plans should be converted from a not for profit to a for profit status. This will facilitate the creation and funding of conversion foundations with assets of the nonprofit plan, many of which are the largest grant giving foundation within the country (Kongstvedt & Fox n.d.). Thirdly, the move from solo practice into group practice is a good move. This will increase the consolidation amount among the hospitals in a specified region or local level (Kongstvedt & Fox n.d.). These mergers and acquisitions justify the potential for the rationalization of clinical systems in order to offer greater support.
In conclusion, the managed health care incentives within the United States are a beneficial system that helps in the providers and consumers alike. Different health expenditures are produced by different insurance companies. The health premiums provide the basis for cushioning of health costs. The Health Maintenance Organization and the Prescribed Provider Organization offers proper administration of health care to the people individually. Identifiably, the managed health care system when enforced with technological advancement with the enforcement of Point Of Service terminal and integrative delivery systems. The utilization management shift has shifts from the current impatient care intro the outpatient in order to offer proper services to the consumers by the providers.
Claxton, G., Rae, M., Panchal, N., Damico, A., & Lundy, J. (2012). Employer Health Benefits Annual 2012 Survey. Retrieved from http://ehbs.kff.org/pdf/2012/8345.pdf
Sekhri, N. K. (2000). Managed care: The US experience. Retrieved from http://www.who.int/bulletin/archives/78%286%29830.pdf
Scutchfield F. D., Lee, J., & Patton, D. (1997). Managed care in the United States. Journal of Public Health Medicine, 19(3), 251–254. Retrieved from http://jpubhealth.oxfordjournals.org/content/19/3/251.full.pdf
Fox, P. & Kongstvedt, P. (n.d.). A history of managed health care and health insurance in the United States. [Online] Retrieved from: http://samples.jbpub.com/9781449653316/04646_CH01_Final.pd [Accessed: 21 Feb 2014].
Nlm.nih.gov. (n.d.). Managed care: medlineplus. [Online] Retrieved from: http://www.nlm.nih.gov/medlineplus/managedcare.html [Accessed: 21 Feb 2014].