Managed Care Article The first example of managed care in the form of a Health Maintenance Organization (HMO) dates back to 1910 in the state of Washington, but major growth and development in managed care programs was between 1985 and 2000 (The Origins of Managed Care, 2007). The goal of managed care is to control health care costs, but at the same time deliver a high quality of care, typically within a network of providers (Managed Care, 2015). Americans 65 years old and older rely on Medicare for insurance. As part of the Balance Budget Act of 1997, Medicare beneficiaries were offered a choice to get Medicare Part C from private insurers, consequently changes were made to these plans in 2003, and the managed care plans for Medicare recipients …show more content…
became known collectively as Medicare Advantage (MA) (Medicare Advantage, 2015). Throughout the years there has been a popular misconception that managed care programs deliver lower quality of care by containing costs. This therapist chose an article comparing traditional Medicare (TM) with MA for two chronic diagnoses, diabetes and cardiovascular disease. A study conducted by Landon, Zaslavsky, Saunders, Pawlson, Newhouse, and Ayanian (2015) compared the utilizations of services and quality of ambulatory care for diabetes and cardiovascular disease between MA enrollees and TM beneficiaries in 2007.
MA data for the study included HMOs and Preferred Provider Organizations (PPO) was obtained from Healthcare Effectiveness Data and Information Set measures of Relative Resource Use (RRU) from Centers for Medicare and Medicaid Services and quality data from the National Committee for Quality Assurance. RRU shows how effectively MA plans use physician visits, hospital stays and all other resources to care for members of five chronic conditions; two are diabetes and cardiovascular disease (Resource Use, n.d.). Similar measures were formulated from a random sample of TM claims data matching geographic region and demographic characteristics. The spending categories included inpatient care, surgery and other procedures, and evaluation and management …show more content…
systems. When comparing health care plans for spending; total spending as well as the three spending categories was considerably lower for MA HMO enrollees than for matched TM beneficiaries (Landon et al., 2015). In looking at the results by disease type, total spending and all three categorical spending was 19% less for diabetes for MA enrollees then TM enrollees, similar results were seen for cardiovascular disease (Landon et al., 2015). Additionally visits to the emergency room and hospital inpatient discharges were lower in MA (Landon et al., 2015). The results were also reviewed by type of health care plan, for profit versus not for profit.
In nonprofit HMOs all three categories of spending were lower than the matched TM sample (Landon et al., 2015). Conversely, for profit small HMOs and PPOs total spending was higher for cardiovascular disease, but lower for diabetes (Landon et al., 2015). Lastly, outcome measures were studied pertaining to spending and quality of quality of health care received by health plan characteristics. The results indicated most members if MA plans experienced higher quality for diabetes and cardiovascular disease care then the corresponding TM enrollees (Landon et al., 2015). Little association was seen between spending and quality care with the large, more established nonprofit HMOs having the highest quality and the lowest spending while doing so with significantly lower resources (Landon et al.,
2015). Today, Medicare Advantage represents 31% of beneficiaries (Managed Care, 2015). In reviewing the outcome of this study, one has to personally compare the benefits between TM and MA plans when they become eligible at 65 years old and enrolling in a Medicare Plan. A MA plan may be ideal for an elderly person, who for convenience prefers to stay in one network coordinating services. However, as with all managed health care plans they are subject to such things as prior authorization and referral to see a specialist. Regarding TM, if one has employer sponsored retiree health benefits that supplement TM, as with many of this therapist’s elderly relatives, they have minimal out of pocket expenses.
Membership Services (MSD) at Kaiser Permanente used to be a modest department of sixty staff. However, over the past few years the department has doubled in size, creating minor departmental reorganization. In addition the increase of departmental staffing, several challenges became apparent. The changes included primary job function, as well as the introduction of new network system software which slowed down the processes of other departments. These departments included Claims (who pay the bills for service providers outside of the Kaiser Permanente network), and Patient Business Services (who send invoices to members for services received within Kaiser Permanente). Due to the unforeseen challenges created by the system upgrade, it was decided that MSD would process the calls for both of the affected departments. Unfortunately, this created a catastrophic event of MSD receiving numerous phone calls from upset members—who had received bills a year after the service had been provided. The average Monday call volume had risen from 1,800 to 2,600 calls per day. The average handling time for each phone call had risen as well—from an acceptable standard of 5.6 minutes to an unfavorable 7.2 minutes. The department continued to be kept inundated with these types of calls for the two years that these changes have been effect.
With the passage of the Affordable Care Act (ACA), the Centers for Medicare and Medicaid Services (CMS) has initiated reimbursement based off of patient satisfaction scores (Murphy, 2014). In fact, “CMS plans to base 30% of hospitals ' scores under the value-based purchasing initiative on patient responses to the Hospital Consumer Assessment of Healthcare Providers and Systems survey, or HCAHPS, which measures patient satisfaction” (Daly, 2011, p. 30). Consequently, a hospital’s HCAHPS score could influence 1% of a Medicare’s hospital reimbursement, which could cost between $500,000 and $850,000, depending on the organization (Murphy, 2014).
To guarantee that its members receive appropriate, high level quality care in a cost-effective manner, each managed care organization (MCO) tailors its networks according to the characteristics of the providers, consumers, and competitors in a specific market. Other considerations for creating the network are the managed care organization's own goals for quality, accessibility, cost savings, and member satisfaction. Strategic planning for networks is a continuing process. In addition to an initial evaluation of its markets and goals, the managed care organization must periodically reevaluate its target markets and objectives. After reviewing the markets, then the organization must modify its network strategies accordingly to remain competitive in the rapidly changing healthcare industry. Coventry Health Care, Inc and its affiliated companies recognize the importance of developing and managing an adequate network of qualified providers to serve the need of customers and enrolled members (Coventry Health Care Intranet, Creasy and Spath, http://cvtynet/ ). "A central goal of managed care is containing the costs of delivering care, but the wide variety of organizations typically lumped together under the umbrella of managed care pursue this goal using combination of numerous strategies that vary from market to market and from organization to organization" (Baker , 2000, p.2).
Managed care reimbursement models have contributed to risk avoidance by negotiating discounts, discouraging use, and denying payments for charges that appear to be false. Health care reform has increased awareness to the quality of care providers give, thus shifting the responsibility onto the provider to provide quality care or else be forced to receive reduced reimbursements (Buff & Terrell,
When one examines managed health care and the hospitals that provide the care, a degree of variation is found in the treatment and care of their patients. This variation can be between hospitals or even between physicians within a health care network. For managed care companies the variation may be beneficial. This may provide them with opportunities to save money when it comes to paying for their policy holder’s care, however this large variation may also be detrimental to the insurance company. This would fall into the category of management of utilization, if hospitals and managed care organizations can control treatment utilization, they can control premium costs for both themselves and their customers (Rodwin 1996). If health care organizations can implement prevention as a way to warrant good health with their consumers, insurance companies can also illuminate unnecessary health care. These are just a few examples of how the health care industry can help benefit their patients, but that does not mean every issue involving physician over utilization or quality of care is erased because there is a management mechanism set in place.
Health Maintenance Organizations, or HMO’s, are a very important part of the American health care system. Also referred to as managed care programs, HMO's are combinations of doctors and insurance companies that are formed into one organization. This organization provides treatment to its members at fixed costs and decides on what treatment, if any, will be given based on the patient's or doctor's current health plan. Sometimes, no treatment is given at all. HMO's main concerns are to control costs and supposedly provide the best possible treatment to their patients. But it seems to the naked eye that instead their main goal is to get more people enrolled so that they can maintain or raise current premiums paid by consumers using their service. For HMO's, profit comes first- not patients' lives.
Implemented (along with Medicare) as a part of the Social Security Amendments of 1965, Medicaid’s original purpose was to improve the health of the working poor who might otherwise go without medical care for themselves and their families. Medicaid also assisted low income seniors with cautionary provisions that paid for the costs of nursing facility care and other medical expenses such as premiums and copayments that were not covered through Medicare. Eligibility for Medicaid is usually based on the family’s or individual’s income and assets. When the ACA came into effect in 2010, it began to work with the states to develop a plan to better coordinate the two ...
Formed in 1998, the Managed Care Executive Group (MCEG) is a national organization of U.S. senior health executives who provide an open exchange of shared resources by discussing issues which are currently faced by health care organizations. In the fall of 2011, 61 organizations, which represented 90 responders, ranked the top ten strategic issues for 2012. Although the issues were ranked according to their priority, this report discusses the top three issues which I believe to be the most significant due to the need for competitive and inter-related products, quality care and cost containment.
In order to make ones’ health care coverage more affordable, the nation needs to address the continually increasing medical care costs. Approximately more than one-sixth of the United States economy is devoted to health care spending, such as: soaring prices for medical services, costly prescription drugs, newly advanced medical technology, and even unhealthy lifestyles. Our system is spending approximately $2.7 trillion annually on health care. According to experts, it is estimated that approximately 20%-30% of that spending (approx. $800 billion a year) appears to go towards wasteful, redundant, or even inefficient care.
Managed care dominates health care in the United States. It is any health care delivery system that combines the functions of health insurance and the actual delivery of care, where costs and utilization of services are controlled by methods such as gatekeeping, case management, and utilization review. Different types of managed care plans came into development by three major factors. These factors include choice of providers, different ways of arranging the delivery of services, and payment and risk sharing. Types of managed care organizations include Health Maintenance Organizations (HMOs) which consist of five common models that differ according to how the HMO is related to the participating physicians, Preferred Provider Organizations (PPOs), Exclusive Provider Organizations (EPO), and Point of Service Plans (POS). `The information management system in a managed care organization is determined by the structure of the organization' (Peden,1998, p.90). The goal of a managed care system is to provide subscribers and dependants with needed health care services at the lowest possible cost. Certain managed care plans also focus on prevention by trying to keep members healthy.
The two major components of Medicare, the Hospital Insurance Program (Part A of Medicare) and the supplementary Medical Insurance program (Part B) may be exhausted by the year 2025, another sad fact of the Medicare situation at hand (“Medicare’s Future”). The burden brought about by the unfair dealings of HMO’s is having an adverse affect on the Medicare system. With the incredibly large burden brought about by the large amount of patients that Medicare is handed, it is becoming increasingly difficult to fund the system in the way that is necessary for it to function effectively. Most elderly people over the age of 65 are eligible for Medicare, but for a quite disturbing reason they are not able to reap the benefits of the taxes they have paid. Medicare is a national health plan covering 40 mi...
It is enthralling to note that in spite of the advances in healthcare systems, such as our hospital’s ability to provide patients with lower cost, managed One being the Health Maintenance Organizations (HMO), which was first proposed in the 1960s by Dr. Paul Elwood in the "Health Maintenance Strategy”. The HMO concept was created to decrease increasing health care costs and was set in law as the Health Maintenance Organization Act of 1973, after promotion from the Nixon Administration. HMO would, in exchange for a fee, allow members access to employed physicians and facilities. In return, the HMO received market access and could earn federal development funds.
Accountable care organizations (ACOs) are a new approach to organizing medical care and financing to achieve the of higher quality care, decreased costs, and improved population health. In ACOs, health care providers and in many circumstances, have hospitals share accountability for the health outcomes and expenditures of their patients (DeCamp, 2014). Also, these networks can help coordinate patient care, and provide networks with incentives for quality of care. Also, it helps keeps patients out of the hospital by staying healthy. Also, the Centers for Medicare & Medicaid Services (CMS) have formed a Medicare Shared Service Program, that helps distribute the fee-for -service (Harrison, 2016). Many alternative approaches used in the current health system is bundled payments (Mulestein, 2017). Under bundled episode payments providers receive a predetermined amount for all the care related to a specific condition, such as a knee replacement, over a specified time period. Also, bundles make available a financial incentive to manage proficiently a patient’s treatment during the entire episode of care across multiple providers, giving providers flexibility in the resources they use all through the episode (Mulestein,
Medicare is a federally funded program that provides health insurance to Americans with end-stage renal disease, those at age 65, and younger people who qualify for Social Security disability benefits. It was initially passed as Part A (hospital care) and Part B (outpatient care) until the Balanced Budget Act of 1997 was created. Under this act, Part C (aka Medicare+Choice, now Medicare Advantage) combined A and B into a voluntary managed care program. Later, voluntary Part D was created, offering outpatient prescription coverage. Medicare expenditures increased from $4.2 billion in 1967 to $205 billion per year by 2000, $554.3 billion in 2011, and it’s expected to surpass $1 trillion by 2022. Medicaid provides free or low-cost healthcare
Although the concept of managed care has been in existence for several decades, Nickitas, Middaugh, and Aries (2016) remarked that its application in the nation’s healthcare system did not begin until the mid-1990s. Sekhri (2000) defined managed care as the variety of arrangements that incorporates the funding and delivery of care. Designed primarily to reduce the healthcare cost and deliver a high quality of care, Sekhri (2000) cited that managed care was criticized for its cost savings, provider reimbursement, and quality of care.