Wait a second!
More handpicked essays just for you.
More handpicked essays just for you.
The big problems with hmo
Don’t take our word for it - see why 10 million students trust us with their essay needs.
Recommended: The big problems with hmo
An HMO is an organized health care delivery system, which provides health care to its members through networks of doctors and hospitals. Rather than traditional health plans, HMO’s cost less. Two ways HMO’s control costs are: controlling hospital admission and length of stay, and by providing incentives to physicians. These two cost control methods are further examined by an article published by The National Bureau of Economic Research (2002). The article examines the incentives to physician strategy for reducing utilization cost. The Physician Guide to Managed Care (1994) describes HMOs the case management procedures used to control cost through hospital length of stay and admissions.
Much of the focus regarding HMO controlling cost is based around physician incentives. According to The National Bureau of Economic Research (2002), physicians in a HMO network would receive a sizable bonus in exchange for keeping patient cost below target levels. Physicians would achieve lowering utilization cost by: teaching patients to better manage their chronic diseases to avoid hospital visits, by not encouraging unnecessary testing or specialty referrals, and by offering extended office hours and answering services to reduce emergency room visits. HMO’s have provisions when it comes to physician incentives. They limit the effect of its cost control bonus by providing placing a “stop-loss” provision for seriously ill patients. If a very sick patient acquired more than 100,000 worth of expenses in a year, this amount would be included in for a maximum of the 15,000 of a physical annual utilization cost.
Physician incentives are also link to quality of care. According to a report by the Natural Health Purchasing Institute (2002), Providers a...
... middle of paper ...
... 96-104.
Tracy Certo. (2002 February). Incentive Effects of HMO Contracts. Retrieved from The Natural
Bureau of Economic Research website: http://www.nber.org/digest/feb02/w8522.html
National Health Purchasing Institute: Provider Incentive Models for Improving Quality of Care
An Initiative of The Robert Wood Johnson Foundation. Bailit Health Purchasing, LLC .
March 2002.
National Research Council. Crossing the Quality Chasm: A New Health System for the 21st
Century. Washington, DC: The National Academies Press, 2001.
S D Pearson, T H Lee, E Lindsey, T Hawkins, E F Cook, and L Goldman. (1994). The impact of membership in a health maintenance organization on hospital admission rates for acute chest pain. Journal of Health Service Research, 29, 59-74
Nash, D. B. (1994). The Physician's guide to managed care. Gaithersburg, Md.: Aspen
Publishers.
Each model presents different types of earning incentives for physicians to provide cost effective care which improves clinical outcome.
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).
This group is more focused on satisfaction, access and quality of care. Providers, or practitioners, are also key stakeholders within an organization. The term provider can encompasses not only physicians and surgeons, but also nurses, physical and occupational therapists, technicians, and other members of a clinical staff. Providers fall into two categories, primary, which includes hospitals and health departments and secondary, which includes educational institutions and pharmaceutical companies. Providers are focused on the best treatments for patients and are involved in delivering health services and products. The final element of the MCQ model is the employer who by far is the largest paying and purchasing stakeholder of an organization. The employers focus is primarily on their return on investment within an organization. Cost and quality is a focus for employers when choosing health benefits but are mindful that access is just as important. Within the Patient Healthcare model, MCQ explains the interactions between the four elements of employer, patient, provider and payer while the Iron Triangle focuses on the factors of cost, quality, and access. The Patient Healthcare model charges healthcare leaders with the task of balancing satisfaction with the stakeholder (employer, patient, provider, and payer) in relation to cost, quality and access. This may be very difficult since stakeholders may have competing priorities. Changes and variations made in how healthcare organizations operate may have profound effects on how stakeholders perceive the quality, access and cost. For instance, a patient may consider cost to be a top priority when seeking healthcare and at the same time the healthcare organization may consider raising costs and therefore devaluing access and quality. Patients who begin to incur high out-of-pocket costs may begin to perceive a financial
In Medicare's traditional fee-for-service payment system, doctors and hospitals generally are paid for each test and procedure. This drives up costs by rewarding providers for doing more, even when it’s not needed. ACOs continue to utilize fee for service by creating incentives to be more efficient by offering bonuses when providers keep ...
Pay-for-performance (P4P) is the compensation representation that compensates healthcare contributors for accomplishing pre-authorized objectives for the delivery of quality health care assistance by economic incentives. P4P is increasingly put into practice in the healthcare structure to support quality enhancements in healthcare systems. Thus, pay-for-performance can be seen as a means of attaching financial incentives to the main objectives of clinical care. However, reimbursement is a managed care payment by a third party to a beneficiary, hospital or other health care providers for services rendered to an insured or beneficiary. This paper discusses how reimbursement can be affected by the pay-for-performance approach and how system cost reductions impact the quality and efficiency of healthcare. In addition, it also addresses how pay-for-performance affects different healthcare providers and their customers. Finally, there will also be a discussion on the effects pay-for-performance will have on the future of healthcare.
Miller, H. D. (2009). From volume to value: better ways to pay for health care. Health Affairs
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.
In order to fully understand the uninsured and underinsured problem that hospital administrators face the cause must be examined. The health outcomes of uninsured individuals are generally worse than those who are insured. Uninsured persons are more likely to experience avoidable hospitalizations, diagnosed at later stages of disease, hospitalized on an emergency or urgent basis, and more seriously ill upon hospitalization (Simpson, 2002) Because the uninsured often lack an ongoing relationship with a health-care provider, they are less likely to receive preventive care and diagnostic tests (Kemper, 2002). Many corporations balance their budget through cost cuts and other moves, but have been slammed with an increasing load of uninsured patients, coupled with reduced payments from government and private insurance programs. In 2000, 564,476 uninsured patients came through Health and Hospitals Corporations health care centers, a 30 percent increase from 1996. In the same period, Congress reduced Medicare reimbursements to hospitals, while Medicaid reimbursements to primary care clinics remained basicall...
The current health care reimbursement system in the United State is not cost effective, and politicians, along with insurance companies, are searching for a new reimbursement model. A new health care arrangement, value based health care, seems to be gaining momentum with help from the biggest piece of health care legislation within the last decade; the Affordable Care Act is pushing the health care system to adopt this arrangement. However, the community of health care providers is attempting to slow the momentum of the value based health care, because they wish to maintain their autonomy under the current fee-for-service reimbursement system (FFS).
My homework is entirely my own work and I did not copy from anyone else.
6. The special characteristics of the U.S. health care market are Ethical and equity considerations, asymmetric information, spillover benefits, and third-party payments: insurance. Each one of these characteristics affects health care in some way. For example, ethical and equity considerations affect health care in the way that society does not consider unjust for people to be denied to health care access. Society believes that it is the same thing as not owning a car or a computer. Asymmetric information also gives health care a boost in prices. People who buy health care have no information on what procedures and diagnostics are involved, but on the other hand sellers do. This creates an unusual situation in which the doctor (seller) tells the patient(buyer) what services he or she should consume. It seems like the patient has to buy what the doctor tells him. The topic of spillover benefits also cause a rise in prices. This meaning that immunizations for diseases benefit not only the person who buys it but the whole community as well. It reduces the risk of the whole population getting infected. And the last characteristic is third-party insurance. Which involves all the insurance money people have to pay. This causes a distortion which results in excess consumption of health care services.
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.
Managed care is simply a system that delivers health care to a specific population purchased through health insurance plans. Practitioners and providers manage the use of health care services and cost by providing effective diagnosis and treatment, appropriate use of inpatient and outpatients facilities, population-based planning, health promotion and education, and disease prevention. Managed care uses a “gatekeeper” system, where patients or beneficiaries are assigned a Primary Care Physician (PCP), who they see initially for all medical care. The PCP acts as a gatekeeper by initiating referrals to specialists when required and approving inpatient admissions. Managed care was seen across communities in America as early as the 19th century and by 1938, Henry Kaiser had adopted a pre-paid medical plan for his employees. During World War II Kaiser used pre-paid medical programs for his workers and after the war he opened these plans to the public, which became the Kaiser Permanente we know today. Pre-paid healthcare and Health Maintenance Organizations (HMOs) came into full use in the 1970’s when the federal government established grants and loans as part of a health care strategy to provide care for uninsured Americans by increasing the number of HMO, increasing enrollment, and containing the cost of healthcare. Since the 70’s employers have used managed care as a form of high quality low cost insurance for their employees and the federal government has turned to managed care for both Medicare and Medicaid programs.
In 2015, the Centers for Medicaid and Medicare Services (CMS) released the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) which implements the final rule which offers financial incentives for Medicare clinicians to deliver high-quality patient centered care.5 Essentially, taking the time to learn the patient’s goals and treatment preferences allows for the patient to walk away from the medical treatment or service feeling understood and cared for by the provider.4 Thus, resulting in a better, more comprehensive plan of care. Policy makers are hopeful that the new incentive-based payment system will accelerate improvement efforts.