1. Introduction
One of the hottest issues nowadays in the United States is the rising continuously rising trend of health care expenditures. There are heavy debates about the role of government and insurance companies and the possible solutions. However, little can be heard about the experiences and outcomes of the previous attempts that aimed to restrict health spending.
However, during the long tradition of rising health care costs there was a temporary break in the 1990’s. The period of this break actually corresponded with the time of ‘managed care revolution’. The time, when special types of health care plans aiming to reduce health care costs (managed care) expanded with huge amount. At the end of the 1990’s almost 90% of the US population took part in some form of managed care.
But the special features of managed care (restricted choice, fixed salaries, and lower prices) were not welcomed by everyone. The public, the media and the politicians turned against managed care and end of the 1990’s was characterized by managed care backlash. Managed care was accused to pay little attention to patients in order to save costs for the institutions.
As a reason, the cost containment activities of such institutions were limited greatly by the states. Although we do not know the exact effect of managed care institutions on health care quality and prices it is not considered as a possible solution for rising health care spending. To fill this gap I collected the most important theoretical and empirical investigations on the impact of managed care.
The structure of my paper is the following. First I identify the trend of heath care costs over time, compared to other countries. Then I present an investigation of possible heath care cost ...
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... health care trend. I found that while former, theoretical analyses do not attributed the cost stagnation to the effect of managed care, newer estimations find strong evidence on price decreasing effect of it. The latest investigations could control for all the special characteristics and systematic differences between the managed care and the traditional insurance companies. For this reason Pinkovsky’s results are the most reliable evidence on the impact of HMOs.
If we accept the price declining effect of managed care, the states should build down the regulations of managed care institutions. However, better information of the population and the health sector actor is crucial to avoid the previous misinterpretations. Moreover, the managed care institutions have to be incentivized to create contracts that are available and acceptable for less healthy people also.
Due to the Patient Protection and Affordable Care Act signed into law on March 23rd, 2010; health care in the US is presently in a state of much needed transition. As of 2008, 46 Million residents (15% of the population) were uninsured and 60% of residents had coverage from private insurers. 55% of those covered by private insurers received it through their employer and 5% paid for it directly. Federal programs covered 24% of Americans; 13% under Medicare and10% under Medicaid. (Squires, 2010)
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,
During the study of various reforms that were proposed and denied, both the GOP and Democrats attempted to find a balance that would guarantee the success of their proposals. Years of research, growing ideologies, political views and disregard for the country's constitution sparked an array of alternatives to solve the country's healthcare spending. The expenditure of US healthcare dollars was mostly due to hospital reimbursements, which constitute to 30% (Longest & Darr, 2008). During the research for alternatives, the gr...
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.
Reese, Philip. Public Agenda Foundation. The Health Care Crisis: Containing Costs, Expanding Coverage. New York: McGraw, 2002.
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...
In conclusion, managed care integrates the functions of financing, insurance, delivery, and payment within an organization. It also exercises formal control over utilization. Managed care is viewed as accepting the lowest competitive bid for services rendered. Today, HMOs and PPOs are the most common and widely used models for managed care. Although managed care is here to stay, it requires revision in some areas. Challenges that are to be faced include double agentry, fidelity, confidentiality, honesty, and vulnerability. With the help and guidance of health information professionals, managed care will continue to escalade and become better for all.
The United States health care system is one of the most expensive systems in the world yet it is known as being unorganized and chaotic in comparison to other countries (Barton, 2010). This factor is attributed to numerous characteristics that define what the U.S. system is comprised of. Two of the major indications are imperfect market conditions and the demand for new technology (Barton, 2010). The health care system has been described as a free market in
In the article titled, "Health: Medicare and the Economy," by: Dean Foust, found in Business Week and published in 2004, it is stated that, cuts in Medicare would be bad for hospitals and other managed-care providers. Although the United States is considered the strongest country in the world, there are numerous political, social, and economic issues that require reform to improve our way of life. Reform is needed for the health care system in order for Americans to live a life that is both safe and prosperous. Health care and prescription drug costs, whose escalating prices have caused many Americans to go without adequate medical care. Health care is one of the most controversial issues in the news right now. The co...
What is managed care? According to the Oxford English Dictionary, managed care is “a system of health care in which patients agree to visit only certain doctors and hospitals, and in which the cost of treatment is monitored by a managing company.” Managed care is a variety of techniques designed to reduce the cost of providing health benefits and advance the quality of care. In the United States alone, there are various managed care programs, that are ranged from more restrictive to less restrictive. As stated in the National Institutes of Health, the future of managed care is uncertain. 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
According to Roy, 2013 the issues of providing the affordable care act will unite both the supporters and offenders of the public policy, but in this current situation where the input costs are rising, it will become impossible for government in managing the public policy related to affordable health care. In order to provide affordable health care, majority of the US government has tried out different policies time to time, but unable to get success in realizing the actual policy goals. By providing the affordable health care to majority of the people who requires more amount as controlling the input cost is not possible (AAMC, 2013). Lack of doctors is one of the primary issue in providing high quality health care to the citizens especially those who are financially poor. The Supreme Court of the country passed an Act related to Health insurance as all should have Health Insurance to all the country people by the year 2014, but the at the same time government is concerned about constitutionality of these act (NYTimes, 2013).
Rising medical costs are a worldwide problem, but nowhere are they higher than in the U.S. Although Americans with good health insurance coverage may get the best medical treatment in the world, the health of the average American, as measured by life expectancy and infant mortality, is below the average of other major industrial countries. Inefficiency, fraud and the expense of malpractice suits are often blamed for high U.S. costs, but the major reason is overinvestment in technology and personnel.
To further understand the US healthcare system and put in context how health coverage is provided to its population it is important to compare the US health system to another country like the Netherlands. In the Netherlands healthcare coverage has been achieved through competitive insurance markets similar to the US and the Dutch government does not control prices, productive capacity or funds but instead only acts as a regulator (Daley & Gubb, 2011). In 2006 the Dutch government held healthcare reforms because the country faced an issue that was very similar to the US, in regards to healthcare coverage inequalities, the population was covered through private and public health insurance, with stable private health insurance for the wealthy and unstable public insurance which lacked patient focus and was inefficient in comparison (Daley & Gubb, 2011). Many factors called for healthcare reformation in the Netherlands like a disarranged structure that ineffectively controlled cream skimming, lack of competitive incentives that for insurance companies resulting in bad performance, and the rising premiums
The cost of US health care has been steadily increasing for many years causing many Americans to face difficult choices between health care and other priorities in their lives. Health economists are bringing to light the tradeoffs which must be considered in every healthcare decision (Getzen, 2013, p. 427). Therefore, efforts must be made to incite change which constrains the cost of health care without creating adverse health consequences. As the medical field becomes more business oriented, there will be more of a shift in focus toward the costs and benefits, which will make medicine more like the rest of the economy (Getzen, 2013, p. 439).