The Basics of Managed Care - Essay Example

? Managed Care Definition of managed care Managed care has been used to define a variety of techniques aimed at reducing the cost of providing health services. In addition to this, the definition also encompasses organizations that utilize these techniques in providing health care. Managed care also refers to financing systems and other systems of delivering health care. Some of the organizations that are engaged in managed care include the Preferred Provider Organizations and Health Maintenance Organizations (Kongstvedt, 2001). Managed care takes an approach that aims at providing quality health care while controlling costs. Managed care is elusive of clear definitions. This can be attributed to the fact that it refers to both programs and care handled by organizations. The programs look into the coordination, rationalization and delivery channels of care. These channels ensure that the programs avoid risks at all costs. Organizations involved in managed care assume responsibility of all financial risks involved. According to ‘‘The Basics of Managed Care’’ managed care system dates back to 1973 when politicians took practical steps towards changing American health care program. The transformation revolutionized health care into a profit making venture for the insurance industry. Health costs soared to the roof. Service providers made large sums of money as consumers shied away from Health costs. Strategies were adopted aimed at modifying both the consumer and the providers’ behavior. Consumer focused strategies took the form of co-insurance levying. Provider based strategies aimed at changing the mode of payment at hospitals. Insurance companies altered the modes of payment. Managed care is different from conventional health insurance in that the managed care organizations can either directly provide services or provide the services through contractual agreements. In conventional health insurance, the insurers are not involved in the delivery system. When one mentions managed care, health maintenance organizations automatically come to mind. After the enactment of the Health Maintenance Organization act of 1973, HMOs grew in large numbers (Patel & Rushefsky, 2006). This is partly because the legislation promised to give financial support to HMOs that met the federal certification criteria and offered good packages. Participants in managed care There are various models of managed care organizations. Staff model HMO was the original managed care model (‘‘The Basics of Managed Care’’). This model included physicians as salaried employees or HMO partners. They were entitled to bonuses, incentive payments and profits. This model employed physicians from common specialties. It was also referred to as closed panel HMO. This was because it was not open to community physicians. These HMOs may own hospitals but most prefer to have contractual agreements with hospitals. The second model is referred to as the group model HMO. This category includes a multi specialty physician group. With such an arrangement, ‘‘The Basics of Managed Care’’ notes that HMO members have access to all physician services. Another variant within the group model involves physician group sponsors. Group model is also known as closed panel HMO. The group model also has the network model variant. In such a model, the HMO enters a contractual agreement with many group practices to provide medical care. On other occasions, they enter contractual agreements with multi-specialty clinics. These HMOs are either open-panel or closed-panel. The network-model HMO; is the third model where HMO contracts has more than one group practice providing physician care to members. At times, HMO contract big specialty clinics while in other times they work with smaller groups of primary care physicians. This model may either be open or closed-panel HMOs based on whether involvement in the group activities is open to physicians meeting the HMO’s and the group criteria (‘‘The Basics of Managed Care’’). (‘‘The Basics of Managed Care’’) explains that in the Independent-Practice Association Model (IPA), HMOs contracts an association of physicians to offer physician care to members. Bohmer (2009) notes that this plan similar to insurance; may have a central company which could sell coverage as an HMO and then contract independent providers to offer the services needed. IPA is an independent legal entity with physicians as its members. However, physicians keep their separate identities and offices therefore they can see non-HMO patients and maintain their personal records and support staff. IPA model is also referred to as open-panel plans since any community physician who satisfies the HMO and the IPA standards can participate. HMOs reimburse their IPAs on a broad physician capitation basis to offer services to it members. Consequently, IPA may compensate the physicians involved in the plan either on a fee-for-service basis or a hybrid of a fee-for-service basis and primary care capitation as explained by Bohmer (2009). According to ‘‘The Basics of Managed Care’’, utilization control in the IPA-model HMOs is difficult since physicians remain autonomous practitioners. The fifth HMOs model is known as the direct-contract-model HMOs. ‘‘The Basics of Managed Care’’ describes that this model is similar to IPA-model HMOs although this HMO contracts directly through individual physicians. The US Healthcare is an example of this model where HMOs strives to enlist a wide range of community physicians; specialists and primary care physicians equally (Bohmer, 2009). This model uses a primary care case management approach to control access to physicians. In this model, medical practitioners are compensated either on a primary care capitation or fee-for service basis. Moreover, financials risks in the model are shouldered by HMOs in contrast to the IPA-model plans where risks are transferred to IPA. ‘‘The Basics of Managed Care’’ explains that customers resisted becoming members of the HMOs in spite of the reduced cost since they did not want to forfeit all coverage for using non-participating providers. Consequently, HMOs formed a Point of Service (POS) HMO. In this arrangement, a patient for an additional premium can choose to either use an authorized HMO provider or else go to outside the plan to a person s/he wants. The other form of managed care is the Preferred Provider Organization (PPOs). These are entities in which employer health benefit plans and health insurance carriers contract to purchase health care to the covered beneficiaries from selected lists of participating providers (Bohmer, 2009). In this scheme, providers make a commitment to follow the laid out utilization procedures of the PPO and accept its compensation structure (Bohmer, 2009). Due to high numbers resulting from being in PPO; hospitals and physicians are reimbursed at discounted rates. Patients receiving care from PPO have an option of using non-PPO providers (Bohmer, 2009) although at higher costs due to the co-insurance and deductibles which apply for care from providers not listed. Exclusive Provider Organization (EPO) is similar to PPO but the beneficiaries of this arrangement are limited on the list of the participating providers. EPO are the other form of managed care and may rely on gatekeeper approach as is done in HMO to authorize specialty services. The last form of managed care is Physician-Hospital Organization (PHOs). In this arrangement resources are brought together to form a wide range of services which can be marketed directly as HMO or packaged to existing HMOs. Impacts of managed care to HSO managers The five participants in the managed care arrangement can significantly alter the role of managers in health service organizations. According to Longest and Darr (2008), health service managers devise new ways of working smarter in the face of emerging new environments and a wide range of external pressure such as managed care givers. Managed care brings new rules and technologies to provide better services to the consumers. HSOs managers must be able to think in terms of experience in care giving rather than on simple incidents. Moreover, managed care calls for HSOs manager to establish information systems that can keep track of the patient over time. This information system can provide information to primary care givers about the patient’s risks. According to Pan African Health Organization (2002), HSOs should adopt a common system, such as common record system to enhance flow of information about the patient. Longest and Darr (2008) observes that managed care can take on an aggressive approach such as monitoring of high risk patients. Therefore managers must be flexible and must develop strategies that will ensure that there are continuous monitoring patients. The concepts in managed can be used to carry out interviews with HSO manager. In the interview, one would assess the effectiveness the managed can in reaching out to patients. The interview with the manager would also evaluate the availability of resources in managed care. In the interview, one would analyze the perception of clients on managed care and the programs initiated by the manager to ensure monitoring of all patients in the arrangement. The interview would also assess the flexibility in the organization. Conclusion In conclusion, managed care implies the techniques employed to reduce the cost of providing health care. There are various participants in managed care including; health maintenance organizations, Point of Service, Preferred Provider Organization and Exclusive Provider Organization. Managed care creates more roles for HSO managers and therefore they must be flexible. References Bohmer, R., (2009). Designing Care: Aligning the Nature and Management of Health Care. Harvard Business Review Press. Patel, K. and Rushefsky, M., (2006). Health care politics and policy in America (3rd ed. ed.). Armonk, N.Y.: M.E. Sharpe. Longest, B. and Darr, K. (2008). Managing Health Services Organizations and Systems, 5th Edition (MHSOS). Health Professions Pr Pan African Health Organization (2002). Primary Health Care in the Americas: Conceptual Framework, Experiences, Challenges and perspectives. Organization and Management of Health Systems and Services. Kongstvedt, (2001). The Managed Health Care Handbook. Fourth Edition, Aspen Publishers, Inc ‘‘The Basics of Managed Care’’ Retrieved 17th February, 2012 from < http://aspe.hhs.gov/Progsys/Forum/basics.htm> Read More