Cost Control Methods in Managed Care Choice Restriction - Essay Example

Cost restriction protects the care provider from incurring high bills because of patient decisions. It also makes it imperative for the participating network of physicians to ensure that they have the best cost incentives for the patients under their care. Cost control also makes it possible for the managed care provider to cover more people at more economical rates. The measures providers put in place lead to the provision of health care at the most affordable rates. Managed care providers achieve cost control in several ways.

First, they may choose to use a network of physicians who are willing to offer contractual discounts. This enables the managed care provider to ensure that care costs do not exceed projections. In addition, it assures the physicians of constant clients. Secondly, some managed care providers make it compulsory, or provide incentives for the patients to visit their approved network of providers to enjoy these cost benefits. If a patient does not go to an approved physician, then they pay a portion of the cost of service.

Thirdly, some managed care providers provide incentive to the participating health centers by paying a fixed sum to the centers to care for a given number of patients. This makes it the responsibility of the center to ensure they do not exceed the stated limit in order to turn a profit. Most of the managed care providers use a mixture of cost restriction methods. Article Review One of the key components of managed care is the provision of drugs. This is why it is interesting to consider some of the options managed care providers use as presented in the paper, “Cost Containment Strategies for Prescription Drugs: Assessing the Evidence in the Literature”.

The paper presents three categories of cost containment approaches. The first category of cost restriction approaches is utilization strategies (Hoadley, 2005). These strategies relate to the use of prescription medicine. Under this approach, specific strategies include direct limits, which includes measures like excluding specific drugs or certain classes of drugs from coverage, dispensing limits, and overall quantity limits (Hoadley, 2005). It also has other strategies such as the management of utilization, sharing of drug costs, and disease management.

The second category of cost restriction approaches are pricing strategies (Hoadley, 2005). This includes measures geared towards making the purchase of prescription drugs as financially efficient as possible. The specific measures employed include use of discount cards, use of designated pharmacy networks, and offering rebates (Hoadley, 2005). They also include measures geared towards lower transaction costs. The third class of strategies is the regulatory measures available only to government (Hoadley, 2005).

The specific measure may include direct price control, and availing of a wider range of cost-effective generic drugs based on changes in patent laws. It may also include the regulation of drug imports from other countries. This article demonstrated that cost restriction is a very central aspect of managed care and that it is not limited to physician fees (Niles, 2010). In fact, drugs are a major part of managed care. Cost containment measures targeting managed care invariable targets the cost of drugs.

Case Study Surgery Center is a Medicare-certified institution that handles about 350 cases every month (RCS, 2011).