Managed Care and Health Care Organizations - Essay Example

How does managed care affect health care organizations’ relationship with buyers, sellers, their community in general, and the government? Introduction Managed care is a reference to a diverse set of techniques adopted in the healthcare service provision with a view to reducing health costs and maximizing benefits through a systematic improvement in the quality of healthcare services. These managed care techniques are intended to benefit those organizations which might directly utilize them to provide healthcare services to customers or benefit third party organizations which purchase them from first organizations and deliver to their customers. This latter category of organizations is sometimes referred to as managed care organizations. Then there are those managed care delivery systems that finance and deliver healthcare services to those enrolled on managed care services. The relationship between healthcare organizations and other stakeholders such as buyers, sellers, the community at large and the government can be summed as one in which the provision of managed care produces a series of implications for the latter with attendant causes and consequences thereof. Analysis Federal and state governments over the years have been concerned with rising costs of healthcare services against the backdrop of haphazard service provision by a medley of organizations that provide health care benefits to their customers in diverse ways. Managed care techniques are made up of systemic health care provision structures and personnel. The emphasis on the reduction of costs and maximizing benefits is essentially related to the federal government’s concern for the future of healthcare in the USA. Here managed care plays a very significant role by seeking to integrate a disparate system of national health care services into a well-planned program-based system of management. While the organizational and administrative apparatus has been playing a crucial role in determining the patterns of growth of this new phenomenon, there is a paucity of awareness among many beneficiaries as how best to achieve better health care outcomes at the least possible cost. This lack of awareness is directly attributed to the failure of healthcare providers’ inability to build up meaningful and constructive public relations. Yet it’s just taken for granted that healthcare organizations have a continuous and mutually beneficial relationship with those buyers, sellers, the community and the government. The interlinks are manifest in the structural relationships among a spectrum of healthcare professionals, government and private organizations, managed care executives, physicians, consultants, pharmacists, developers, vendors, nurses, case managers, quality professionals, medical directors, hospitals, medical labs, research institutions, federal and state government institutions and so on. In this complex set up the Department of Managed Health Care (DMHC) occupies the center stage with all powers of regulation concentrated in it. This list of concerned people does not end here. In fact there are also health care advocacy groups which intervene between consumers’ rights and health care providers’ obligations. Buyers are the customers of health care services under the managed care system. Health care organizations are the sellers of the service. Yet this categorization does not help much because there are those organizations which do not sell directly to the final buyer such as equipment and medicine suppliers to hospitals. These vendors are placed in between the final buyers and service providing organizations. Such intermediaries are, in turn, subject to regulatory mechanisms imposed by federal and state authorities (Mick and Wyttenbach, Editors, 2003, p.6). According to recent news reports managed care organizations (or health insurance companies) have a tendency to ask their service providers such as physicians, consultants and health care institutions to charge as lower a fee as possible from those referred patients to them so that they would get more referrals from managed care organizations. While this relationship between individual health care service providers and managed care organizations is well understood, there is something much more complex and influential here. The seller of the service is tied up to a systematic plan of “referral flows” depending on his willingness to quote a lower fee to the buyer, i.e. the patient. Government intervention by way of regulations and standards has had little success if any during the past few years. DMHC for instance has sought to tighten rules on timely intervention by making emergency consultation a prerequisite for all physicians enrolled in Medicare. While the enrollee is subject to some rigorous supervision there is very little by way of compulsion to get the doctor to see the patient depending on the degree of urgency. Managed care organizations have still less authority in these matters because there is no regulation to compel a physician to see the patient within a certain time limit. However, DMHC has come out with its own regulations to impose compliance on errant physicians. However it’s the number of referrals that a particular doctor gets from a managed care company that plays a pivotal role here. Physicians scramble to be on as many panels as possible because they might get many referrals. But nevertheless managed care organizations have no rules and regulations as to which physician they should send a referral and at what regular interval and so on. As a result the relationship between the health care professional, the managed care organization and the consumer (the patient) is determined much by the government’s own ability or inability to impose regulations and prevent the most undesirable effect of cumulative information asymmetries in health care industry as a whole. In other words there is an irreparable loss caused to the community at large by not informing them about their health rights and privileges. Legislative enactments that some states have brought about, as in California, have partially set aright this anomalous situation though still there is wider gap between the patient and the physician. Health Maintenance Organization (HMO) is another form of managed care organization (MCO) but they operate on the principle of regulated service provision. They are appointed by the government to complement the insurance-based service and therefore they function more like auxiliaries. Unlike insurance companies HMOs provide services to the community through their contracted staff who are signed on to provide the service on the understanding that they would get a steady flow of referrals. In fact most of these physicians are primary care physicians (PCPs) who are basically pediatricians, family doctors and internists. As for the consumers and patients there is less trouble and formality involved in this process. But nevertheless the relationship between the HMO and the PCP is characterized by a strict code of ethics because the latter cannot deviate from the company rules. On other hand between the HMO and the patient, the relationship is rather informal. Prior appointments are not necessary. Next health advocacy groups, i.e. groups of concerned citizens, play a pivotal role by advocating not only the least costly health care but also timely access to it. Such groups of people come in between the physician and the patient on one hand and between the government organizations and the MHO on the other. Since they are voluntary organizations they are liberally disposed and structured to deal with any contingency situation. While MHOs have an uneasy relationship with them due to the fact that they often advocate stricter measures against recalcitrant physicians and MHOs, their vocal support for patients’ rights has gone a long way in some state legislatures like California where regulations to require timely consultation by the physician have been passed. Though their relationship with MHOs is characterized by the same degree of divergence, there is a common understanding between the two that physicians in general have a tendency to accept higher fees thus disregarding both the patient’s ability to pay and the insurance company’s status under the Medicare system. In fact some small insurance companies or MHOs are seemingly unable to maintain their administrative staff while big companies establish links across states to grow up as giants. Conclusion Managed care plans are government provided health plans based on insurance. They engage in contracts with health care providers or professionals and medical institutions to provide a contracted service to the community. They are the main elements in the network of health care service provision under the federal and state governments system. The managed care plan has a system of rules to determine the amount of insurance money that each enrollee in the plan is entitled. When the service has been rendered by the physician as per agreement, he sends the bill to the insurance company which in turn has the right either to accept it on its face value or to ask for a revised bill. This is where the medical billing and coding companies come to play a role. The government’s involvement is seen in the connection between the acceptance and appointment of these insurance companies into the national health care plan, Medicare and Medicaid. While these links are obviously clearer, the relationship between the MHO and the patient is determined by the rules of the insurance plan. The former pays what the latter is entitled to under the plan, though there is no hard and fast rule to prevent a patient from seeking more expensive care outside the plan. REFERENCES 1. Mick, S.S., and Wyttenbach, M.E. (Eds.). (2003). Advances in Health Care Organization Theory. California: Jossey-Bass. Read More