Managed Care vs Fee-for-Service Organization Needs - Essay Example

Topic: How can Managed Care Organization improve the quality of care provided by their networks? Sub topic: Quality of service at managed care organizations versus traditional fee-for-service. Managed care known by different acronyms like HMO, PPO, and POS, is the replacement of traditional fee-for-service health insurance plan. The big question that arises is regarding the quality of service at managed care organizations. Is it being compromised? To know the answer, a comparison between the two – managed care and fee-for-service needs to be made. Actually, managed care is very different from the traditional fee-for-service, as it changes the financial reward of both doctors and hospitals (Inlander, 1997). Whether the quality of managed care organizations is secondary to traditional fee-for-service or not, can be substantiated only after a comparison of the benefits and harms of both types of medical care and particularly the analysis of the pros and cons of managed care. Managed care is being provided through networks to manage the rush of patients, as according to Kerfoot and Helsinger (1994), “The pressure to treat patients in the least invasive, most appropriate environments has resulted in excess capacity in hospitals and has led to the consolidation of patient care units and even the merging of hospitals into integrated health care networks” (Corder et.Al., 1996). The quality of care provided by managed care organizations’ networks is the most crucial issue that depends on selecting a right health care plan. You need to feel the impact of their managed care right down when you get admitted, as quality can not be measured. But we can make comparisons between the HMOs and the traditional fee-for-service plans. According to the study conducted by the researchers at New England Medical Center in Boston as reported in the October 2, 1996 Journal of the American Medical Association (JAMA) publication, patients with chronicle illness of age 65 and older treated in HMO had more chances of prolonged illness than those of the same age treated through fee-for-service plans. In the 4 years of study, the researchers also found that 54 percent Medicare managed care patients’ health deteriorated to only 28 percent Medicare fee-for-service patients in the same time period. Another finding revealed that low income HMO member patients’ health deteriorated further (Peoples Medical Society Newsletter, 1997). In another study conducted by JAMA as reported in the July 9, 1997 issue of the newsletter, it was found that more of HMO patients suffering strokes were given permission to be admitted in nursing homes than to be shifted to rehabilitative facilities after the attack in comparison to fee-for-service patients. But it didn’t imply that they were more prone to die than their fee-for-service patients. In its 3rd study published on June 11, 1997, JAMA noticed the frequency of cataract operations done under fee-for-service and managed care plans. It showed that the practice was less random at HMO than it was at traditional Medicare plans (Peoples Medical Society Newsletter, 1997). The Pros and Cons of Managed Care A cursory comparison of both the Medicare systems indicates that fee-for-service medical care is ahead of managed care but a more individualized analysis of managed care and fee-for-service system of medical care provides a cloudy view of the picture that emerges. To know the reason behind, it is relevant to know how the idea of managed care came into practice. It was developed as a cost cutting strategy so that HMO members could easily avail preventive care to remain healthy and the organization could gain long term profit. Managed care organizations follow a practice in which they pay to the plan doctors a regular monthly fee on the basis of number of patients registered with them for treatment. How many of the registered patients are actually treated is a totally irrelevant issue. This definite monthly fee discourages doctors from performing not-necessary procedures to make extra money. As this is not a practice in fee-for-service system, doctors might perform unnecessary procedures there on patients to make more money. But this fixed-fee system adopted by HMO provides an opportunity to doctors to avoid treatment to such patients who need it. Theoretically, money saved on patients who don’t require treatment, should be spent on those numbered patients who need treatment. There remains scope of saving money by doctors who get fixed per patient fee, not to treat the patients who need treatment. You can not be sure of whether the practice is being misused by doctors or not. Applying the same logic on fee-for-service system, they can also perform unnecessary services to get more fees in return (Peoples Medical Society Newsletter, 1997). Taking for instance, the cataract operations performed by both systems, the researchers didn’t take into consideration the reasons of operating the cataract by doctors in both the systems; only numbers of operations were counted. One cannot derive a conclusion on fee-for-service doctors performing unnecessary surgeries or managed care surgeons ignoring surgeries on needy patients to save money. Otherwise also, it depends on the expert opinion of doctors; opinion may vary (Peoples Medical Society Newsletter, 1997). Similar can be he conclusion from the stroke research. Generally, rehabilitative care is understood superior to nursing home care after a stroke. One cannot reach a conclusion as mortality rate in both the systems – managed care and fee-for-service – were same of patients irrespective of the reason where they recuperated. Data on quality of living was lacking to confirm how well they lived to how long they lived. Researchers suggested finding out a system parameter to check quality so that a comparison be made between managed care and fee-for-service (Peoples Medical Society Newsletter, 1997). The research done by the New England Medical Center points out that the poor and the elderly felt the fee-for-service to be a better option that managed care. It is taken as one of the more concluding studies on the topic. Again, only individualized analysis of the data of both the types of services could bring to notice the differences in the care of poor and elderly (Peoples Medical Society Newsletter, 1997). Although one cannot reach a conclusion on the basis of research done so far to speak in favor or against a system, the significance of the quality issue can not be underestimated. Law makers are taking notice of the doubtful conclusions. As a result, the National Committee for Quality Assurance, an industry trade group, has taken the initiative to use the research methods as a template for benchmarking quality standards for seniors’ health under managed care. Another federal body, the Health Care Financing Administration that runs the Medicare and Medicaid programs, has announced that all federal government health plans are bound to use the same parameters to monitor a patient’s health (Peoples Medical Society Newsletter, 1997). Public opinion in corporate sector is strongly in favor of managed care. They deem the backlash on managed care just a bug that can be hit. Companies like Boeing have plans to enter the managed care networks in a big way. According to corporations like GTE Corp., Levi Strauss, backlash on managed care is not a big issue ( Jan Ziegler, 1996). No evidence, so far, has substantiated the charge on managed care or fee-for-service for providing inferior care but genuine problems of the health care industry need to be addressed by collective efforts of all stakeholders, particularly the frontline health care providers as well as the American people on the evolution of the health care system. To achieve the final aim of healthier citizenry and a healthier system, all players -- consumers, providers of care, employers, insurers, and local, state, and federal governments -- must contribute in the health care reforms so that general public may enjoy the benefits of managed care to the optimum. References Corder, K. et al. (1996, July-August). Managed care: employers influence on the health care system. Nursing Economics. Retrieved Monday, May 4, 2009 from http://findarticles.com/p/articles/mi_m0FSW/is_n4_v14/ai_n18607056/?tag=rbxcra.2.a.55 Inlander, Charles B. (1997, October). Understanding managed care. Peoples Medical Society Newsletter. Retrieved Monday, May 4, 2009 from http://findarticles.com/p/articles/mi_qa3795/is_199710/ai_n8770235/?tag=rbxcra.2.a.11 Managing quality in managed care. Peoples Medical Society Newsletter, (1997, October) Retrieved Monday, May 4, 2009 from http://findarticles.com/p/articles/mi_qa3795/is_199710/ai_n8773161/?tag=rbxcra.2.a.44 Ziegler, Jan. (1996, August). Behind the scenes of the managed care backlash. Business & Health. Retrieved Monday, May 4, 2009 from http://findarticles.com/p/articles/mi_m0903/is_n8_v14/ai_18595573/?tag=rbxcra.2.a.22 Read More