Types of Managed Care Organizations and Their Comparison - Essay Example

HMO plans to fix the amount to be spent on a particular enrollee’s health care. This boosts the control over cost and both the physicians and the patients opt for ways to make the treatment more economical. That is why HMO plans are cheaper than other plans. However, it is noteworthy that the added control over cost is achieved on the cost of quality of health care.

1. Preferred Provider Organization (PPO):

In this type of managed care organization, physicians offer their services at a cheaper rate. This is a mutually beneficial practice in which physicians earn more because of increased business while the patients get the services at a significantly lower cost.

2. Independent Practice Association (IPA):

As the name implies, physicians work in an independent fashion in this type of managed care organization. They are free to have patients both from HMO and the FFS plans.

3. Fee for Service (FFS):

The FFS plans to provide patients with maximum freedom in terms of choice of physician. Patients can use these plans to select a healthcare professional of their own choice whom they feel satisfied served by. However, the freedom amplifies the cost of the service they are given.

4. Point of Service Plans (POS):

In many ways, POS resembles HMO. Healthcare providers have a capitation arrangement for the people enrolled. However, in this type of managed care organization, there are no specific hospitals for doctors to work in. They have compensated annually for every patient they check.

Techniques used by managed care organizations to contain costs:

Some of the techniques using which, managed care organizations contain costs are:

• Providing patients and physicians with financial incentives to make the treatment cost-effective
• Increasing the cost-sharing with the beneficiary
• Limiting the length of stay of patients
• Making limited contracts with the physicians
• Intensively managing the cases of expensive healthcare
• “Increasing the percentage of the patient population in lower-reimbursed, managed segments… [and] …changing practice patterns across all patient populations, including higher-utilization unmanaged segments” (Majkowski, 1997).

Ways in which physicians are reimbursed for services in managed care organizations:

The ways in which physicians may be reimbursed in managed care organizations are numerous and vary from type to type. For example, in HMOs, physicians receive fixed salaries while in POS, the “network providers are compensated on a capitation basis, however, the enrollees can choose a provider outside the network, who is reimbursed on a fee-for-service basis” (Virk, 2007).