Managed health care future for the disabled and poor - Essay Example

?Managed Health Care Future for the Disabled and Poor In the past several decades, the federal government has attempted to offer quality health care services to its citizens through health care programs. However, these programs have not been successful, as they had anticipated. This is attributed to the rising costs and poor health services brought by the programs. Its attempts to contain the rising costs have not been fruitful; instead, they have led to poor and quicker health services that do not account for what the enrollee of the services has paid. Provider contracting has brought cheaper health care services but they have had their own drawbacks. The future role of the government lies on the mechanisms it will develop to provide efficient and cost-effective health care services. Managed Health Care Quality Managed health care is defined as delivering health care in an integrated system and in an organized manner. The main goals of managed health care are to enhance the clinical quality of the medical services, to enhance the client and social service element of health care, and to minimize the costs of distributing quality health care. Managed care is a structured approach to purchasing and getting the right service for a particular health need. Health maintenance organizations (HMOs), preferred provider organizations (PPOs), and physician hospital organizations (PHOs) are forms of managed care (Frank and Frank-Spohrer, 1996). Managed care and in particular, the health maintenance organizations became popular as a way of enhancing care and minimizing unnecessary services (Earp, French, and Gilkey, 2008). However, towards the end of 1990s, the consumer backlash resulted in the abandonment of the firmly controlled care management systems. Quality is “now the watchword for 21st century healthcare as the institutions and individuals who pay for services begin to focus on what they are getting for their money” (Earp, French, and Gilkey, 2008, p33). In other words, individuals demand for quality health care because they are paying for it. There is still no consensus as to who should be accountable for the provision and financing of the health care services in the United States. This has resulted in a patchwork system in which the individuals, employers, and the government all assist in covering up the expenses. For a while, the government has assumed the mandate of providing health insurance to particular deserving populations (such as some poor people, children, disabled, and other older persons) but it has generally shunned financing care for the working adults (Earp, French, and Gilkey, 2008). Instead, majority of the working adults get insurance either through buying coverage on their own or through their employers, or they go without the cover. It is important to note that there is no single unifying system offering the systems. The health services are offered directly by private providers, organizations supported by state or federal funding, and governmental organizations (like the public health). Health care services are provided by both not-for-profit and for-profit organizations (Earp, French, and Gilkey, 2008). Managed care imposes quality measurement, accountability, controls, and organization in the delivery of health care to attain the buyer’s aims for access to cost of care, effectiveness of care, care, and quality of care. The introduction and growth of managed care strategies have influenced the general health care organization. They have begun to alter the delivery of publicly and privately health care (National Research Council, 1997). Provider Contracting The aim of a managed care organization is to offer or organize for the health care services provision. Majority of the managed care organizations like the preferred provider organizations (PPOs) and the health maintenance organizations (HMOs) offer their services through agreements with medical groups, individual physicians, hospitals, individual practice associations (IPAs) and other kinds of health care facilities and professionals. The provider contract makes the relationship between the managed care organization and the provider formal. The cautiously drafted contract attains more than just observation of the agreement between the parties. A well-written contract is capable of fostering a positive relationship between the managed care organization and the provider. Additionally, a good contract can offer significant and required protections to each party if the relationship fails (Kongstvedt, 2007). The contracts are not supposed to be lengthy or complex for them to be enforceable and legally binding. For instance, a single-sentence “letter agreement between a hospital and a managed care organization that says that the hospital agrees to provide access to its facility to enrollees of the managed care organization in exchange for payment of billed charges is a valid contract” (Kongstvedt, 2007, p678). There are two reasons why at times the contracts between the provider and the managed care organizations are lengthy. First, most of the contracts, although not necessary, conduct useful functions by indicating the responsibilities and the rights of the agreeing parties. Managed care is a significant revenue source to majority of the providers and a clear understanding of the rights and responsibilities is very crucial. Second, state legislature regulations require several contractual provisions, for instance, these provisions should contain harmless clauses. Government payer programs such as Medicaid and Medicare also require several contractual provisions (Kongstvedt, 2007). It is important to note that there is no existence of contract form or an ideal contract. Proper contract terms differ and this is dependent on the objectives of the parties and issues of concern, the desired level of formality, and each party’s relative negotiating ability. A contract that is poorly written confuses and deceives the parties. The lack of clarity significantly increases the probability of disagreement between the parties in matters such as the meaning of the contract language. The contract is supposed to be written in a language that is simple and easy to understand. However, the contract should be well organized so that the concerned parties are able to locate and review the provisions immediately and in an easy way. It is important to note that clarity has gained significant interest in these contracts because of the fact that they have become more complex. Most of the managed care organizations can act as third-party administrators, PPOs and HMOs. The health care plans usually enter into a distinct contract with the provider to offer services in all the three mentioned capacities. Furthermore, the single contract may require the provider to offer services to both the managed care organizations and the enrollees of several nonaffiliates and affiliates of the managed care organizations (Kongstvedt, 2007). Affects On the Public, Physicians, and Hospitals Physicians and other health care providers agree to offer particular services for a specific cost often with a check on the procedures during a benefit period or total patient visits. HMOs are the common types of complementary health insurance for individuals on Medicare and those on Medicaid. The HMO offers supplemental and basic health treatment and maintenance services to the enrollees who have paid a fixed fee. The scope of health services provided relies on the contractual agreement between the plan and the enrollee; the contractual agreement is usually made voluntary. The focus of the HMOs is mainly health maintenance. These agencies usually use several health care professionals. Individuals belonging to the HMO are supposed to use the designated facilities instead of selecting their own facilities. However, all the services rendered are prepaid. Thus, the cost incurred by the consumer in the health care services in the designated facilities is generally less compared to the cost in other facilities (Cross, Hui, and Stanfield, 2011). The main feature of the HMO is that it merges the insurance with a variety of health services. The provider (HMO) is faced with stiff competition from commercial insurers such as Blue Shield or Blue Cross. Therefore, it has a strong motivation to function in a cost-effective and in an efficient manner. The HMO is viewed as the model for motivating the regulation of costs in health care through competition. The prepaid group practice is not expensive for similar benefit package than the traditional underwriting. The HMO has a disadvantage in that the enrollee has to look for a physician for services within the HMO group. This is attributed to geographic issues because physicians in the HMO group tend to practice in the large metropolitan medical centers. When the enrollees look for health care services outside HMO, they do not get any benefits (Cross, Hui, and Stanfield, 2011). PPO is another alternative open for the delivery of health care to the consumer. PPOs entail a hospital or a group of physicians that offers companies with complete health services at a discount. Most of the Americans (approximately 69 percent) enrolled for private health insurance get their care via a PPO. PPO has benefits such as the choice of a hospital and provider, and cost control. PPOs are a group “of providers who have voluntarily joined together to render health care on a contractual basis, or a group of providers who have been organized by a payer through contractual arrangement for a particular delivery system” (Cross, Hui, and Stanfield, 2011, p34). PPO contract providers are usually less expensive because they use fee-for-service systems. Patients who have subscribed for services offered by PPO can go any facility even those outside the PPO system. The important elements of the PPO systems include contractual arrangements, discounts, economic incentives, free choice, organization of providers, and fee-for-service. These elements make the health care services cheaper and easily accessible from any health care facility (Cross, Hui, and Stanfield, 2011). Cost Containment Many attempts have been undertaken to control health care expenditure in the United States. However, majority of these attempts have been met with limited success because the United States has not being able to implement a system wide cost control scheme. Cost containment measures have only affected a few of the targeted sectors within the health care delivery system. For example, where the prices have been controlled, usage has not been touched (Shi and Singh, 2011). During the 1970s to the 1980s, efforts by the government to contain the cost of health care did not turn out as expected. Medicaid and Medicare increased the financial access to the needy and the elderly and the increase in access to the services resulted in the increase in the healthcare costs (Patel and Rushefsky, 2006). The initial plans for Medicaid and Medicare had greatly surpassed the initial projections and thus the inability to contain the cost of health care services. During the establishment of Medicare, the federal government deliberately chose to compensate the physicians in a generous way in order to get political support. In the past years, there have been concerns over the increasing health care costs. Efforts at cost containment have resulted in tradeoffs between access to health care and cost containment. This has resulted into new gaps and problems in the access to health care (Patel and Rushefsky, 2006). Individuals who favor a certain approach to covering those not insured tend to prefer particular cost containment approaches. Some individuals assert that cost containment cannot be achieved without universal coverage because of two reasons (it is important to note that cost containment cannot be achieved even for those who have been insured). Firstly, particular approaches that the observers think can create savings such as disease prevention and health promotion may not work if individuals constantly move in and out of the health coverage. Second, incentives to minimize excess expenditure by the insured affect the system that is presently financing the essential services for those not insured. This also indicates that the access issues for the uninsured can become too much for the society to ignore (Merlis, 2009). Affects On Medicare and Medicaid The growth of the present health care programs was as a result of the authorization by the federal government in the 1960s to increase access to health care by the citizens. These programs include Medicaid and Medicare and they were authorized in 1965. Medicare is a program that assists individuals who are 65 years and above and those who have been getting Social Security disability benefits for over 2 years to pay for their health services. Medicaid is also a program that “authorizes federal matching funds to assist the states in providing health care for certain income groups at or near the federal poverty line” (Clark, Kenneth, and Mathews, 2001, p14). The Health Care Finance Administration (HCFA) provides both programs. HCFA belongs to the U.S. Department of Health and Human Services (Clark, Kenneth, and Mathews, 2001). Initially, both Medicare and Medicaid were stringent fee-for-service systems. Physicians and hospitals were compensated for the money they used on the qualified patients. In this system of health care, the sellers but not the consumers made the buying decisions. Thus, there was need to offer more and more services to the consumers. This led to the exploitation of the new programs by the hospitals and physicians. However, the hospitals and physicians combination need to offer services and the desire for the consumer to get services resulted in the explosion in the health care costs. The federal government in the 1980s made significant changes in the way in which they offered health care services to the elderly and the poor. Medicare and Medicaid programs were under the threat of collapse due to the rising costs. Early efforts (in the early 1970s) at cost containment (price and wage controls) had proved ineffective and disruptive (Clark, Kenneth, and Mathews, 2001). The Medicare prospective payment system is based on the diagnosis-related group (DRG). Each institution or facility is given a set amount for a particular diagnosis; the system is not based directly on amount the patient has spent. The system permitted the payment rates to be established in advance for every medical diagnosis. The health care facilities had a strong motivation to contain the costs and control the amount of therapy offered because the payments for a particular disease were predetermined and fixed. This was done regardless of the quantity of services or care actually provided. The most common types of containment attempts focused on decreasing staff, restricting the time of patient stay, and reducing services. The resultant effect was that the patients being sent home quicker and sicker. The prospective payment system initially focused on the hospital costs and this had the impact of causing a change of services “from the hospital to the physician’s office, to external clinics, and to homes” (Clark, Kenneth, and Mathews, 2001, p14). The Future Role of Government Regulations, ERISA, and HIPAA Several Health Care Community Discussion participants believe that the state government should play a significant role in the future health care system through supplementation or entire replacement of the federal system. This is attributed to the fact that most of the people do not trust the success of the Children’s Health Insurance Program (CHIP), other state programs and the national solutions. For instance, individuals believe that health care can be addressed effectively at the local or the state level rather than at the national level. This is because the federal government may fail to handle it in an efficient and cost effective manner. This can be linked by the failures of the federal government in the past in regard to the provision of health care services; the government programs such as Medicaid and Medicare led to the increase in health care costs (U.S. Department of Health & Human Services, 2008). Various upcoming proposals in health care will be influenced by HIPAA (Health Insurance Portability and Accountability). Examples of these proposals include patient safety strategies, personal health record technologies, unique patient identifiers, consumer driven health plans, and the Health Alert Network (Dodier and Flores, 2005). The ERISA system gives insurers and employers the capability to save their money by offering “inadequate health care to employees, thereby creating incentives for these agents to act contrary to the interest of their principals” (Bronsteen, Maher, and Stris, 2008, p2297). These agency costs play an important role in the present health care crisis and need considerable attention when considering reform. Thus, there are only two means to deal with the issue of EACPs (ERISA agency cost problems): to impose safeguards that will protect the employees against biased conduct. Another way is to create an impartial trustee (Bronsteen, Maher, and Stris, 2008). Conclusion Managed health care future for the disabled and poor requires considerable attention from the federal government and health care providers. There is still no consensus as to who should be accountable for the provision and financing of the health care services in the United States. Managed health care is left to be taken care of by all stakeholders in the health care system. Thus, putting a lot of pressure for those (the poor, disabled and the elderly) who cannot afford health care services. Cost containment came as a result of the rising costs of health care offered by Medicaid and Medicare. Cost containment has led to provision of poor health services to enrollees of the health care services. One of its measures to contain cost included shortening the length of stay for the patient. The role of the government in the future should be to decentralize the provision of health care services to the local level in order to increase its effectiveness and reduce costs. Various proposals regarding health care should be amended so that they do not affect HIPAA. One of the measures that should be taken for employees under ERISA is to impose safeguards that will protect them from biased conduct. Recommendations The government should look into ways that will enable it to offer equitable and quality health care services. The elderly, disabled and the poor are not well covered by the health care system. It is imperative for the government to devise ways through which it will make the health care programs efficient and cost effective. One of the ways include delivering care at the local level rather than at the national level. The cost containment measures should be revised so that they do not end giving the enrollees poor and quicker services, which do not add up to what they have paid for the services. References Bronsteen, J., Maher, B. S., & Stris, P. K. (2008). ERISA, agency costs, and the future of health care in the United States. Bronsteen after BP, 76, 2297- 2332. Clark, W. F., Mathews, P. J., & Wyka, K. A. (2001). Foundations of respiratory care. Mason, OH: Cengage Learning. Cross, N., Hui, H. & Stanfield, P. (2011). Introduction to the health professions. Sudbury, MA: Jones & Bartlett. Dodier, A. & Flores, J. A. (2005). HIPAA: Past, present and future implications for nurses. The Online Journal of Issues in Nursing, 10(2). Retrieved from http://nursingworld.org/MainMenuCategories/ANAMarketplace/ANAPeriodicals/OJIN/TableofContents/Volume102005/No2May05/tpc27_416020.html Earp, J. A. L., French, E. A., & Gilkey, M. B. (2008). Patient advocacy for health care quality: Strategies for achieving patient-centered care. Sudbury, MA: Jones & Bartlett Learning. Frank, G. C. & Frank-Spohrer, G. C. (1996). Community nutrition: Applying epidemiology to contemporary practice. Sudbury, MA: Jones & Bartlett Learning. Kongstvedt, P. R. (2007). Essentials of managed health care. Sudbury, MA: Jones & Bartlett Learning. Merlis, M. (2009). Health care cost containment and coverage expansion. National Academy of Social Insurance. National Research Council. (1997). Managing managed care: Quality improvement in behavioral health. Washington, DC: The National Academic Press. Patel, K. & Rushefsky, M. E. (2006). Health care politics and policy in America. Armonk, NY: M. E. Sharpe. Shi, L. & Singh, D. A. (2011). Delivering health care in America. Sudbury, MA: Jones & Bartlett Publishers. U.S. Department of Health & Human Services. (2008). American speak on health reform: Report on health care community discussions. Washington, DC: Author. Read More