Healtlh Managed Care - Essay Example

Managed Care Managed Care is a system that controls the financing and delivery of health services to their members at subsidized prices through contracts with healthcare providers who together form a “provider network”. There exist several managed care models in US such as Health Maintenance Organization (HMOs) or Preferred Provider Organization (PPOs) because of different combinations and plans between insurers, purchasers and providers. The no. of ways in which healthcare providers are remunerated under a managed care agreement are Fee-for-service, Per-diem, Hospital diagnosis related group payment, Capitation and Monthly salary.

Each payment method has certain risks and issues attached for either the insurer (payer) or healthcare provider that vary based upon the chosen method of remuneration such as Price Risk, Utilization Risk, Market Risk, Enrollment Risk, Partner Risk and Regulatory Risk. The following issues should be kept in mind before signing a managed care plan: Service Obligations: Elaborating clearly the services that must be rendered under the contract, if you can provide all services and issues about out-of-area services.

Exclusivity: Negotiating with payer a min. enrollment of patients if initial population of insured payees is not enough to cover risk or it utilization data is unavailable. Termination: Physician should be aware of the termination of contract clauses. Carve outs: A method developed to mitigate the financial risk associated with capitation for high cost diseases such as cancer or AIDS. Stop Loss Insurance: Special insurance for physicians that protects them from very large financial losses.