A New Health System for the 21st Century - Essay Example

2. Why did some speak of the death of managed careBoth organizations and individuals in the U.S. managed care system is faced with a challenging situation. First of all, the requirement for high-quality care, doubled by the social responsibility to patients, is counterbalanced by an increasing pressure to lower costs and to remain afloat financially. For this reason, numerous health care providers are doomed to fail from a business perspective, being forced to close. More and more practitioners will perform as part of groups or systems, but the process of integration will not impose itself in the short term.

Based on these considerations, it can be asserted that no standard model will emerge as dominant.The Institute of Medicine released a few years ago a report that red-flagged the poor quality of health care in the US (Institute of Medicine 2001). A number of facts that contributed to this situation were identified, and special emphasis was put on the structure of the present health care payment system. Traditionally, doctors and medical institutions are paid regardless of the quality of the health care they provide, leading to no financial incentives or, in the case of certain clinical situations, even to disincentives for quality.

These findings lead to an increasing demand to link payment to performance. The concept of pay-for-performance in health care is an innovation of the new millennium and it has spread quicker than a virus. The major issue taken into consideration is the previously unexplored potential of the health care payment system to bring change into physician and health care system behavior. Scientific literature and popular press alike have become crowded with materials linking payments to performance in the medical world.

The desired purpose of the payment system is to encourage a high level of quality in health care. However, any initiative has to be measured on account of its results, and the effectiveness of the above-mentioned programs has not yet been systematically evaluated. A theoretical approach based on logic would indicate that financial incentives are capable to stimulate high-quality health care. However, passing on to a more practical level, numerous questions arise. Any pay-for-performance program involves a number of policy choices and judgments. 3. What is the current state of managed care in the U.S. health care systemThe most important external force forecasted to affect the U.S. health care system is of demographic nature.

There are a number of aspects that should be taken into consideration when analyzing the future of the industry. First of all, the U.S. population is currently undergoing a process of fast aging. However, paradoxically, the life expectancy of the senior population is gradually extending. On the other hand, the aging population will put great financial pressure on the medical system. Predictions are pessimistic, as no less than 78 million baby boomers are expected to turn 65 by 2011 (Plunkett Research 2005).

Hence the demographic factor has negative implications on the U.S. managed care system.