Managed Care Changes

Health System Reform in the United States: Impact of Rising Premiums and Opportunities for System Improvements to Enhance Access to Healthcare Services

In this country there are numerous concerns about health care economics. Several factors contribute to the increase of health care costs. One area of concern is the impact of managed care on health care finances. Managed care has been around since the early 1970s. The definition of managed care is a set of contractual and management methods implemented to manage the financing and delivery of health care services. Initial implementation of managed care was for health care cost saving (Getzen & Moore, 2007, p. 203, para. 1). Though Managed care initially addressed several health care finance issues, there are still problems with the current

On the same level from a patient’s perspective, providers are even challenged with increased costs. Even though insurance is becoming more affordable the money, unfortunately has to be recovered utilizing other

Health care systems are refining their strategies in line with the changing market dynamics. These dynamics range from competitions to a change in the technological developments. It is worth noting that other than changes happening in the markets, the health care facilities have been highly impacted by changing legislations, such as the passing of the Affordable Care Act. Constantly evolving health care system calls for reevaluation of current strategies that have an impact on the quality of performance, as well as the value of the services offered to the clients. Historically, the reimbursement was driven by the volume rather than the value. Utilization of efficient transition of care, as a value-based care, will allow for overall cost savings, lower rate of readmission, and continuity of care. The purpose of this paper is to examine the utilization of strategies to enhance the transition of care, as a value-based care.

Americans have seen a raise in health care expenses during the 1980s, the results were extensive; managed care were assumed by employer-sponsored health plans. To a certain extent, managed care methodologies were implemented for some Medicaid and Medicare enrollees. During the 1990s, new Medicare reimbursement policies and the well-known acceptance of managed care plans had noticeably reduced the growth rate of health care expensive. All available studies show that Health Maintenance Organizations (HMOs) and other managed care plans have provided health care of equal or better medical quality to out-of-date covered insurance plans at a lower cost. While the country’s economy grow stronger during the late 1990s, anxieties about overall health care costs diminished, “and the public became less willing to accept restrictions on the enrollee's choice of physician and the physician's treatment choices” (Luke, 2001). Health care

Managed care as defined by Merriam-Webster.com is “a system of providing health care (as by an HMO or a PPO) that is designed to control costs through managed programs in which the physician accepts constraints on the amount charged for medical care and the patient is limited in the choice of a physician.” While the definition is appropriate for health plans, physicians and government entities focused on cost control and utilization reduction; it does not include the patient’s expectation of increasing quality of care.

Health Maintenance Organization (HMO) – HMOs are indeed the typical type of managed care health insurance plans, and they mainly focus on preventive care and wellness. Members pay a fixed annual premium and they only have limited access to certain physicians and hospitals within its network. Medical care is also limited to a prearranged. Most HMO plans require members to choose a network physician as a primary care provider (PCP). In addition, to consult with a specialists, members must obtain referrals from their PCP or their case manager. (USLegal.com)

Even though there are many different challenges that will define strategic directions of the healthcare industry, five different challenges will be discussed within this paper. These challenges appear in all States and across the whole medical field from clinics, public hospitals, and private pharmaceutical companies. The selected challenges here will define what quality of services and terms that of the healthcare systems in the coming years. Because this involves several function variables, it is tough to know what to predict the progress of the systems within the health care industry.

HMOs multiplied rapidly with the new federal giveaways. Managed care, now including PPOs, mushroomed. Employers initially perceived managed care plans as cheaper than traditional fee-for-service insurance. Gradually, they stopped offering a choice of health plans, making individual policies more expensive. HMOs' penetration of the industry had been subsidized into existence. Government had instituted managed care. Today, while overall quality of patient care remains the best in the world, doctors practice medicine in an increasingly intricate web of rationing and regulations: Physicians are stripped of professional autonomy. As patients wander the maze of managed bureaucracy, costs rise and quality deteriorates. Every American dependent on a third party for health coverage is a potential victim of managed care. And state sponsored management of medicine

The payment system in health care is evolving and if a health care organization does not change with it, it will fail. The health care organizations need to reduce their cost and reduce inpatient days because refund from the government can be affected. In addition, when costs and inpatients days are reduce, there needs to be other areas improved to gain more net worth. Therefore, quality needs to be improved so that there is more income entering the organization. Also, the leaders of the organization need to budget their finances so that they can reach all their goals and maintain their philosophy. According to Wolper (2013), “group practices have struggled to cope with declining reimbursement, increasing purchaser pressure, and a constantly shifting environment”. (p. 89) This is why I believe the payment system is one of the areas that will impact health care organizations now and in the future.

Private insurance companies negotiate prices with hospitals and health care providers to confirm what will be paid by the insurer. These negotiations can be taxing as both entities fight for what is most profitable for them. The providers involved with the negotiations are “in network providers” and all others fall into the out of network realm and run the risk of not being reimbursed or being paid a certain amount leaving it up to the consumer to pick up the remaining balance. Managed care provides a system by which the priority of health care is to reduce costs while ensuring that the delivery of quality health care is provided to consumers. The different types of managed care organizations include Health Maintenance Organization (HMO) and Preferred Provider Organization (PPO) and both systems follow different payment methods. HMO’s use capitation or fixed annual payments for each person its exclusive list of providers sees no matter what type of care or how much care is provided and PPO’s, like traditional insurance companies, negotiate rates of payment with providers and members enjoy lower out of pocket costs such as deductibles and copays. With PPO’s, members could choose out of network providers and would pay the difference between the reimbursement rate of the plan and the changes of the

Managed care was established in order to manage health care cost, utilization, and quality (Kongstvedt, 2015). In managed care, health insurance is provided through HMO, PPO, and other types of managed care. It has the potential to reduced health care spending and improved the quality of care. However, despite of its success in improving the quality of care through preventive health care services, chronic disease management program, and so forth, many physicians are reluctant to be part of the managed care environment. Some of the reasons are the impact of managed care to physician’s income and autonomy. Under managed care, insurers have decreased the fees paid to physicians. There are different ways how managed care organizations control costs. One of this is through selective contracting with health care providers and hospitals to lower costs. In selective contracting, health care providers agreed to accept lower prices in exchanged for guaranteed volume of patients under managed care plan (Culyer, 2014). This paper will discuss more issues and trends in Managed Care Organizations such as the rise of Medicaid Managed Care spending, the new Medicaid Managed care Rule, and the collaboration of Managed Care Organizations and Accountable Care Organizations to reduce health care spending and improve efficiency of care.

Looking back, Physicians were chiefly employed by a Fee-for-Service payment model, in which they received payment for each individual service they provided, this in turn supplied incentives for Doctors to provide more treatments causing over-utilization of resources and thrusting healthcare costs into an all-time high and thus managed care was born. In short, managed care refers to "a wide range of financial and organizational models that attempt to control the cost of health care", including the "HMOs, PPOs, IPAs, PSOs, PHOs, IDNs, (Integrated Delivery Networks) and, as Leah Curtin, Editor of Nursing Management, once described them, 'OWAs' (other weird arrangements)" (Huntington, 1997). It essentially shifted the power from providers into the hands of the insurers which slowly pushed physicians away from independent practice and into group practice (Kongstvedt, 2013). Out

Within the last decade, health care has gone through drastic changes due to reforms that have impacted all levels of the United States health care system. From the 2010 enactment of the Affordable Care Act, the financial operations of many medical institutions have faced many improved and challenging transformations. Many of these transformations included the day to day administrative tasks, increased overhead expenses, and incurred costs brought on by practice and hospital adherence to new reforms. Currently, there is much debate on new reforms that would assist in improving the financial operations of the current health care system. Correspondingly, strong reforms have the ability to assist in making the health care system more efficient

As health care organizations are moving from fee-for-service reimbursement models to value-based care models, expeditiously, clinicians are becoming aware that the health care sector in the United States is changing. Clinicians who provide hospital services, and every point of service along the continuum thereafter, are mindful of emerging themes—improving the health of populations, enhancing the patient experience of care, and reducing the per capita cost of health care—these and other transformational changes are essential to ensuring health care organization attain fiscal sustainability in the 21st century.