Managed Care Market Analysis

"In the past two decades or so, health care has been commercialized as never before, and professionalism in medicine seems to be giving way to entrepreneurialism," commented Arnold S. Relman, professor of medicine and social medicine at Harvard Medical School (Wekesser 66). This statement may have a great deal of bearing on reality. The tangled knot of insurers, physicians, drug companies, and hospitals that we call our health system are not as unselfish and focused on the patients' needs as people would like to think. Pharmaceutical companies are particularly ruthless, many of them spending millions of dollars per year to convince doctors to prescribe their drugs and to convince consumers that their specific brand of drug is needed in

The healthcare system in the United States is a system composed of many private insurance companies who act independently from one another. These companies make their money through premiums which are paid by the insured; therefore a major part of the healthcare system is privately funded. This type of market is considered to be an imperfect market because it does not meet the true requirements of a free market where there is unrestrained competition between providers. In our healthcare system there is an absence of a central agency to govern healthcare. There are multiple payers and third party insurers serving as intermediaries between financing and the delivery of healthcare. The United States has a multi-payer, heavily private system in which thousands of private insurance companies are responsible for paying some claims, while federal and state

A major contributor to the rise of healthcare cost is that heath spending for individuals is primarily funded by third-parties. Because consumers of healthcare share little of the financial burden of the cost of the care they receive, patients and physicians are incentivized to utilize healthcare at a higher rate than they would if cost was a larger factor. The United States healthcare systems is based on a capitalist system but it operates in an imperfect marketplace that is no competitive. The current marketplace is not highly regulated as there is not a national health care program for all Americans which allow prices to be regulated and controlled effectively by a single regulating body. In this imperfect

The concept generates images of large healthcare entities managing the administrative protocols of prior authorization or denials to the actual delivery of care through a facility or network of healthcare providers. Hacker and Marmor (1999) described several meanings of the term managed care with the most applicable to the menagerie of forms managed care can take being a combination of the financing and delivery of healthcare services. While this particular study is dated, the authors contend any managed care structure features administrative oversight, patient steerage to a particular provider entity or network and the amount of risk-sharing whether at an individual or group level. These features continue to be true today as organizations explore the benefits offered to employees through managed care structures such as preferred provider organizations, clinically integrated networks, and accountable care organizations. As a healthcare provider, the goal is to provide access to healthcare which is affordable, offers access to providers of choice and engages with providers who provide the highest quality

Regulations that prevent insurance companies from participating in interstate commerce have caused competition to grow stagnant in the United States. This lack of competition has allowed the adoption of wasteful procedures by healthcare providers, which in turn passes the increased expenses back to the insurance companies. Therein, insurance costs increase, crippling consumer’s cash flow and quality of life. While healthcare costs continue to rise, people must scrutinize the current healthcare system.

There are so many different health care providers and types of health care services that we as consumers can receive. All those different services or facilities are going to have competitive prices for our medical care. I think a patient as a consumers are going to benefit from this. Not only do medical facilities have competitive prices but also insurance

The health insurance market in the United States has been anything but competitive since the dawn of it 's existence. In many states, a single health insurance provider dominates the market, with virtually no competition (Holahan and Blumberg). In the past, before 2010, there has been no “marketplace” to compare prices for health insurance, which has contributed to ignorance in terms of finding competitive, lower prices for health insurance. Essentially, health insurance providers have been “price makers” rather than “price takers” because the demand for health insurance is relatively inelastic (as people will always get sick or get

Managed care is described in a couple of different ways. The first way that managed care is described would be for financing insurance, delivery, and payments. The second way that it would be described is as an organization that delivers health care services without an insurance company managing how payments are made (Shi & Singh, 2015). There are three primary payment mechanisms used when dealing with different providers which are; capitation, discounted fees, and salaries.

Others argue that the absence of market competition could set back innovation in treatment and research. In a BalancePolitics.org article that summarizes the pros and cons of universal health care, one statement on the con side argues that “Free health care isn’t really free since we must pay for it with taxes; expenses for health care would have to be paid for with higher taxes or spending cuts in other areas such as defense, education etc.” The author then asks, “What good would it do to wipe out a few hundred dollars of monthly health insurance premiums if our taxes go up that much more?” (BalancedPolitics.org, Pro & Cons Argument) Shirley Svorny, a professor of economics at California State University and the author of a new Cato Institute study on Medical licensing offers what she considers a lower cost alternative to universal health care: “using innovation to make health care cheaper and more accessible.” (Svorny, Sun Herald) Svorvy claims that patients should have low cost options when it comes to certain routine medical procedures and check-ups. She points to the success of retail “convenience” clinics at Wal-Mart, Target and CVS pharmacies that are now staffed with nurse practitioners that can provide routine care at affordable prices. (Svorny, Sun

The Managed Care System was introduced to control the cost for health services provided to individuals. Managed care controlled who the consumer would seek health services from, as well as the cost of the service provided. MCO’s became deep-seated when President Nixon signed the Health Maintenance Organization (HMO) Act in 1973. The first type of managed care used were HMO’s and the purpose was to keep healthcare costs within limits. Physicians of course were against the Act. This would now control the fees that the physician would charge for the services they provide to the individual. As Managed Care evolved and increased in the amount of managed care plans that became available over the years. Physicians preferred guaranteed income as oppose

Within the capitalistic economic structure that defines American commerce, the delivery of healthcare has largely shifted from an emphasis on public service to the pursuit of commoditized profit generation, but because good health is unlike any other product on the market the evolution of healthcare economics has been muddled by the advent of managed care. While the law of supply and demand reigns supreme in the exchange of traditional goods and services, emergency surgical procedures, prescription medications, and in-patient care are all provided through a relatively competition-free environment. The traditional model in which a Primary Care Physician (PCP) served the vast majority of his or her local community, providing the full spectrum of basic healthcare services from the delivery of infants to annual immunizations, precluded consumers from exercising that fundamental right guaranteed by capitalism: the ability to shop for the best deal. Despite the high costs associated with the microeconomics of the PCP model, Americans largely tolerated the proverbial monopolization of healthcare delivery because they invested a tremendous amount of trust in their PCPs, who in many small- to medium-sized towns developed lifelong relationships with patients, assisting their births, providing pediatric care, administering adult physical examinations, and even providing convalescent and end-of-life care to members of their community.

care spans a wide variety of organizations, but the key idea is that MCOs are

I have tweaked my proposal a bit. I’d like to focus on the strong competition hospitals are facing from freestanding health facilities such as imaging centers, retail centers, and urgent care centers. With health care moving toward a value-based care system and payment method, independent care center have emerged. These centers promote patient consumer power within the health care system (Grube, Cohen, & Clarin, 2014). Thus, making major retail companies, imaging and surgical centers, and urgent care centers viable competitors in the health care market (Grube, Cohen, & Clarin, 2014). All of the entities compete with hospitals to offer service such as well-care services. Hospitals may find it difficult to compete with the care centers’ affordable pricing by matching more appealing prices. As patients learn more about healthcare they are empowered to decide where to go for services and how much to pay for services (Grube, Cohen, & Clarin, 2014).

Another group often blocked is complementary or alternative health care practitioners. These restrictions and the insurance industry unwillingness to pay for these services, gives the physicians an almost monopolist control over health care. Providers must be able to enter the market for competition to work and there must be many providers vying for the patient. To get the most out of health insurance plans Consolidation of hospitals and multispecialty group practices increases the negotiating leverage of the group but in certain areas of the US a single large medical system has become the sole provider of major health service thereby restricting competition (Shi & Singh, 2008). This consolidation while giving the hospitals and group practice leverage when negotiating prices of supplies and services tends to increase the price of health care to the patient because there is no longer any competition (Shi & Singh, 2008). For these reason “competition will remain less effective in most health care markets, because the prerequisite for fully competitive markets are not fully met” (Federal Trade, 2004, p. 20).

In all industries, competition among businesses has long been encouraged as a mechanism to increase value for patients. In other words, competition ensures the provision of better products and services to satisfy the needs of customers (Glover & Rivers, 2009). In the health care industry, competition has an impact on many relational perspectives. There have been several studies examining the relationships between competition and quality of health care, competition and health care system costs, and competition and patient satisfaction. Some elements of competition in health care are price, quality, convenience, and superior products and