The Demand For Cost Containment

To guarantee that its members receive appropriate, high level quality care in a cost-effective manner, each managed care organization (MCO) tailors its networks according to the characteristics of the providers, consumers, and competitors in a specific market. Other considerations for creating the network are the managed care organization's own goals for quality, accessibility, cost savings, and member satisfaction. Strategic planning for networks is a continuing process. In addition to an initial evaluation of its markets and goals, the managed care organization must periodically reevaluate its target markets and objectives. After reviewing the markets, then the organization must

Cost containment is a way for the U.S health care delivery system to solve inflation in cost which will save money for the hospitals involved. According to “Health Care Cost Containment: A Contradiction in Terms?” cost inflation has many contributors including the increased cost in hospitalization, advancing medical technology, prescription drugs, professional degrees, legal settlements, and other related services (McConnell CR, 2002, p.70-71). All of these contributors are coming from different aspects of the health care delivery system but they all end up with the same results. Cost containment effort ideas can solve all of those problems as long as they are properly implemented and people really believe in helping to keep costs at a

With the Centers for Medicare and Medicaid (CMS) providing coverage for over 100 million citizens in the United States and being the largest care delivery system, it is hard to ignore their presence in the ever changing health care delivery system. Some say, that where Medicare goes, private payers will follow. Today, hospitals, health systems and other providers have been highly influenced by Medicare. Medicare, Medicaid, the Children 's Health Insurance Program, and the Health Insurance Marketplace are leading the way in the movement to provide coverage under this system. As the Affordable Care Act is ironed out, there are still billions of dollars being spent within the Medicare/Medicaid programs. In an effort to try and combat some of the overwhelming costs of these programs, the Accountable Care Organization (ACO) Model has slowly begun to integrate itself into the Medicare/Medicaid system. This has brought about some interesting changes with reimbursement, cost containment, and quality of care. Each making slow shifts towards change and developing new systems of providing quality health care.

According to Leiyu Shi and Douglas A. Singh, the integration approaches contains two types of service strategies, which is the vertical and horizontal integrated health systems. The vertical integration strategy links services at different stages in the production process of health care. One of the examples is Cleveland Clinic, for it’s a vertically integrated system that has primary care, acute care, post-acute services, and a hospital. Cleveland Clinic main objective is to increase the comprehensiveness and continuity of care in the health care services. As for horizontal integration strategy, it links organization through ownership or alliances to extend its core product or services. Quest Diagnostics is a good example of horizontal integration, for its services are similar to existing services. Quest Diagnostics main objective is to control the geographic

According to Harrison (2016), “an integrated physician model is the result of a series of partnerships between hospitals and physicians developed over time.” The plan behind this model is to enhance joint efforts with medical specialists and associations. There are four strategies that need to be implemented for successful integration: “1) understand the forces affecting physicians; design strategic offerings to meet the needs of local physicians, 2) understand the hospital or health system’s specific capabilities and infrastructure in the context of the communities served, 3) ground physician-integration efforts on a well-defined strategic financial plan with sufficient resources and performance targets, and 4) ensure strong physician participation, leadership and governance.” (Cullen, S. J., Lambert III, M. J., & Pizzo, J. J. (2012)

It is essential to acknowledge the fact that the costs of health care in the United States is expensive. Furthermore, many factors influence the inflation of health care costs. Consequently, there have been numerous failed attempts to control the costs of health care. As a result, some of the failed attempts to control the increasing costs of health care were lowering health care provider payments, decreasing health benefits, and increasing out-of-pocket costs for patients (Shannon, 2009). Overall, one definition of cost containment is to contain health care providers ' profits and income (Oberland, 2011). However, it seems that containment should also focus on the high medical service prices as well. The purpose of this paper is to reconcile cost containment and quality of care.

The first step was to evaluate their current operations in each region. This was accomplished by determining data components from different functions of the current information system. The data was then evaluated on the benefits of combining the inpatient and outpatient systems. The next step was to look at the cost of implementation. Research was gathered from literature, interviews from experts, site visits, data analysis of Kaiser Permanente’s data, and focus group interviews. This research was reviewed and the project team enhanced their validation process. The third step was to examine the long term investment of the project. The project team determined one-time expenses and recurring expenses. Then the team developed different examples that would demonstrate financial approaches toward implementation for a ten year period. These approaches ranged from conservative to aggressive. The last step was to determine the net value by looking at the implementation lag and benefit realization. (Garrido) During the “go live” stage the team monitored and evaluated pre-implementation data compared to post-implementation data. Adjustments were made so that processes could be improved and benefits were greater.

But mostly the barriers to integrations are on the legal side. As mentioned in the article for this module, one obstacle would be the The Sherman Antitrust Act prohibits negotiations between providers that could result in excessive market power. Also, there is the issue of the anti-kickback law and Civil Monetary Penalties (CMP) Law where it mandates a penalty for payments from hospitals that directly or indirectly encourage physicians to reduce or limit services to Medicare or Medicaid patients. Finally, Stark Ethics in Patient Referral Act. According to Stark Law, it prohibits referrals of Medicare patients to institutions in which the physician has a financial interest.

Despite of increased pressure to reduce health care spending, enhance quality of care, and prepare for changes associated with the federal health reforms, most of the players in the industry are venturing into new grounds. These players are usually distorting the difference between businesses that have conventionally been varying. Many health care facilities are mainly using enormous systems, combining with each other, and creating extensive new doctor work forces. These facilities are exploring setups that are insurance-like such as the direct initiatives to workers that lessen the

Client family education is important because it helps to improve a patients knowledge on their health and ways to improve their health, so they can make educated decisions in their healthcare and lifestyle based on what they believe their needs are. Patient education is meant to influence behavior, through increased knowledge and skills to maintain and improve health (Habel, 2005, p.2). Nurse’s have a vital role in patient education, and their collaborative skills can help patient’s obtain the necessary tools needed to promote change. “Cost containment studies have shown that educated patients maintain better health and have fewer complications” (Habel, 2005, p.2), solidifying the importance of patient and family education.

Strategic alliances have been incorporated into the healthcare field as an ever-present operational and strategic consideration (Kaluzny, Zuckerman, & Ricketts, 2002). Strategic alliances are designed to achieve strategic purposes not attainable by a single organization, providing flexibility and responsiveness while retaining the basic fabric of participating organizations (Kaluzny, Zuckerman, & Ricketts, 2002). Strategic alliances should be entered very carefully and with a strategic plan. A strategic alliance is not as complex and not as everlasting as a bonded endeavor.

After five major hospitals in Massachusetts merged together in 1996, CareGroup became the second largest collection of hospitals in its region. As the hospitals needed to increase their contracting power against health maintenance organizations, improve the quality of care while simultaneously decreasing costs and remain profitable in a complex price war, merging was their best option to remain successful and to provide the best treatment for patients. However, the hospitals initially experienced revenue loss over seven years as the group’s operations were decentralized and unstandardized. To remedy the issue, a new, cutting edge information technology system was developed successfully in 2002 and implemented.

Since 1993, the Truven Health 100 Top Hospitals program has used both independent and objective research to guide hospital and health system performance. In this process, they analyze public data sources to compare hospitals to similar organizations. The 100 Top Hospitals program uses a balanced scorecard that incorporates public data, proprietary, peer-reviewed methodology and key performance metrics to arrive at an objective, independent analysis of hospital or health system performance. This research measures performance, organizational alignment, progress

One study of 36 large IDNs that contained hospitals, physicians, and health plans found that the more providers invested in their IDNs, the lower their operating margins. Moreover, as hospitals diversified into these different businesses, the larger was the negative impact on their financial position (e.g., higher debt to capitalization ratio). (Burns, Gimm, and Nicholson, 2005 pg 21). A more recent study has found that integration of health plans with providers (hospitals or physician groups) to serve the Medicare Advantage population is associated with higher plan premiums (Frakt, Pizer, and Feldman, 2013 p 21).

The hospital management system will enable the hospital to reduce its operating costs, and also provide better care to its patient's which leads to increase in the hospital's profit. Using the system, the hospital would cater for the same number of patients using fewer healthcare providers, and they would use less time than before to handle a single patient or case. Doctors would have more time to concentrate on providing treatment and care to the patients instead of doing clerical activities of writing down patient notes and other such things(Hardgrave, Wilson, & Eastman, 1999). Hospital administrators would be able to streamline the operations of the hospital and thus would reduce the cost of running the hospital drastically. With the streamlined operations, the response time to patient care would increase as retrieving and collecting the patient records would be an easy process.