The Rapid Growth of Managed Care Essay

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The rapid growth of managed care is the response to limited financial resources and the demand for healthcare services to be affordable. Economic viability is a crucial aspect of health care. Managed care plans were developed to provided health care services, but also to be a method to collect payment for services. There are different types of managed care plans. For example, health maintenance organization (HMO), preferred provider organization (PPO), and point-of-service (POS) plans. For brevity of this paper the HMO managed care system will be discussed along with the relevance of the role of the advance practitioner practicing in HMO setting.
The 1970's need for primary care settings to curtail and control cost for employee …show more content…

Another advantage is HMOs have an authorized formulary that covered the cost of prescription medications. The down-side if a care provider prescribed a medication that is not authorized then the expense is placed back on to the consumer unless prior approval is obtained. There are times when a particular medication or specialist is required and will involve the prescribing person to contact the HMO for preapproval. Another disadvantage after seeking preapproval the claim may be denied, but the consumer does have the option to appeal the decision. This does create a problem when there are time constraints; which is another disadvantage.
What is happening to the premiums? Today's economic times have forced HMOs to increase premium rates. In the last few years there has been a substantial increase in premiums. In 1997, an article printed in Business Week reported although a growing number of consumers are enrolled in a HMO the higher prices of medical cost has forced HMOs to lay off employees and forced the sell off of some HMOs. This style of managed care had turned into a commodity business which is no longer profitable. What did this mean? It meant that HMO are now stuck competing on prices and battling for market shares.
Consumers were demanding healthcare change because of the rising cost of premiums. In the markets, rival insurers started to offer nearly identical plans,

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