Managed Care Payment Systems

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

Managed care and its competition is being viewed to solve their issue on the struggle to control

States have chosen to two forms of Medicaid managed care to better deliver healthcare services besides the traditional fee-for-service Medicaid programs; primary case management and traditional health maintenance organizations. “In primary care case management, the state Medicaid agency contracts with a primary gatekeeper entity (e.g., physician, clinic) that coordinates primary and specialty care for Medicaid beneficiaries. For healthcare maintenance type programs, a State Medicaid agency contracts with an existing healthcare maintenance organization, prepaid health plan, or other institutional health care provider who, in addition to proving primary care services, assumes insurance risk of providing covered services. Typically primary case management are paid on a fee-for-service basis plus a monthly case management fee per enrollee, while health maintenance organization plans are paid a capitation rate and are at full financial risk.” (1)

The Patient Protection and Affordable Care Act (Obamacare) had mame dramatic changes in the field of the health care system, especially in Medicare, that will seriously take effect in American seniors. Indeed, much of the health law’s new spending is financed by spending reductions in the Medicare program. In addition to the provider payment reductions, Obamacare significantly reduces payments to Medicare Advantage (MA) plans by an estimated $156 billion from 2013 to 2022.( Elmendorf, letter to Speaker Boehner). About 27 percent of all Medicare beneficiaries are enrolled in MA plans, a system of regulated and private plans competing against each other as an alternative to traditional Medicare. MA plans are attractive to beneficiaries because they offer more generous and comprehensive coverage than traditional Medicare by capping out-of-pocket costs and offering drug coverage to a rasonable

While there has been large media coverage about the insurance impacts of the Affordable Care Act (ACA), there has been a smaller amount discussed of the law’s changes to provider reimbursement policy, reforms to the delivery system, and investments in programs to improve the quality of care and constrain long-run growth in health care costs. And yet, the elements included in the ACA directed at cost and quality is possible to affect the practice of care for nearly every provider across the country. Although cost containment policies and initiatives are largely applied through federal health programs which including Medicare and Medicaid; cost containment in these programs has important cost-saving spillover effects to private health care markets through changes in health care practices and pricing across sectors of care.

The negative impacts of healthcare reform to health systems are significant in that health systems are preparing their resources on developing Accountable Care Organizations (ACO) for bundled payments and population-based reimbursement. In this economy the impact to health systems may require healthcare systems to figure out ways to continue to keep positive financial performance due to the cost-reduction of healthcare reform. For some time now, health systems have subsidized their losses from the Medicare and Medicaid systems by contracting with commercial payers for their premium rates. As a result of the healthcare reform, cost shifting will shrink. Another negative impact over the next few years will be the large shift in health plan enrollment. Less people will be covered by highly

This paper examines the benefits and issues with managed care. The benefits include patients receiving preventative care, lower premiums, lower costs of prescriptions, fewer, unnecessary procedures, and less paper work. Some issues with managed care include limitation on doctors that patients can choose from, restricted coverage, the possibility of under treatment, and compromised privacy. Managed care effects nursing by causing significantly few jobs for registered nurses, more opportunities in non-acute health care settings, and more use of advanced practice nursing.

The method in which healthcare services are funded has gone through many changes over the past fifty years. The country has seen the expansion of insurance from paying medical bills for hospital stays, to the creation of managed care, and the passing of the Affordable Care Act (ACA). In order to prevent future issues with financial options for healthcare services, healthcare administrators must analyze past funding systems to understand the oversights and misinterpretations. This paper will investigate fee-for-service practices and how this practice led uncontrolled utilization.

Over the past fifty years, the method in which healthcare services are funded has gone through significant changes. The country has seen the expansion of insurance from paying medical bills for hospital stays, to the creation of managed care, and the passing of the Affordable Care Act (ACA). While the process has not been without challenges, healthcare administrators must continue to analyze past funding systems to understand the oversights and misinterpretations to prevent complications in the future. This paper will investigate fee-for-service practices and how these practices have progressed to uncontrolled utilization.

Managed care is a health insurance system designed to reduce the cost of health care while providing quality services to gain maximal outcomes (“Managed Care,” n.d.). According to Medicaid.gov (n.d.), under the managed care system, members receive care at reduced costs due to contracted agreements between state Medicare agencies and health care providers. While States are progressively using managed care for Medicaid beneficiaries, the available evidence concerning its effect on health care outcomes is mixed, with little consistent evidence to support its efficacy (Caswell & Long, 2015).

The U.S has many payer systems which many believe it to be its downfall among other countries. This may be because many view it more as an economic business and not an overall wellness plan. The United States’ main public program of funding is Medicare, which once followed a standard form of payment. It is now envisioned as a futuristic model that encompasses the payments of providers. Medicare is a national social insurance program that is run by the government since 1966. Also unlike Great Britain system, the program provides health care to Americans over 65 years of age for those who have paid their work dues in the system. Medicare has also extended its reach to those Americans who may be veterans or disabled. Another huge form of payment to providers is through Managed care which can be beneficial to physicians in the fee for service and capitation aspect. While this form of payment is similar to Great Britain’s programs, their execution of it remains vastly different. Managed Care is a type of healthcare system with health care plans that has restrictions on its selection of facilities and health care providers at a reduced cost for the patient. Rather than come to a conclusion about better ways to negotiate with payers, U.S providers continue to rage war against

Managed care dominates health care in the United States. It is any health care delivery system that combines the functions of health insurance and the actual delivery of care, where costs and utilization of services are controlled by methods such as gatekeeping, case management, and utilization review. Different types of managed care plans came into development by three major factors. These factors include choice of providers, different ways of arranging the delivery of services, and payment and risk sharing. Types of managed care organizations include Health Maintenance Organizations (HMOs) which consist of five common models that differ according to how the HMO is related to the participating physicians, Preferred Provider Organizations

One of the greatest changes in healthcare in the past ten years has been the rise of managed care, much to the displeasure of many patients and physicians alike. Managed care arose out of concern about spiraling healthcare costs and was designed to encourage physicians to give patients treatments that were cost-effective out of their own financial interests. "The consumer strategy was directed at imposing some barriers to use by levying various forms of co-insurance. The most common approaches used either deductibles (where the consumer paid the first portion of the bill a technique familiar in other types of insurance) or co-payments (where the consumer paid a portion of the bill and the insurance company the rest) or a combination of both' (Kane et al 1994). Managed care has given health insurance companies an increasingly significant voice in how treatment is administered and allocated. Managed care has proliferated in the past decade despite considerable criticism of the practice of 'nickel and diming' patients as well as the considerable bureaucratic red tape it is has generated. Also, research indicates that healthy, well-insured patients tend to over-consume care without meaningful co-pays but poorer, sicker patients can be deterred even by moderate co-payments and suffer negative health consequences (Kane et al 1994). However, managed care has not gone away and is a reality that all healthcare

Critics believe that the present functioning of managed-care is degenerative to health care. Managed-care firms control costs by requiring patients to use a “network” of approved doctors and hospitals, and by reviewing the actions of doctors. Patients have to pay more to visit a doctor who does not participate in the “network.” Managed-care firms second-guess doctors, considering only the costs. Patients are often prevented from visiting specialists to reduce costs. A managed-care company might insist that its doctors prescribe inexpensive generic drugs instead of commercial products. Many patients must, also, receive the insurer’s approval before undergoing treatments or operations. HMOs have been criticized for refusing to pay when a patient goes

The Iron triangle for healthcare consists of cost, quality, and access; these three characteristics when balanced create great healthcare. Managed Care Organizations combine the three to offer consumers with care that is appropriate for their individual needs. Our book describes managed care organizations as “the cost management of healthcare services by controlling who the consumer sees and how much the service cost” (Basics of the U.S Healthcare System, Niles). Taking a look at the history prior to the Health Maintenance Organization Act of 1973 (HMO ACT of 1973) the implementation has been significant in balancing cost, and quality control. Before this Act was signed in to law by President Nixon healthcare costs were determined by fee for service. A fee for service or indemnity plan is a plan that allows the provider to determine the cost of service, this fee for service plan caused for healthcare costs to increase rapidly. An example of this would be going to the doctor with neck pain, being told to stretch then receiving a bill for 25,000 dollars. As could be understood the cost of healthcare had became a problem.