Managed Health Care Case Study

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.

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.

Healthcare expenditures have more than doubled since 1965. Americans spend over a trillion dollars a year on health care. (2). As of 1996, 110 million Americans were enrolled in HMO's. More than three-fourths of all individuals in HMO's are covered by job-based insurance. More than 13 million Medicaid recipients have been put into managed care plans. Managed care and HMO's have been the subject of many negative stories in the press and are constantly being charged with endangering the health and lives of their enrollees. As a result, congressional hearing, state, and federal regulation, and action by the

Healthcare in the United States has reached a level of complexity which has perplexed Presidents, Congressional members and private industry for over a century (Palmer, 1999). While the healthcare system has evolved over the last century, policy decisions which have attempted to effectuate changes to cost, quality and access have been

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.

In the hope of better coordinating the care of patients, improving quality and lowering costs, the ACA provides incentives for physicians and hospitals to work together in several ways, such as Accountable Care Organizations (ACO’s) or establishing bundled payments for episodes of care (Martin Gaynor, 2012 ) which has spurred consolidation (Becker, Gamble, & Rosin, 2015). Additionally, compliance with various federal programs such as Meaningful Use requires a significant investment in technology which can be fiscally challenging for smaller provider groups; driving acquisitions of these smaller entities by larger health systems. Other reasons cited by hospital administrators in the pursuit of consolidation is to ensure a steady stream of physician referrals (NPR, 2010), and to create economies of scale and increased efficiencies, the fruits of which result in reduced costs and therefore cheaper care for patients (ProMarket Writers, 2016). However, what most hospital

The subject of health care is a sore subject, one of the most debated topics in the United States of America today and it is also the source of a vast array of complex problems for the American people. Americans have seen an increase in the rates of uninsured Americans, an increase in the cost of health care, and a growth in profits for health care companies. Due to the problematic trends that have taken place in the health care system in the United States, many Americans have viewed it as “the health care crisis” (Obamacare Facts, 2015). During the administration of President Barack Obama, a new law was implemented in order to reform the United States’ health care system called The Affordable Care Act or ObamaCare or ACA.

Competition drives innovation and ultimately leads to the delivery of better healthcare. Competition has played a vital role in shaping the delivery of healthcare in the United States. Competition results in lower prices and broader access to health care and health insurance. Competition among and between hospitals and physicians intensified with the development of managed care organizations. In addition to putting pressure on costs, managed care plans have pressured providers to use shorter hospital stays and to offer alternative outpatient treatments (Botti, 2007). This led to lower costs and an increase in choice without sacrificing quality. Lower costs and improved efficiency has made health insurance more affordable and available. Another benefit of competition in health care is the innovation in healthcare technology (i.e. endoscopic surgery, anesthetic agents available in ambulatory surgery centers).

In the early 1930’s, the Blue Cross/Blue Shield Organization led consumers to hospitalization and medical coverage under their own charter for everyone who sought coverage for one prepaid fee.  Years later, other insurance companies, such as Kaiser Permanente began to offer coverage to consumers within their geographic boundary. However, health care spending is on the rise. Over the last couple of decades the expenditures have risen from 724.0 billion dollars in 1990 to 2,486.3 billion in 2009(US census, 2011). Today, we are a nation with Health Care Reform signed into law by President Obama

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).

US health care expenditures have been rising quickly over the past few years; it has risen more than the national financial system. Nonetheless a number of citizens in the US still lack appropriate health care. If the truth be told, health care expenditures are going to continue to increase; in addition numerous individuals will possibly have to make difficult choices pertaining to their health care. Our health system has grave problems that require reform, through reforming, there is optimism that there will be an increase in affordable health care and high-quality of care for America. Medicaid, Medicare and private sector insurances are all going through trials and tribulations because of

There is an ongoing debate regarding the potency of the new health care reform—Patient Protection and Affordable Care Act—from the outset of its proposal. Many attempts had been presented in the past years but the root of the issue remains prevalent today, that there is a lack of quality in its delivery and the cost of care is continuously increasing beyond national economic edges. In this manuscript, we will discuss several factors that can positively sway the long-term significance, impact, and structure of the United States health care system. Many are wondering whether the Universal Coverage, to which will give more control and

Creating a health care reform plan for the U.S. health care system is no easy task. Multiple things must be taken into consideration. These include making insurance affordable, making sure the plan is economically feasible, and creating a plan that will still work in the future. What hindered the reshaping of health care into a sustainable system in the past, are the health sectors interests that prefer the status quo. By continuing to cling on to yesterday’s model, the health care industry is creating its own peril (Schaeffer, 2007).

The future of the health care industry is dominated by many uncertainties as it is feeling the heat of both regulatory and economic fronts. The health care industry is one of the most regulated in the United States and organizations are required to comply with a number of federal and state laws and regulations. There are financial drivers that would likely cause health care organizations to merge which means the underlying thought processes behind why two firms would expect that they are all the more monetarily solid when contrasted with being singled out from everyone else. These varieties of houses are more varied from advancement based offerings and are continually considering routes through which they could choose a leap ahead. The new marvels driving the health care sector have been active from the income side of the viability and lessening in costs. One notable part of the costs is to do with Research and Development consumptions. As an aftereffect of mergers, the establishments can assume control of the expenses and lessen the weight on assets.