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By 1970 the rising cost of health care coverage as a percentage of the Gross Domestic Product of the United States caught political attention. Health Maintenance Organizations as thought of today began under the Richard Nixon administration in an effort to the control federal healthcare spending (Rodwin, 2010). The federal government created subsidies to start HMOs, encouraged their use in Medicare and Medicaid, and encouraged commercial HMOs (Rodwin, 2010). Due to differing political aims the structure not only included efforts to control costs through oversight of medical practice, physician payment, and influence decisions about medical care, the legislation also included benefits to set a foundation for those policy makers seeking a pathway to nationalized health insurance by including comprehensive benefits, open enrollment and community rating (Rodwin, 2010). These competing aims resulted in HMO premiums costing as much as traditional plans (Rodwin, 2010).
The many common features of health care plans today began with HMOs, such as coverage for preventative services and prescription drug benefits (Kongstvedt, 2013). Other features of the HMOs were: a) closed networks where only services could be provided by an HMO doctor, b) capitation where providers were paid a fixed amount based on the number of patients covered, c) the primary care provider as a “gatekeeper” to refer to specialists, d) required pre-authorization for elective procedures to ensure medical necessity, e) encouragement of outpatient procedures over inpatient, and f) oversight to reduce hospital length of stay (Kongstvedt, 2013). Additional trends of HMOs during the 1970 and 1980s to control cost that continue today were the process of utilization review of ...
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...e of the 1990s and consumers who had not previously experienced utilization control were starting to have requested services denied. This heralded a backlash against HMOs and legislation that protected patient’s rights to appeal denials. Today both cost and access are large issues in health care. The ACA’s requirements for expanded coverage and oversight on premiums and medical loss ratio as well as reimbursement under Medicare and Medicaid are resulting in premium adjustments in the private insurance market, increased consolidation in health care provider systems, and intense focus on reducing readmissions and preventable hospital acquired conditions. Managed Care has not been influenced by one goal or one voice but by a balance of conflicting goals and stakeholders as cost, access, quality, and choice are balanced by providers, insurers, government and patients.
It is enthralling to note that in spite of the advances in healthcare systems, such as our hospital’s ability to provide patients with lower cost, managed One being the Health Maintenance Organizations (HMO), which was first proposed in the 1960s by Dr. Paul Elwood in the "Health Maintenance Strategy”. The HMO concept was created to decrease increasing health care costs and was set in law as the Health Maintenance Organization Act of 1973, after promotion from the Nixon Administration. HMO would, in exchange for a fee, allow members access to employed physicians and facilities. In return, the HMO received market access and could earn federal development funds.
Davidson, Stephen M. Still Broken: Understanding the U.S. Health Care System. Stanford, CA: Stanford Business, 2010. Print.
When one examines managed health care and the hospitals that provide the care, a degree of variation is found in the treatment and care of their patients. This variation can be between hospitals or even between physicians within a health care network. For managed care companies the variation may be beneficial. This may provide them with opportunities to save money when it comes to paying for their policy holder’s care, however this large variation may also be detrimental to the insurance company. This would fall into the category of management of utilization, if hospitals and managed care organizations can control treatment utilization, they can control premium costs for both themselves and their customers (Rodwin 1996). If health care organizations can implement prevention as a way to warrant good health with their consumers, insurance companies can also illuminate unnecessary health care. These are just a few examples of how the health care industry can help benefit their patients, but that does not mean every issue involving physician over utilization or quality of care is erased because there is a management mechanism set in place.
Health Maintenance Organizations, or HMO’s, are a very important part of the American health care system. Also referred to as managed care programs, HMO's are combinations of doctors and insurance companies that are formed into one organization. This organization provides treatment to its members at fixed costs and decides on what treatment, if any, will be given based on the patient's or doctor's current health plan. Sometimes, no treatment is given at all. HMO's main concerns are to control costs and supposedly provide the best possible treatment to their patients. But it seems to the naked eye that instead their main goal is to get more people enrolled so that they can maintain or raise current premiums paid by consumers using their service. For HMO's, profit comes first- not patients' lives.
The United States (U.S.) has a health care system that is much different than any other health care system in the world (Nies & McEwen, 2015). It is frequently recognized as one with most recent technological inventions, but at the same time is often criticized for being overly expensive (Nies & McEwen, 2015). In 2010, President Obama signed the Patient Protection and Affordable Care Act (ACA) (U. S. Department of Health & Human Services, n.d.) This plan was implemented in an attempt to make preventative care more affordable and accessible for all uninsured Americans (U.S. Department of Health & Human Services, n.d.). Under the law, the new Patient’s Bill of Rights gives consumers the power to be in charge of their health care choices. (U.S. Department of Health & Human Services, n.d.).
Formed in 1998, the Managed Care Executive Group (MCEG) is a national organization of U.S. senior health executives who provide an open exchange of shared resources by discussing issues which are currently faced by health care organizations. In the fall of 2011, 61 organizations, which represented 90 responders, ranked the top ten strategic issues for 2012. Although the issues were ranked according to their priority, this report discusses the top three issues which I believe to be the most significant due to the need for competitive and inter-related products, quality care and cost containment.
In the business of drug production over the years, there have been astronomical gains in the technology of pharmaceutical drugs. More and more drugs are being made for diseases and viruses each day, and there are many more drugs still undergoing research and testing. These "miracle" drugs are expensive, however, and many Americans cannot afford these prices.
In conclusion, managed care integrates the functions of financing, insurance, delivery, and payment within an organization. It also exercises formal control over utilization. Managed care is viewed as accepting the lowest competitive bid for services rendered. Today, HMOs and PPOs are the most common and widely used models for managed care. Although managed care is here to stay, it requires revision in some areas. Challenges that are to be faced include double agentry, fidelity, confidentiality, honesty, and vulnerability. With the help and guidance of health information professionals, managed care will continue to escalade and become better for all.
The ACA expanded Medicare/ Medicaid, strengthened employer based care, and included an individual mandate. Before the ACA there were 32 million people uninsured and “approximately half, or 16 million, will gain coverage through an expansion of Medicaid” (Barr, 2011, p. 292). To improve the cost of care the ACA required employers with more the 50 employees to offer plans and individuals would have to purchase plans from the government. “ACA does not address directly the issue of disparities in access of care based on a patient’s race or ethnicity, it does impose on providers the responsibility for collecting data on the race or ethnicity, primary language, disability status, and similar demographic characteristics of patients cared for” (Barr, 2011, p. 293). The ACA strives to give health coverage to all but the power still lies in the private sector.
The Affordable Care Act (ACA) is a federal that was signed into law by President Barack Obama on March 23, 2010 to systematically improve, reform, and structure the healthcare system. The ACA’s ultimate goal is to promote the health outcomes of an individual by reducing costs. Previously known as the Patient Protection and Affordable Care Act, the ACA was established in order to increase the superiority, accessibility, and affordability of health insurance. President Obama has indicated the ACA is fully paid for and by staying under the original $900 billion dollar budget; it will be able to provide around 94% of Americans with coverage. In addition, the ACA has implemented that implemented that insurance companies can no longer deny c...
Managed care reimbursement models have contributed to risk avoidance by negotiating discounts, discouraging use, and denying payments for charges that appear to be false. Health care reform has increased awareness to the quality of care providers give, thus shifting the responsibility onto the provider to provide quality care or else be forced to receive reduced reimbursements (Buff & Terrell,
Rising medical costs are a worldwide problem, but nowhere are they higher than in the U.S. Although Americans with good health insurance coverage may get the best medical treatment in the world, the health of the average American, as measured by life expectancy and infant mortality, is below the average of other major industrial countries. Inefficiency, fraud and the expense of malpractice suits are often blamed for high U.S. costs, but the major reason is overinvestment in technology and personnel.
To further understand the US healthcare system and put in context how health coverage is provided to its population it is important to compare the US health system to another country like the Netherlands. In the Netherlands healthcare coverage has been achieved through competitive insurance markets similar to the US and the Dutch government does not control prices, productive capacity or funds but instead only acts as a regulator (Daley & Gubb, 2011). In 2006 the Dutch government held healthcare reforms because the country faced an issue that was very similar to the US, in regards to healthcare coverage inequalities, the population was covered through private and public health insurance, with stable private health insurance for the wealthy and unstable public insurance which lacked patient focus and was inefficient in comparison (Daley & Gubb, 2011). Many factors called for healthcare reformation in the Netherlands like a disarranged structure that ineffectively controlled cream skimming, lack of competitive incentives that for insurance companies resulting in bad performance, and the rising premiums
American’s health-care system is in turmoil. According to Bradley and Taylor (2013), “we spend nearly twice what other industrialized countries spend on health-care” (para.2). See figure 1;
The US health system has both considerable strengths and notable weaknesses. With a large and well-trained health workforce, access to a wide range of high-quality medical specialists as well as secondary and tertiary institutions, patient outcomes are among the best in the world. But the US also suffers from incomplete coverage of its population, and health expenditure levels per person far exceed all other countries. Poor measures on many objective and subjective indicators of quality and outcomes plague the US health care system. In addition, an unequal distribution of resources across the country and among different population groups results in poor access to care for many citizens. Efforts to provide comprehensive, national health insurance in the United States go back to the Great Depression, and nearly every president since Harry S. Truman has proposed some form of national health insurance.