Description
You?are?a?new?physician?setting?up?your?own?practice?in?a?new?town.?You?are?researching?the?different?MCOs
offered?in?your?area?and?are?considering?becoming?a?physician?for?one?of?these?networks.?You?have?also?invited
the?sales?representatives?of?several?health?plans?to?speak?with?you?about?the?benefits?of?choosing?their?plans.
Based?on?the?above?scenario,?answer?the?following?questions:
What?effects?would?joining?a?MCO?have?on?your?clinic?regarding?staffing,?patient?volume,?and?financial
stability?
What?policies?and?procedures?should?be?used?by?the?MCOs?to?reduce?costs?for?their?clientele?
Discuss?the?ethical?issues?or?concerns?about?MCOs?providing?a?lower?quality?of?care?compared?to?traditional?feefor?service
(FFS)?organizations?
What?are?some?of?the?questions?you?would?ask?each?representative?about?his?or?her?company’s?specific?plan?that
will?help?you?make?a?decision?
Do?you?believe?that?the?evolution?of?MCOs?and?consumer?driven?health?plans?(CDHPs)?has?affected?the
healthcare?environment?today?by?integrating?the?financing?and?delivery?of?healthcare?services??If?yes,?how?
How?have?the?roles?and?relationships?between?physicians?and?patients?changed?by?each?of?these?types?of?plans?
Reading?For?Assignment
Cost?Containment?in?Managed?Care
Payment?systems?based?on?resource?use?have?been?designed?and?implemented?for?other?providers?of?care.?One
example?is?the?resource?utilization?groups?(RUGs),?which?is?a?classification?system?for?nursing?home?residents
commonly?based?upon?functional?assessment?coupled?with?projected?resource?utilization.?Other?resource?based
payment?systems?include?home?health?resource?groups?(HHRGs),?which?are?prospective?payment?systems
(PPSs)?for?home?healthcare.?However,?the?most?recent?and?perhaps?most?controversial?cost?containment?effort
has?been?the?introduction?of?managed?care.
In?economic?terms,?managed?care?is?an?attempt?to?make?medical?care?delivery?more?efficient?through?efforts?to
both?the?reduce?cost?of?providing?healthcare?services?and?improve?the?overall?quality?of?care.?Managed?care
attempts?to?eliminate?the?inefficiencies?characterizing?the?system?by?favorably?affecting?the?price?of?the?services,
the?site?at?which?services?are?received,?and?the?utilization?of?services.
Two?sources?of?inefficiency?managed?care?tries?to?address?are?economic.
Moral?hazard:?As?we?have?seen,?people?change?their?behavior?when?they?have?insurance?and?may?demand
services?that?are?of?little,?if?any,?benefit?except?to?ease?their?minds.
Demand?inducement:?Because?patients?usually?trust?their?physicians?and?do?not?question?their?recommendations,
physicians?may?abuse?their?role?as?the?patients’?agent?for?their?own?financial?gain?by?making?treatment
recommendations?that?are?not?in?the?best?interest?of?the?patient.?In?fact,?most?(but?not?all)?physicians?are?patient
centered?and?do?not?take?advantage?of?the?system.?Nevertheless,?many?physicians?tend?to?overprescribe
diagnostic?tests?and?visits?in?order?to?protect?against?malpractice?actions.
Both?moral?hazard?and?demand?inducement?place?us?on?a?flat?of?the?curve?medical?system,?that?is,?the?point
where?more?care?is?of?no?additional?value?(and?in?some?instances,?harmful)?but?continues?to?add?to?the?cost.
Managed?care?arose?mainly?out?of?the?opportunity?for?competition?that?resulted?from?the?excess?capacity?in?the
system?(the?medical?technology?arms?race)?and?the?resulting?high?cost?of?services?due?to?underutilization.
Business?responded?to?this?by?looking?to?health?insurers?covering?their?employees?to?rein?in?health?insurance
costs?and?subsequently?bring?the?year?to?year?increases?in?premiums?under?some?control.
Managed?care?attempts?to?eliminate?unnecessary?and?inappropriate?care?and?have?patients?use?less?costly?settings
and?providers?without?reducing?quality.?To?accomplish?this,?managed?care?transformed?passive?health?insurers,
which?reimbursed?providers?on?a?cost?or?cost?plus?basis?into?organizations?seeking?to?control?costs?and?affect
quality.
You?previously?learned?that?there?was?excess?capacity?in?hospitals?due?to?the?effects?of?the?utilization?of?hospital
services?brought?on?by?Medicare’s?PPS.?These?reductions?in?service?utilization?were?due?in?large?part?to?a
reduction?in?hospital?length?of?stay?and?shift?to?outpatient?services,?including?the?development?and?expansion?of
ambulatory?surgery.?Managed?care?organizations?(MCOs)?took?advantage?of?excess?provider?capacity?to?bring
costs?down?by,?for?example,?negotiating?discounted?care?in?exchange?for?having?the?provider?be?part?of?the
MCOs?preferred?network?of?providers.?What?does?this?mean?