1973 Health Maintenance Act (Managed Care)
The Health Maintenance Act (Managed Care) of 1973 is an act the focuses on the Health Maintenance Organization, where in back then this act used to reflect the concept of fee for service system, on which the health care providers will be rewarded for providing more health care services rather than for providing the suitable health services which were complemented with wrong incentives (Kongstevdt 2007).
The revolution for the healthcare delivery increase quickly, particularly in closely populated geographic locations following the introduction of the 1973 Health Maintenance Organization. The dominant type of health insurance was the ‘indemnity insurance’ in 1960s until the 1980s. The indemnity insurance covers the 20 percent of the billed charges of a person after satisfaction of the deductible every year. The corporation for the indemnity insurance paid out the 80 percent of the collective insurance premiums accumulated on behalf of the qualified members of the insurance group. The remaining 20 percent of the coinsurance paid through the individual spread of the business risk between the insurer and the members. Thus, the implementation of the 1973 Health Maintenance Acton which the managed care became the alternative in most of the cities in the United States by mid until the late 1980s. This act or the managed care became the revolutionary stage beyond the indemnity insurance that created the share of the financial risk; this act has surpassed the previous insurance because it needed providers of healthcare such as the hospitals, pharmacies, physicians, and other entities to accept and share of the financial risk. Furthermore, it incorporates the health care providers’ communication, the benefits that were covered are much more explicit, and it introduces programs about prevention and wellness (Navarro et al 2009).
The advantage of this act is that the health providers are willing to accept the financial risk that are inside the network of the HMO, however the disadvantage is that it restricts the members to seek alternatives or other health care providers without the referral of the physician. Also if the members did seek physician outside the network then the insurance is not covered by it.
References Page
Kongstvedt, P.R. (2007). Essentials of Managed Health Care.Massachusetts: Jones & Barlett
Learning
Navarro, R. & Cahill, J. (2009).Role of Managed Care in the U.S. Healthcare System.
Massachusetts: Jones &Barlett Learning
