Managed health care plans are a type of health insurance systems that are designed to help reduce the health cost of the patients. Within this health care plan, there are several techniques that are incorporated to help reduce the cost of providing quality health care services for the patients. This managed care or managed health care is usually used mainly by certain company or organizations to help provide cheaper and quality health care to their enrollees. This is because it has been found out that there are several ways in which unnecessary health care costs are usually incurred. Hence there is a need to ensure such health care costs are either eliminated or reduced.
There are types of managed care plans. They are the Health maintenance organizations (HMO), Preferred provider organization (PPO) and point of service (POS). HMOs are involved in the payment of costs within the network while PPO pays more if you get care within the network but can still pay part of the cost if you received the treatment outside the network. POS allows you to select either of the HMO or PPO whenever you need a health care.
Managed care is with different forms of reimbursement. The hospital reimbursement is guided by the hospital itself while the provider reimbursement relates to the payment made by the health insurance company. These two types of reimbursement done for the health care received by the patient have changed over time. Several factors have influenced the changes that are noted in recent times. Several market forces acting on these two systems of reimbursement are economic and patient dependent. The economic aspects are related to the hospital views and plans, increasing health care costs, government policies, and employer’s perspective. Majorities are working depending on profits hence non want to always work as a looser.
Economic influence will be the strongest market influence that will be the determinant of the type of reimbursement that will be selected. This will be related to what the employer or the patient is being derived from the managed care system especially in terms of the economic benefits.
Taking a deeper look into the two types of reimbursement, the major differences relate to the offers presented by each. The provider point of view allows the patient or the beneficiary to have treatment within the network or outside the network while from the hospital perspective, the patient can only have the reimbursement when treatment is only received within the hospital or network. Hospital payment method can't reimburse treatment received from other hospitals. These are the major differences between the two major reimbursement techniques or methodologies.
There are several merits and demerits associated with the two payment methodologies especially when it is being reviewed from the provider and the hospital point of view. The fact that from the recent times, the financial pressure caused by rising costs that most hospitals are undergoing, influenced their view and decision on what to reimburse through. As a result of this, some employees now decided to choose the hospital type of reimbursement which has both merits and demerits in terms of the fact that it might help the employee reduce the cost but this will somewhat affect the expenditure of the hospital in terms of increasing it.
The hospitals focusing on this type of reimbursement are trying to increase their market power which can also be considered as a revenue enhancing strategy for the hospital (Devers et al, 2003). This serves as a point of demerits for both the private and public payer. The merit relating to the provider's type of reimbursement is that which is linked with the fact that there are several forms of benefits that patients or employees get to receive from the providers. This can be related to the fact that this is used as one important provision which is even higher than what the Medicaid requires (Robert, 2012). Other merits relate to the fact that there are fee-for-service frameworks and improve access to care.
Pay for performance program is one new system of reimbursement under the Patient Protection and Affordable Care Act of 2010 (Nix, 2013). This new strategy for reimbursement has been linked to the placement of financial pressure on the medical provider. This will be done based on the performance being evaluated with the use of metrics based on adherence especially to certain processes and scores received on patient satisfaction surveys or patient outcomes. If this is used as the factor that will determine the reimbursement methodologies, there is likelihood of false reimbursement especially in terms of judging patient outcome on patient survey. We need to understand the fact that we all have our preferences and if this influences the reimbursement method, it will affect the judgment and correct grading.
References
Devers et al (2003). Hospitals Negotiating Leverage with Health Plans: How and Why Has It Changed? Health Services Research.
Retrieved 23 November, from http://www.ncbi.nlm.nih.gov/pmc/articles/PMC1360893/
Nix, K. (2013). What Obamacare’s Pay-For-Performance Programs Mean for Health Care Quality
Retrieved 24, November, from http://www.heritage.org/research/reports/2013/11/what-obamacares-pay-for-performance-programs-mean-for-health-care-quality
Robert, B. (2012). Benefits and Challenges of Medicaid managed care. Pharma and healthcare.
Retrieved 23 November, from http://www.forbes.com/sites/aroy/2012/10/18/benefits-and-challenges-of-medicaid-managed-care/
Preeze, L. (2013). Challenging managed care decisions. Personal finances.
Retrieved 23 November, from http://www.iol.co.za/business/personal-finance/challenging-managed-care-decisions-1.1609289#.UpIqqMSsiSo
