Introduction
Managed care refers to a kind of health insurance where people pay to a medical provider for access to health services whenever needed. The annual payment may be fixed if basic health services are to be offered. When secondary medical services are to be provided, the members of the managed care will be charged extra. The kind of services offered includes physician visits, access to prescription drugs, and emergency medical care. There are different kinds of managed care from which an individual can choose from.
The first is Health Maintenance Organizations (HMO). It provides basic medical cover for its members at low annual rates. It is the most affordable of the managed care plans available. It only pays for member’s medical bills if they were incurred on a physician inside the network. For a more inclusive plan, people can opt for the Point of service (POS) plan. This plan is more costly than the HMO. Members of the POS plan are free to seek medical services outside the network if they are granted referral by their in-network physician. The plan will cover some of the costs even if the physician is not in the network. The final plan is referred to as the Preferred Provider Organization (PPO). In this plan, members can seek medical services outside the network, and the Managed Care Organization will still meet some of their bills. This cost sharing reduces the burden on the policy holder.
Impact on hospitals, physicians, and other providers
The Patient Protection and Affordable Care Act (ACA), which was signed into law in 2010 aims at providing all Americans with healthcare by 2014. The Act brought about changes in the running of hospitals as it tried to improve access to medical services. Nonprofit hospitals are now required to conform to new standards if they wish to retain their nonprofit status. The hospitals are required to research on the health needs of the communities where they operate. They are also required to provide emergency medical services in a non-discriminatory manner. This will improve the access of medical services to members of all managed care plans.
The ACA also spread Medicare to smaller hospitals, which otherwise would not have had access to insurance capabilities. Members of managed care are now able to access their services at medical centers near them. This has brought about more coverage and penetration of medical insurance in the whole country.
The ACA has also provided rebates on drugs to managed care members. These discounts reduce the cost of purchasing medicine by the hospitals. It is the hope of the government that this will lead to cheaper services being offered by participating hospitals. Cheaper services will also lead to lower rates when an individual wishes to purchase a managed care plan.
The ACA has affected the ability for hospitals to provide uninsured people with health services. When hospitals have disposable incomes, they sometimes provide free health services to poor people such as the homeless. The introduction of the Affordable Care Act and the managed care services has affected this capability. The managed care offers little reimbursement for services offered by the hospitals. This will leave the health facilities nothing to spend on charity activities.
The ACA has provided provisions to physicians that both positively and negatively affect them. The main effect is that insurance companies cannot decline a prospective member of the plans due to age or a preexisting conditions. This means that physicians have reduced freedom in choosing their patients. They cannot turn down a patient as they will be paid fully for their services by the managed care organization.
The ACA requires physicians to provider preventive procedures to their patients. Mammograms and colonoscopies should be provided without charging a deductible. The physicians should also provide the elder patients with free preventive care. These will include scheduled wellness visits and personalized plans for prevention.
The ACA reduces complications for physicians in dealing with insurers. More and more information will be stored electronically. The physicians will be able to share medical information quickly. Billing will also be simple. This should significantly reduce the frustrations physicians feel when dealing with medical insurers.
The ACA provides bonuses to physicians under certain conditions. One is for generals surgeons operating in rural areas. These will be entitled to a 10% bonus on all services that they provide. Physicians will also be awarded a 10% bonus for providing primary care services for managed care members.
Private hospitals tend to be small practices run by few doctors. The ACA deals with this by allowing small private practices to band together and purchase medical insurance as a group. This will allow them to be on the same level as the public hospitals in the provision of managed care services. This kind of cooperation may lead to hospital consolidation as the providers join their practices into one huge organization. Private practices will also merge as they seek to fulfill the efficiency requirements of the ACA. The ACA requires hospitals to install computerized devices for record keeping, which may be out of range for small private hospitals. By joining together, they can utilize the economies of scale enjoyed by big public hospitals.
The ACA also puts restriction on both public and private providers on the amount they are allowed to charge citizens for access to both primary and secondary medical services. This will mean reduced income for providers especially the private ones. The private providers should learn how to operate efficiently if they are to remain competitive in the health sector. Public providers are able to provide a benchmark in this instance.
What changes have consumers had to make as they moved from traditional insurance to managed care plans
Under traditional insurance coverage, members had more freedom to choose their preferred physician and the quality of care received. Under managed care, the members are likely to be provided with a list of physicians that are in contract with the insurance provider. The quality of health care they receive will be determined by the amount they are willing to pay for their insurance plan. Managed care members have to adapt and learn to apply to obtain services from the physician nearest to them. Traditional insurance does not deliver care to the policy holder, unlike the managed care setup.
Under traditional insurance, the members had unlimited access to specialty physicians. This has changed with the introduction of the managed care. This is because the providers seek to reduce the costs of providing insurance. The policy holders are only allowed to seek specialist help if referred by their physicians.
Managed care members are often likely to overuse the insurance coverage provided to them. In traditional health insurance, the members could do this at will because the insurance provider had to pay a set rate for every medical service provided to their members. In managed care, the member will pay more if they seek services outside of the recommended physician. This has also led to the reduced costs of medical services in both hospitals and specialist physicians as they only perform necessary procedures on the patients they receive.
In traditional insurance, the members were able to seek treatment from any hospital. Under managed care, the members are only allowed to seek help outside the network if they are granted referral by their chosen physician. The only other time this is allowed is in emergency situations. This reduces the misusing of coverage on unnecessary procedures.
Under the managed care, providers of the plan collect data on the quality of provision of healthcare, costs and the utilization of the services. There is a possibility of privacy concerns on the policy holder’s part.
How has managed care plans impacted total health costs in America?
A provider panel is a network of physicians that are contracted by managed care providers. The members of a managed care plan choose their preferred physician from the provider panel. The providers provide limited options for their members when it comes to the source of their medical services. This reduces the cost of overall health care.
Insurance providers compete with each other. Since there are many managed care providers, there exists immense competition as each insurer tries to enroll more members than the rest. This has an effect on the rates of the different plans offered to the members. As the insurers fight to capture more customers, they lower the prices, thus leading to lower health costs in the entire country.
Insurance providers have also been known to select only the healthy enrollees in order to reduce the amount they spend on the healthcare. Managed care is aiming to reduce this trend. Cost sharing between the managed care providers allows insurers to provide services to even the chronically ill members at a lower cost.
Conclusion
There are several advantages of managed care that has helped it become so widespread among the American population. The first is that the members do not have to go around scouting for physicians to provider medical services to them. The insurance providers have experts who recommend the best providers for each patient’s unique needs. This saves a lot of time for their members.
Managed care reduces instances of moral hazard. Cheap medical services may sometimes lead to overusing by members. It does this by dissuading medical practitioners against performing unnecessary procedures on their patients. This has an effect of reducing medical costs for the entire population.
Members of the HMO do not have to provide claim forms whenever they want to see their doctors. Claim forms allow a patient to claim expenses from their insurance provider. The members are required to produce their insurance cards in order to receive medical services. This means that managed care offers convenient services to their members.
References
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Tobin, C. (n.d.). WHAT IS MANAGED HEALTH CARE? Retrieved from National Federation of The Blind: https://nfb.org/images/nfb/publications/vodold/mngdcare.htm
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