The Challenge Facing Managed Care Organizations

The greatest ch tout ensembleenge for do itd caution brass sections (MCOs) in our sure time is how to nurse lower priced medical fees. As we only know, American wellness alimony should funda amiablely be a nonprofit enterprise. However, the privatization of American health c atomic number 18 holds that health pull off in common and infirmarys in feature argon increasingly operating on a for-profit basis. In event, the for-profit hospital empyrean has accounted for a relatively constant bundle (about 15 percent) of hospital beds over the die hard twenty years (Morrisson, 1999).This is why tardily the U.S. Congress tries to push to a greater extent consumer-directed health plan options to avoid cash-strapped managed get by organizations (MCOs) to tramp their deductibles, raise agiotages and even defy national law by authorizing policy holders to sully prescription drug drugs from low- personify vendors in Canada (Smith, 23 September 2004).Managed negociate organiza tions (MCOs) often carry the traditional fee-for-service models, which do not put forward adequate financial reserves and utilization incentives for physicians and hospitals to mark off the costs of providing health lot. Under managed care, the expects of the diligents are balanced with efforts to provide cost-effective care. Typically, MCOs scratch subscribers by promising to provide all necessary medical care in exchange for a fixed monthly premium.The MCO similarly sires with hospitals, physicians, and dispel healthcare providers to deal the necessary medical care to its enrollees at a discounted reimbursement rate. In exchange for accept reduced fees, the caregivers gain access to the MCOs enrolees (Kirby, Sebastian & Hornberger, 1998).A problem with managed care is that employers who broaden a health maintenance organization (health maintenance organization) to their employees often pay the premium as long as the health maintenance organization premium was not hig her than the fee-for-service premium. This behavior by employers creates distorted incentives for the HMO in irresponsible its costs. Enthoven (1993) suggested that this incentive distortion can be corrected when employers design better choices for their employer contributions.The employer could stand a fixed-dollar amount for health policy with the employee paying the full digression in the midst of plans. The greater the portion of the marginal premium paid by the employees is, the stronger the incentive is to conduct lower-cost plans. For example, if the employer pays 80 percent of the premium and the employee pays the remainder, whence the employee pays only 20 percent of the difference between the low (lets feign here) HMO premium and the higher fee-for-service premium.HMOs and other managed care ar effigyments are organized on a prepayment basis that appear in a wide variety of forms. An HMO could hire physicians on a salary, contract with a preexisting group get along of physicians, or contract with physicians who maintain a fee-for-service practice. According to Luft (1991), Beca social function specific social, legal, historical, political, and economic aspects of the medical care environment overhear molded words systems much(prenominal) as the HMO, it is not reasonable to expect that the typical HMO could be transplanted intact to another terra firma (p. 173).The key to HMO cost savings is the organizations wide range of medical run, both yardbird and outpatient. In this counsel, the HMO can receive the cost savings implied by reduced hospital intention. This may be difficult to manage in systems where there are separate financing mechanisms for unproblematic care physicians and inpatient care. As Luft (1991, p. 180) remarks. If there were no way to shift funds from the hospital look to the physician side, it would be difficult to recompense clinical decision makers for the development of more cost-effective practice styles.This i s why trine areas appear to vortex a order of opportunities where MCOs can assist patients, these are ambulant care, psychological health and the choice therapies. Firstly, ambulatory care- dainty conditions reflect the quality and availability of uncreated care services, since they are readily treatable without the need for hospitalization insurance. There are differences in the hospitalization rate for ambulatory care sensitive conditions. Shenkman et al. (2005) had indicated that military posture ambulatory care is grave for legion(predicate) children with chronic conditions.However, access to such care may be constrained within managed care environments. The use of primary care providers (PCPs) as gatekeepers for managed care organizations (MCOs) is unmatched commonly used strategy to control specialty care use. Studies of the impact of gatekeeping on childrens receipt of specialty care extradite resulted in mixed findings. Some studies make up more specialty car e use in gatekeeping MCOs, compared with non-gatekeeping MCOs.Other researchers found that the stand-in of a gatekeeping system with an open-access model change magnitude specialty visits among a group of children with chronic conditions. Although the instruction on gatekeeping in general yields some important information, MCOs use many other strategies concomitantly with their PCP gatekeepers, such as capitated payments, financial incentives, and prior authorization procedures. The use of these concomitant strategies may meet the erratic needs of children with chronic conditions, including their need for specialty physician care.On the other hand, managed care had been significant contributor on delivery systems for mental health services. Taylor et al. (2001) had indicated that direct and confirming persuasion to provide more cost-effective discourses has been one consequence. The cost-saving qualities and the effectiveness of group interventions mystify produced clear expe ctations for an addd use of therapy groups. In the research of Taylor et al. (2001), they compared perceptions and uses of group interpositions on a national sample of managed care organizations and mental health providers.Implications of differences and similarities between directors of managed care organizations and treatment providers are examined and discussed across five reaction categories (familiarity/training perceived effectiveness, likelihood of reimbursement/referral, daily use and expectation for future use). Taylor et al (2001) favored the approach where MCOs calibrate treatment referral/reimbursement decisions. Recently published comparison import studies and meta-analyses can and should empirically guide the gravel treatment delivering systems.Lastly, many managed care organizations get down already begun to integrate complementary and alternative medical therapies (CAM) with conventional medical providers. health check practitioners are obligated to assess CAM therapy with patients. resource therapies require sea captains to rethink staff competency, patient assessment, and patient-focused care. Medical leaders must see to it CAM trends and therapies to better integrate these concepts into health care policy, standards of care, and ethical decisions (Parkman, 2001).Among ambulatory care and mental health care, alternative therapies, or CAM, offers the nigh favorable and cost-efficient strategy for MCOs. This is because the maturation baby boom generation is first gear to experience chronic but non-life leaden conditions, such as joint pain, headaches and menopause-related complaints and they are willing to explore options other than prescription drugs. For health plans, the attraction of offering alternative care products lies in retaining and attracting new members, diversifying their services from competitors in a congested managed care market and in attempts to address current or proposed state mandates (West, 1997).In 1997 alo ne, expenses for professional services were $21.2 billion, a 45% increase over the earlier 1990 data. Expenses for professional services, herbals, vitamins, aliment products, books, and classes totaled $27 billion. Five surveys conducted since 1990 have reported frequent use of CAM, ranging from 30% to 73% by patients suffering from conditions such as cardiovascular disease, cancer, arthritis, HIV and AIDS, seven-fold sclerosis, and chronic musculoskeletal pain.Furthermore, the demand for CAM by the general public is increasing, despite the fact that its use is largely paid by consumers without coverage by third-party payers. In 1997, Americans worn-out(a) an estimated $13 billion for visits to CAM providers and an additional $2 billion for commercial diet supplements and otc megavitamins (Pelletier & Astin, 2002).Managed care should not only focus on cost savings, but they should also look into diversifying their services. MCOs have generally contributed to the pooh-pooh in th e U.S. health cost offset rate. Their potential will continue to be limited to the extent that employers fail to offer true financial advantages to consumers who choose the low-cost health plans. Thus, more reforms in the policies should be reviewed and revised so that more race could benefit from the quality health care everyone deserves.ReferencesEnthoven, A.C. (1993). The History and Principles of Managed Competition. wellness Affairs, supplement, 24-48.Kirby, E.G., Sebastian, J.G. and Hornberger, K.D. (1998, Jan/Feb). The Effect of normative Social forces on Managed negociate Organizations Implications for strategical management/Practitioner Response. Journal of healthcare Management. 43(1)81-106.Luft, H. (1991). Translating the U.S. HMO Experience to Other wellness System. health Affairs 10172-186.Morrison, I. (1999). wellness tutelage in the New Millennium. NY lav Wiley & Sons, Inc.Parkman, C. (2001, February). Alternative Therapies Are Here to Stay. treat Management , 32(2) 36-40.Pelletier, K.R. and Astin, J.A. (2002, Jan/Feb). Integration and Reimbursement of Complementary and Alternative practice of medicine by Managed Care and Insurance Providers 2000 update and Cohort Analysis. Alternative Therapies in Health and Medicine, 8(1) 38-44.Shenkman, E., Tian, L. and Schatz, D. (2005, June). Managed Care Organization Characteristics and Outpatient Specialty Care Use Among Children With Chronic Illness. Pediatrics, 115(6) 1547-1555.Smith, C. (2004, Spetember 23). Senate Panel Examines Health Care Choices, Insurance Costs. Knight Ridder Tribune.Taylor, N.T., Burlingame, G.M., Kristensen, K.B., Fuhriman, A. et al. (2001, April). A Survey of Mental Health Care Providers and Managed Care Organization Attitudes Toward, Familiarity With, and Use of group Interventions. International Journal of Group Psychotherapy, 51(2) 243-264.West, D. (1997, November 10). MCOs combine Alternative Care. National Underwriter, 101(45) 58.