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Running head: MANAGED CARE IN THE U.S. HEALTHCARE SYSTEM1HCM 632 Unit 3 Individual ProjectManaged Care in the U.S. Healthcare SystemMonty YipColorado Technical University
MANAGED CARE IN THE U.S. HEALTHCARE SYSTEM 2Managed Care in the U.S. Healthcare SystemIt is no secret that U.S. health care system is facing unsurmountable pressure in regard to cost and quality of care to the needed patients. Traditional health care, also known as ‘Fee-for-service’ (FFS) model, is creating ample evidence where patients are not able to receive healthcare with reasonable cost. Very often with FFS model, with the lack of primary care as gate keeper, patients are directed to potentially unnecessary specialty care treatments. Hence the cost of heath care with FFS model exponentially grows. Managed care can be the answer provided physicians are satisfied with the payment structure and utilization management. Nevertheless, managed care organizations (MCOs) do impact the U.S. health care positively by managing all four aspects of the healthcare system: payment, delivery, insurance and finance. As far as payment to providers, there are three arrangements. One is capitation, which is usually being utilized with Health Maintenance Organizations (HMOs). HMOs acquire physicians in a few ways. HMOs employ physicians through staff model, group model, network model, as well as through independent practice association (IPA) model. Another payment arrangement to providers is through discounted fee payments. This arrangement is often used byPreferred Provider Organizations (PPOs). PPOs arrange discounts from 25% to 35% prior from contracting physicians. These arrangement negotiations are based on diagnosis-related groups (DRGs). The third method of payment is salaries with annual incentives. This arrangement is attractive to physicians and result in higher performance and quality measures. With MCOs arranging different types of payment to physicians, cost can be contained to a certain degree.(Shi, Singh, 2018)MCOs can impact the U.S. health care system positively through its delivery methods. Since MCOs operate the collectiveness of hospitals, outpatient care, as well as home care, they
MANAGED CARE IN THE U.S. HEALTHCARE SYSTEM 3can provide better access for patients. We can study this impact with a Medicaid Managed Care example.