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lecture 4 (2) - limit excessive use of medical services Yet...

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Managed care Photo by: Yuri Arcurs Definition Managed care is a generic term for various health care payment systems that attempt to contain costs by controlling the type and level of services provided. Health maintenance organization (HMO) is a term that is often used synonymously with managed care, but HMOs are actually a particular type of managed care organization. Purpose Health care reform has been an increasingly urgent concern in the United States over the past 40 years. Until recently, the primary source of health care coverage was indemnity insurance, which pays or reimburses the cost of medical services in the event of a person's illness or injury. Indemnity insurance gives health care providers few reasons to use less expensive forms of treatment— the insurance companies generally pay for any treatment deemed necessary by a physician. Presumably, this type of system encourages providers to overuse expensive, unnecessary treatments and diagnostic procedures. Patient co-pays and deductibles attempt to
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Unformatted text preview: limit excessive use of medical services. Yet costs continue to rise, resulting in insurance companies' frequently raising premium prices. The primary intent of managed care is to reduce health care costs. Emphasis is placed on preventive care and early intervention , rather than care provided after an illness or injury has occurred. The responsibility of limiting services is placed on the service provider rather than the consumer. This limitation is achieved by (a) "gatekeeper" policies that require individuals to get referrals for specialized treatment from their primary physicians;(b) financial incentives (either bonuses or withholding money) for providers to restrict services and contain costs; (c) guidelines requiring adherence by providers at the cost of being dropped from the plan for noncompliance; (d) review of services by the managed care organization and denial of payment if services are considered unnecessary....
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