Benefits and risks associated with managed care.pdf

Individual managed care systems around the world vary

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Individual managed care systems around the world vary by the goods and services provided as well as by the difficulty of obtaining services outside the contractual network. Older systems typically allow the insured to seek outstanding services only when referred by their general practitioner or if they pay extra. Newer systems seek to motivate patients stay within their network by awarding benefits if they do. If the insured venture outside their network, they lose benefits, points needed to obtain them, etc. A guaranteed status quo for the insured is also common, meaning entering a managed care system may only bring advantages, no penalizations occur.
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5 Managed care as a system is an alternative to uncoordinated health care delivery. Here the insured freely choose and alternate their providers. No system of integrated services aimed at providing the best quality at the lowest cost possible is in place. In other words, patients’ choice of providers is unlimited. Providers decide on (or recommend) treatment, with neither them nor their patients bearing financial risks or answering to incentives associated with the choice. Fundamental characteristics of managed care include the following: 1. Providers work in groups, ranging from associations of independent providers to individual companies employing practitioners. Group members share clinical and financial risks. 2. Providers are paid based on “capitation” contracts with insurers or the insured. Providers regularly receive a fixed sum per insured regardless of the volume of services she is provided. In an alternative model a provider is compensated directly for delivered services (fee-for-service payments). By paying providers fixed sums, managed care discourages them from carrying out unnecessary procedures to inflate costs and revenue. 3. Providers actively participate in managing health care alongside insurers and the insured, they share the costs as well as the associated risks. Providers decide on most suitable treatments. However, when diverging from recommended procedures, providers should be able to justify their decisions. 4. Modern managed care programs use motivational means such as awarding points to reward desired und discourage unwanted behavior in the insured (for example the insured may gain certain benefits in exchange for points they earned). Similar motivational means may be used in relation to providers. 3. Managed care origins and rationale Managed care formally originated in 1973 in the USA with the signing of a law allowing the creation of HMOs (health maintenance organizations). HMOs are both for-profit and non- profit insurers that finance healthcare for their insured from selected providers based on pre-defined rules. This signaled a shift from traditional, generally non-profit healthcare financing (e.g. fee-for-service plans or indemnity plans). In traditional systems patients had an unlimited selection of providers. They had not agreed on specific rules with their insurers
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  • Spring '16
  • Health Maintenance Organizations

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