Benefits and risks associated with managed care.pdf

Using bonuses and or financial motivation to

Info icon This preview shows pages 10–12. Sign up to view the full content.

- Using bonuses and/ or financial motivation to stimulate the insured to choose providers within their networks. - Bonuses and/or financial motivation for the insured who maintain a healthy lifestyle and make use of preventive care (e.g. motivational plans based on bonuses for desired behavior such as exercise, buying healthy foods, meeting appropriate goals, safe driving). Among the best developed motivational programs is T he Discovery Group’s Vitality program in South Africa. 5. Rationale for introducing managed care Within the insurer provider patient triangle, insurers have the most obvious interest in introducing managed care, as they cover the majority of healthcare costs. They are thus naturally motivated to keep their costs down and, in a healthy competitive environment, also to spend efficiently. Indirectly, this may also be in the interest of the providers, if for example, lower costs translated into bonuses. Patients may also be interested in lowering costs. However, there are two obstacles to patient motivation: 1. If additional fees for treatments are low or non-existent and the insurance fee is fixed and regulated (as is the case in Slovakia), patients are not motivated to lower the costs of treatment. 2. If patients are interested in lowering costs, they will most likely lack information on the need for, structure and the price of the offered treatment (there is typically an informational imbalance to the disadvantage of patients, providers and insurers generally have more information). Patients, on the other hand, have an obvious interest in raising the quality of the care they receive. As long as there is competition in the insurance market, insurers are also keen on maintaining a high level of quality. Providers will be motivated to provide high quality services, if competition in the provider market is functional and the informational imbalance is low. States use a wide variety of measures to regulate these relations. They may regulate health care quality standards, patient fees, supervise the quality of provided services, define minimum standards of provider networks, directly own providers or regulate prices of services. Generally, the state ’s ultimate goal in health care is to provide the broadest possible access to quality services, while keeping the state’s limited resources in mind. However, in a non-transparent environment this goal may be hindered by corruption or conflicts of interest, especially if the state finds itself both in the role of a regulator and an owner of insurance companies and health care providers. But the state-funded Medicaid program in the United States and the British NHS system show that regulation and managed care need not be mutually exclusive.
Image of page 10

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

11 6. The benefits and risks of managed care Benefits of managed care include: 1. Managed care may increase the efficiency of provided healthcare: it may secure the same extent and quality of healthcare for less money or more health care of better quality for the same money. This may be achieved by making providers and the
Image of page 11
Image of page 12
This is the end of the preview. Sign up to access the rest of the document.
  • Spring '16
  • Health Maintenance Organizations

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern