The Challenge Facing Managed Care Organizations

The greatest challenge for managed bid brass sections (MCOs) in our stream time is how to obtain lower priced medical fees. As we all know, American wellness dole out should essentially be a nonprofit enterprise. However, the privatization of American health take holds that health c ar in general and hospitals in particular are increasingly operating on a for-profit basis. In fact, the for-profit hospital sector has accounted for a relatively constant share (about 15 percentage) of hospital beds over the last twenty years (Morrisson, 1999).This is why latterly the U.S. Congress tries to push much consumer-directed health plan options to avoid cash-strapped managed care cheeks (MCOs) to boost their deductibles, raise premiums and even defy federal law by authorizing policy holders to buy prescription drugs from cheap vendors in Canada (Smith, 23 kinsfolk 2004).Managed care organizations (MCOs) often apply the traditional fee-for-service models, which do not bring home the bacon adequate financial controls and utilization incentives for physicians and hospitals to contain the costs of providing healthcare. Under managed care, the needfully of the forbearings are balanced with efforts to provide cost-effective care. Typically, MCOs enroll subscribers by hopeful to provide all necessary medical care in veer for a fixed monthly premium.The MCO also contracts with hospitals, physicians, and early(a)(a) healthcare providers to dispense the necessary medical care to its enrollees at a discounted reimbursement rate. In turn for accepting cut back fees, the caregivers gain access to the MCOs enrolees (Kirby, Sebastian & adenylic acid Hornberger, 1998).A problem with managed care is that employers who commotion a health maintenance organization (health maintenance organization) to their employees often pay the premium as long as the health maintenance organization premium was not higher than the fee-for-service premium. This behavior by employers c reates distorted incentives for the HMO in controlling its costs. Enthoven (1993) suggested that this incentive distortion can be reverse when employers design better choices for their employer contri only ifions.The employer could contribute a fixed-dollar amount for health amends with the employee paying the full difference amidst plans. The greater the portion of the bare(a) premium salaried by the employees is, the stronger the incentive is to choose lower-cost plans. For example, if the employer pays 80 percent of the premium and the employee pays the remainder, then the employee pays only 20 percent of the difference between the low (lets presume here) HMO premium and the higher fee-for-service premium.HMOs and other managed care arrangements are organized on a prepayment basis that face in a wide variety of forms. An HMO could hire physicians on a salary, contract with a preexisting assembly practice of physicians, or contract with physicians who maintain a fee-for-ser vice practice. According to Luft (1991), Beca part specific social, legal, historical, political, and economic aspects of the medical care environment have shaped delivery systems such as the HMO, it is not reasonable to expect that the typical HMO could be transplanted constitutional to another country (p. 173).The key to HMO cost savings is the organizations wide range of medical services, both inpatient and outpatient. In this way, the HMO can receive the cost savings implied by reduced hospital use. This may be difficult to manage in systems where in that respect are separate financing mechanisms for old care physicians and inpatient care. As Luft (1991, p. 180) remarks. If there were no way to shift funds from the hospital side of meat to the physician side, it would be difficult to reward clinical decision makers for the festering of to a greater extent cost-effective practice styles.This is why three areas appear to offer a magnitude of opportunities where MCOs can assis t patients, these are ambulatory care, mental health and the alternative therapies. Firstly, ambulatory care-sensitive conditions reflect the quality and availability of immemorial care services, since they are readily treatable without the need for hospitalization. There are differences in the hospitalization rate for ambulatory care sensitive conditions. Shenkman et al. (2005) had indicated that specialization ambulatory care is definitive for many 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 angiotensin-converting enzyme commonly used outline to control specialty care use. Studies of the impact of gatekeeping on childrens receipt of specialty care have resulted in mixed findings. Some studies found more specialty care use in gatekeeping MCOs, compared with non-gatekeeping MCOs.Other researchers found that the replenishment of a gatekeeping system with an open-access model increased specialty visits among a group of children with chronic conditions. Although the focus 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 unequaled 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 indirect persuasion to provide more cost-effective handlings has been one consequence. The cost-saving qualities and the effectiveness of group interventions have produced clear expectations for an increased use of therapy groups. In the research of Taylor et al. (2001), they compared percept ions and uses of group treatments 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 crosswise five response 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 outcome studies and meta-analyses can and should empirically take to the woods the present treatment delivering systems.Lastly, many managed care organizations have already begun to blend complementary and alternative medical therapies (CAM) with conventional medical providers. Medical practitioners are obligated to assess CAM therapy with patients. Alternative therapies require master copys to rethink staff competency, patient assess ment, and patient-focused care. Medical leaders must understand 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 most favorable and cost-efficient strategy for MCOs. This is because the aging fluff boom generation is beginning to experience chronic but non-life morose 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 mart and in attempts to address current or proposed state mandates (West, 1997).In 1997 alone, expenses for victor services were $21.2 billion, a 45% increase over the earlier 1990 data. Expenses for profess ional services, herbals, vitamins, diet products, books, and classes totaled $27 billion. Five surveys conducted since 1990 have reported snitch use of CAM, ranging from 30% to 73% by patients suffering from conditions such as cardiovascular disease, cancer, arthritis, HIV and AIDS, multiple 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 spent an estimated $13 billion for visits to CAM providers and an additional $2 billion for commercial diet supplements and over-the-counter 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 decline in the U.S. health cost growth rate. Their potential will continue to be express mail 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 people could benefit from the quality health care everyone deserves.ReferencesEnthoven, A.C. (1993). The History and Principles of Managed Competition. health Affairs, supplement, 24-48.Kirby, E.G., Sebastian, J.G. and Hornberger, K.D. (1998, Jan/Feb). 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