Managed Care and Medical Reform
Answer in paragraph format, using APA guidelines (double spaces, one inch margins, Times New Roman, font 12, etc, title page) Page limit is 5 pages, excluding title or reference pages. You can use headings for each questions, but you must answer in complete sentences, not phrases or one word.
1. Define each of the following terms (used regularly by major 3rd party payers). Include in your definition how they are supposed to affect providers incentives, fees and overall utilization
(a) Fee-for-services
(b) Assignment
(c) Capitation
(d) Risk sharing
2. What are the primary cost saving features of managed care?
3. In theory, how is managed care expected to affect patient and provider
incentives ?
4. What is an Accountable Care Organization (ACO) and why does the Affordable Care Act encourage their development?
5. Identify and briefly describe each of the 4 types (plans) of managed care organizations.
6. How many Americans are satisfied and how many believe the system is in crisis? Based on your textbook about Americans wanting change, discuss whether the system should be replaced by a government system.
7. Explain what is meant by the statement –‘the rationing of health care in the United State is already being done’.
8. Much can be done at the state level to improve medical care delivery without federal legislation. Your text details the plans for 3 states- Hawaii, Oregon, and Massachusetts. Select the one you believe will be the most effective and explain why.
9. What is a mandate?
10. Describe the following US policy alternatives for providing health care:
A. Single Payer National Health Insurance
B. Employer-Based Health Insurance
C. Managed Competition
We can use the textbook as a reference. The textbook ISBN-13:978-1-337-10675-7
Henderson, J.(2018). Health economics and policy.(7th ed.).Stamford, CT: Cengage Learning.
Healthcare Economics Study Guide
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Healthcare Economics Study Guide
Introduction
Define each of the following terms
Fee-for-services
It is a traditional payment method where services are unbundled and providers bill for each service provided. It offers no incentives for healthcare providers to search for more effective methods of production (Kongstvedt, 2016). Additionally, it provides no incentives so that patients can find lower-priced providers.
Assignment
Assignment is a term used when a physician agrees to be paid a certain amount of fee for services offered. For instance, it might provide physicians with a guaranteed payment of 80% of the allowable fee (Kongstvedt, 2016). By accepting an assignment, the physician agrees to receive the allowable fee as full payment. Providers who agree to work under assignment agreement will forgo the practice of balance billing, which happens when providers bill the patient for the difference between their usual charge and the maximum allowed by the patient’s health plan.
Capitation
Capitation is a fixed amount of money per patient per unit of time paid in advance to the physician for the delivery of health care services. Capitation payments are used by managed care organizations to control healthcare costs. Capitation rates are often developed based on local costs and average utilization of services, therefore, they can vary from one region to another (Barber et al., 2019). It usually allows healthcare providers to treat a particular population for a specific amount of sum paid in advance, regardless of the nature or number of services provided to individual persons.
Risk sharing
Risk sharing is a method of reimbursement whose main aim is to control costs. It can be defined as any compensation arrangement between an organization and an insurance plan, under which both the organization and the plan share a risk of the potential for financial loss or gain over five percent of the organization’s annual capitation revenue (Barber et al., 2019). Risk Sharing arrangement reduces overutilization of services to manage the cost of care. It also provides strong incentives to physicians to improve care.
The primary cost-saving features of managed care?
Managed Care organizations control access to specialized care. They also eliminate unnecessary services to manage the costs of healthcare. It integrates health care delivery and payment systems through prepaid member fees (Kongstvedt, 2016). It provides fixed rates for providers. Some of the Cost saving features of managed care organizations include pre-authorization, utilization review, use of primary physicians, and quality improvement programs that hold providers financially accountable for cost control. Managed Care organizations are a group of physicians, specialists, and hospitals coordinating with each other to provide affordable care. These systems control the patient’s access to doctors, specialists, laboratories, and treatment facilities (Kongstvedt, 2016). In this system, the medical clinics receive the same amount of money regardless of how frequently patients see the doctor.
How is managed care expected to affect patient and provider incentives?
Incentives often direct patients to the most cost-effective procedure and provider. The primary aim of managed care is to keep the cost of healthcare as low as possible without compromising the quality of care provided (Barber et al., 2019). This is normally done by creating a network of providers that can offer care and referrals whenever there is a health need, that needs to be addressed. Through financial incentives to providers, and by actively managing care and some insurers, managed care organizations may affect the process, cost, and outcomes of care for plan enrollees.
What is an Accountable Care Organization (ACO) and why does the Affordable Care Act encourage their development?
A managed care organization (MCO) is a healthcare plan or a health care company that focuses on managed care as a model to limit costs while keeping high the quality of care. A good example of a managed care organization is an HMO (Health Maintenance Organization) (Kongstvedt, 2016). individuals enrolled in managed care are limited to seeing providers in a small local network, which also helps keep costs low. Affordable Care Act encourages MCOs to increase access to quality healthcare services.
Each of the 4 types (plans) of managed care organizations
The four types of managed care organizations include Health maintenance organizations (HMOs), Preferred provider organizations (PPOs), Point-of-service (POS) plans, and exclusive provider organizations (EPO). PPOs serve as an intermediary between the purchase of medical care and the provider (Barber et al., 2019). These organizations have arrangements to accept lower fees from the insurance company. Therefore, enrollees’ cost-sharing should be less compared to when they go outside the network. HMO’s models include group, staff, network, or independent practice association.
POS allows patients to choose between an HMO or a PPO each time they need care. It is a type of plan where one pays less if they use doctors, hospitals, and other health care providers that belong to the plan’s network. POS plans require an individual to get a referral from their primary care doctor to see a specialist (Barber et al., 2019). PPOs serve as an intermediary between the purchaser of medical care and the provider. They have arrangements to accept lower fees from the insurance company. As a result, the patient’s cost-sharing should be less compared to when they go to an external network (Kongstvedt, 2016). Exclusive Provider Organization (EPO) is a managed care plan where services are covered only if one uses doctors, specialists, or hospitals in the plan’s network (except in an emergency).
Whether the system should be replaced by a government system
Managed care organizations should not be replaced by a government system. There are several challenges faced by government systems that managed care organizations would face. A government system would be inclusive, therefore, everyone would join managed care (Kongstvedt, 2016). Additionally, People would need free services when it is a government system, therefore, Managed care could lose its meaning.
What is meant by the statement – ‘the rationing of health care in the United State is already being done
The statement above means that the government of the United States through its initiatives refusing to pay for or puts limitations on certain procedures. The threat of rationing has long been one of the most powerful arguments leveled against proposals for expanded government control of the U.S. health care system (Barber et al., 2019). For instance, in managed care, Pre-authorization requirements prohibit paying for non-emergency health care if one does not get the health insurer’s permission before getting the care.
The plans for 3 states- Hawaii, Oregon, and Massachusetts. Select the one you believe will be the most effective and explain why
In Hawaii, most of the Medicaid services are delivered through MCO. There are five (5) MCO health plans such as AlohaCare, HMSA, Kaiser Permanente, ‘Ohana Health Plan, and United Healthcare Community Plan that provides medical and Long Term Services and Supports (LTSS) benefits. The Oregon Health Plan (OHP) provides health care coverage for Oregonians from all walks of life (Oregon.gov., 2021). This includes working families, children, pregnant women, single adults, and seniors. Massachusetts monitors quality in Mass Health MCOs through HEDIS measures and a state-developed beneficiary survey. The Oregon Health Plan (OHP) seems to be more effective because it does not discriminate, hence, provide care to everyone including working families.
What is a mandate?
A mandate is an order or authoritative action put forward by the government or any other authority. For instance, the government may mandate that MCOs provide low-cost or free care (Kongstvedt, 2016).
Describe the following
Single-Payer National Health Insurance
It is a non-profit system, whereby a single public or quasi-agency organizes health financing and is most likely funded through taxes. In particular, it is the government that normally funds coverage and everyone receives comprehensive coverage regardless of their ability to pay (Kongstvedt, 2016).
Employer-Based Health Insurance
It is the insurance that is purchased by employers for their employees and financed through an employer or joint employer-employee contributions. Employer health insurance premiums are tax-deductible (Barber et al., 2019).
Managed Competition
A theory of health care delivery services holds that the quality and efficiency of such services would improve if, in a market controlled by the federal government, independent groups had to compete for health care consumers. Other people may define it differently (Barber et al., 2019).
Reference
Barber, S. L., Lorenzoni, & Ong. (2019). Price setting and price regulation in health care: Lessons for advancing universal health coverage. World Health Organization.
Kongstvedt, P. R. (2016). Health insurance and managed care: What they are and how they work. JONES & BARTLETT LEARNING.
Oregon.gov. (2021). Oregon Health Plan: Health Coverage for Low-Income Oregonians. https://www.oregon.gov/oha/HSD/OHP/Pages/index.aspx