Managed Care Reform Proposal

The American College of Emergency Physicians Foundation describes managed care as “an approach to providing health care that emphasizes wellness and preventive care and seeks to reduce costs by coordinating care through a primary care physician.” Shi and Singh, the authors of Delivering Health Care in America: A Systems Approach, believe that managed care will “remain its central feature” as the US health delivery system continue to undergo changes. Managed care has been a major influence on the delivery of healthcare since 1990. It aims to deliver services that are most appropriate and cost effective while making utilization management its top priority. However, due to its tight regulation and limitations, enrollees have less access to many health care services. Additionally, the difference in quality of care between beneficiaries of managed care and traditional fee-for-service is still in question today.

Although a survey done in New York concluded that enrollees of managed care have higher satisfaction with access and use of health care services compared to those with conventional Medicaid, the extreme odds were the greatest among managed care enrollees. Thus far, studies on quality of managed care have shown little or no significant difference between those enrolled in a managed care plan and those in traditional fee-for-service. With these two matters in mind along with cost, this reform will concentrate on providing individuals with improved access to medical and health care services without increasing cost and with relevant tools, such as quality report cards, to assist individuals choose a health care plan.

Even though managed care expenditures doubled from $27 billion to $61 billion in 2002 to 2007, the spending proportion of all Medicaid spending on services is low compared to about two-thirds of Medicaid beneficiaries. This suggests that many of the highest-cost Medicaid beneficiaries and services are in the fee-for-service sector. Between 1999 and 2008, the expansion of Medicaid beneficiaries in managed care has increased respectively from 51% to 71%. With the changes of this reform, we would imagine that the number of enrollment will rise as more states “now mandate or offer managed care for more complex Medicaid populations, including children and adults with disabilities and chronic illnesses, persons with HIV/AIDS, and ‘dual eligibles’.” Strict standards and procedures have been developed to monitor and assess quality and improvement of managed care and other health care programs. According to the Henry J. Kaiser Family Foundation, nearly 30 states reported that they offer quality report cards to help Medicaid enrollees choose a health plan and quality tend to be higher in provider-owned than other Medicaid dominated plans.

This reform proposal is more important than a competing proposal because it considers three important factors: cost, access and quality. Managed care has been very cost-efficient and will continue to be as access and quality will be improved. Some people may argue that other aspects such as technology or special population may be more important due to current trends and increasing demands of that specific area.

References

"Managed Care Q&A." About Emergencies. American College of Emergency Physicians Foundation, 2011. Web. 28 Feb 2011. http://www.emergencycareforyou.org/YourHealth/AboutEmergencies/Default.aspx?id=26094

"Medicaid and Managed Care: Key Data, Trends, and Issues." (2010) Henry J. Kaiser Family Foundation. Pp. 1-8. http://www.kff.org/medicaid/upload/8046.pdf

Miller, R.H., and H.S. Luft. "DoesManaged Care Lead To Better Or Worse Quality Of Care?" Health Affairs 16.5 (1997): 7-25. Web. 28 Feb 2011. http://content.healthaffairs.org/content/16/5/7.full.pdf+html.

Shi, L., & Singh, D. A. (2008). Delivering Health Care in America: A Systems Approach (4th ed., pp. 334-371). Sudbury, MA: Jones and Bartlett Publishers.

"What is managed health care?" Managed Health Care Plans. American Heart Association, 2011. Web. 28 Feb 2011. http://www.americanheart.org/presenter.jhtml?identifier=4663

Values and Overview of Managed Care

In trying to understand managed care, one has to realize that manage care is not a thing, as Haavi Morreim PhD professor of human values and ethics states “it (managed care) is just a whole lot of different efforts to bring rationality and a bit of fiscal conservation to our health care system.”

Managed care is an approach to delivering and financing health care that is aimed at both improving the quality of care and saving costs. A belief of managed care is that patients are able to receive a high standard quality of care even though there are limited amounts of primary care providers. A second belief of managed care includes limiting waste and abuse by adopting other methods besides a fee-for-service system. In a fee-for-service system providers can incur higher utilization cost by providing more services than are medically necessary. Finally managed care has belief in lowering cost through the use of capitation, discounted fees and salaries. In addition to the three beliefs, manage care as three fundamental values. Three values of managed care include but are not limited to improving quality and saving cost, improving access to care by use of coordinated management of patient’s conditions and finally a focus on primary care relying more heavily on prevention. To improve quality and ensure cost savings, care is rendered by the most appropriate provider and care is rendered in the most appropriate, least-restrictive setting. 

Now that we have discussed the three values and beliefs of managed care, we will talk about the development of managed care.

In essence, the development of managed care can be equated to current employer-sponsored private health insurance. In 1998, 27% of populations with employer sponsored health insurance were managed care, in 2003 the percentage increase to 95%. The types of managed care plans are net-work based manage care systems (or organizations). The three most common managed care organizations include: Health Maintenance Organizations (HMO), Preferred Provider Organizations (PPO) and Point-of-Service (POS) plans. Through these organizations, the health care system has been able to contain costs through choice restriction, gatekeeping, case management, disease management, utilization review, and practice profiling. Although no dollar amount can be reasonably obtained to show transparent cost savings, the savings are found through lower premiums. Although managed care was able to diffuse the high cost of pay-for-service of the 1970s, today’s health care costs have outgrown the current system, making that health care reform is essential, which we will get to at a later date.  When addressing the quality of care Silberman’s article, Managed Care Regulations: Impact on Quality?, notes that states have strict requirements to ensure the quality of care provided through managed care organizations. Internal structures and processes must be included in three areas; internal or external quality assurance systems, utilization review procedures, and dispute resolution mechanisms. In addition to the above mentioned requirements, MCOs have the opportunity to have their quality checked through an accreditation process, which began in 1991.

Managed care encompasses all resources and processes of health care including financing, workforce, special populations, technology, inpatient, outpatient, and long-term care. Technologist might say that it is always important to have funding for their department, because technology is a leading resource that enables us to discover cures and increase the percentage of those who are cured. However, without managed care and without the integration of all the resources necessary to deliver care, the advanced of technology would be meaningless. One could argue that workforce is the most important resource that enables health care to function. In an analogy between health care and the Daytona 500 race, the media often looks at who the driver of the car is and based on their past experience which is most likely to win. Although it’s important to have a well-trained driver, a driver cannot go anywhere unless it has a well build structure (aka a health insurance structure), and the car would represent the system that is managed care.

All in all, because managed care is such a large part of system resources and processes maintaining a health care system that is efficient in cost, proficient in access, and one that continued to reach a standard of quality would be near impossible.   

 -written by Jessica Ramel

Sources Used

Morgan, D.W., Wolfe, P.R., (1991) Can Manage Care control costs? (1991) Health Affairs, 10, no.4, p.120-128. doi: 10.1377/hlthaff.10.4.120

Silberman, P., James, K., Managed Care Regulations: Impact on Quality? (2000), 8(2), p. 21-39 Retrieved from EBSCOhost. http://www.aspenpublishers.com/books/kongstvedt/Readings/Chapter%2035/QMHC%208-2.p21-39.pdf

Shi, L., Singh, D.A., (2008). Delivering Health Care in America: A systems Approach. Sudbury, Massachusetts. Jones and Bartlett Publishers, Inc.

PBS (2010). Managed Care. Retrieved from http://www.pbs.org/healthcarecrisis/managedcare.html