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