What are the positive effects of managed care on our healthcare system? What are some of the problems created by managed care that have been identified by patients, providers, and interest groups?
The positive effects of managed care are; managing a person health care along with controlling cost. When one person follows the patients health and controls where they go and what they do and what medications they take it allows a patient to receive controlled health care along with cost control. They have to get referrals to other providers and when the provider sees the patient the provider must write back to the gatekeeper to keep them informed of the care necessary for their patient. The patient is somewhat safer in a way when one person is following their entire care plan.
Managed care was a gatekeeper where one provider followed your care and you needed a referral to see anyone else. Whereas Medical home is where you receive all your medical care or most of your medical care within that home. There are many providers who work within your medical home and see those providers so it is a little different. The Patient Centered Medical Home is a care delivery model whereby patient treatment is coordinated through their primary care physician to ensure they receive the necessary care when and where they need it, in a manner they can understand. The objective is to have a centralized setting that facilitates partnerships between individual patients, and their personal physicians, and when appropriate, the patient’s family. Care is facilitated by registries, information technology, health information exchange and other means to assure that patients get the indicated care when and where they need and want it in a culturally and linguistically appropriate manner.
Managed care has introduced changes, such as cost effectiveness, access to care, and quality of care, to many components of the U.S. healthcare delivery system. These changes have affected how healthcare administrators and clinical practitioners perceive the impact of managed care on healthcare delivery practices. A survey was initiated to explore whether the perceptions of administrators differed from those of practitioners and to discover which organizational variables could explain the difference. A descriptive, cross-sectional survey design was used for the target population of administrators and practitioners in high, moderate, and low managed-care-penetration markets. Two investigator-developed instruments–the Managed Care Perceptions Inventory (MCPI) and the MCPl-Demographic–and an intact centralization of decision-making assessment subscale were used for data collection.
Managed care has been known to be used very differently from primary care. The trends in the 1990s were that under the guise of care coordination, turned many providers of primary care into gatekeepers who, in fact, mostly denied care. Managed care was a concept which took awhile for people to understand. We were used to seeing who we wanted and getting care from any provider at any time. When managed care came a long it was difficult to have one person in charge of our medical care. We had to see the doctor in order to get a referral to see another doctor. It was a tough concept to grasp. However, millions are on managed care programs now, and many more are enrolled in PPO plans, so they have more control over where they can go with a little more cost involved. Managed care is a great program for people who need cheaper medical care, where as PPO plans are HMO with a little more benefits that cost more if you prefer to out of network.
Source of the Problem: Employer Provision of Insurance. It is self-evident that the interests of the employer are different from those of the employees. Employers, of course, compete for workers in the labor market by offering fringe benefits in addition to wages. And the more generous the employer’s health insurance, the more attractive the job. But the employer’s primary interest is in healthy employees. Other things being equal, no employer has an incentive to advertise that the company health plan has excellent coverage for alcoholism and drug abuse, chronic conditions or other expensive-to-treat diseases.
Source of the Problem: Perverse Incentives for Insurers. In today’s environment, individuals are often able to exercise choice among options created by an employer or plans competing in a regulated market. However, many health plans are required to charge the same premium to every applicant, regardless of expected health care costs. Under this one-price-for-all rule, the premiums sick people pay are well below the expected cost of their treatment, while the premiums of healthy people are substantially higher.
As a result, health plans face extremely perverse incentives to avoid the sick and attract the healthy. Indeed, plans that attract a disproportionate number of sick people eventually fail and leave the market. But since health plans cannot discriminate among enrollees on the basis of price, they tend to make quality adjustments instead. Specifically, each plan has an incentive to underprovide services to the sick and overprovide services to the healthy.
Solution: Individually Owned Insurance. Most people with private health insurance obtain it through an employer. The reason is the federal tax law, which excludes employer premiums from the employee’s taxable income. This tax subsidy can reduce the cost of health insurance by 30 percent or more for an average-income family. By contrast, individuals who purchase their own insurance receive little or no tax relief. In addition to encouraging employer-based health insurance, the current system encourages waste. Since an extra dollar of earnings can be used to buy a dollar’s worth of health insurance as an alternative to 70 cents of take-home pay, employees have an incentive to obtain too much health insurance, covering items that could have been purchased more efficiently out of pocket or might not have been purchased at all. We propose a neutral tax policy that eliminates these distortions.
As an alternative to employer-provided health insurance, employees should be able to purchase their own insurance and get similar relief under the tax law. They should get a tax credit that encourages them to purchase “bare bones” catastrophic insurance – leaving them free to purchase additional coverage with their own money. Employers should be able to help employees obtain individually owned insurance by supplying information, negotiating group discounts, etc.
The advantages of these proposals are clear:
- Employees would be able to purchase insurance tailored to their needs, rather than insurance selected by their employer.
- People would have portable insurance that travels with them on their journey through the job market.
- Tax relief would extend to the self-employed and others who do not have employer-provided coverage.
- The limited tax subsidy would assure that the purchaser, rather than taxpayers, would bear the full cost of extra, nonessential coverage.
- Those who want to continue under the current system would be free to do so.
Solution: A New Medical Savings Account. Although current tax law subsidizes the payment of employer-based third-party insurance premiums, it provides virtually no tax relief to those who self-insure by putting funds aside to pay medical bills directly. Thus the tax law encourages us to turn over all of our health care dollars to a third-party manager. The exceptions are two MSA pilot programs – one for the elderly on Medicare and the other for small businesses and the self-employed. Yet these tax-advantaged MSAs are inadequate to deal with the challenge of managed care for three reasons:
- Contributions to tax-free (pilot project) MSAs can be made only by those with high-deductible plans – thus excluding enrollees in HMOs and most other managed care plans.
- The MSA deposit is mainly designed to pay deductible expenses and is exhausted at the point where third-party (often managed care) payment takes over.
- After the insurance period (usually one year), withdrawals from the MSA face taxes and penalties unless they are used to purchase medical care – a feature that forces the MSA to operate less like real self-insurance and more like prepayment for the consumption of medical care.
To remedy these defects and give MSAs more flexibility, we propose to make the tax law more neutral with respect to the use and withdrawal of MSA funds. Specifically:
- People who take advantage of the new tax credit should be able to make deposits to a new type of Medical Savings Account.
- The new MSA is designed to wrap around third-party insurance – providing funds with which to pay any uninsured medical expense. [See the diagram.]
- Deposits to the MSA would be made with aftertax funds, and withdrawals for any reason would be tax-free.
- Like the previous set of proposals, these would create a new option without taking away any current option.
Again, the advantages of these proposals are clear:
- Enrollees in HMOs and other managed care plans would be able to make MSA deposits and use the funds to pay nonnetwork doctors and purchase diagnostic tests and other services not covered by their health plan.
- Employers and insurers would have much more flexibility in designing plans; for example, they could provide first-dollar coverage for some services (e.g., preventive tests with proven payback) and high deductibles for others (e.g., general checkups) without jeopardizing the ability of the insured to have an MSA.
- A special type of fee-for-service plan – one that pays fixed fees for services and procedures – would become more viable because if the scheduled fee proved insufficient, people could use their MSA funds to pay the difference.
- Because MSA withdrawals would be tax-free, people could make risk-free MSA deposits – secure in the knowledge that they could have their money back without penalties if they had no medical expenses.
- Because MSA withdrawals would be tax free, people in future periods could make unbiased choices among medical care, other goods and services and personal savings.
These proposals – if implemented – would change the ways the private marketplace responds to the perceived deterioration of health care quality that has emerged with managed care.