Q Module Six assignment 09302023

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Purdue University *

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N678

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Health Science

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Dec 6, 2023

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docx

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Running head: MARKET FOR HEALTH INSURNACE 1 1. The primary cost-saving features of managed care include selective contracting, utilization review, and risk-sharing arrangements. Selective Contracting: Managed care organizations negotiate contracts with selected healthcare providers who agree on specific medical practice styles and predetermined fee schedules. This allows managed care plans to control costs by contracting with providers willing to work within budget constraints. Utilization Review: Managed care organizations implement utilization review processes, including preadmission, concurrent, and retrospective reviews, to ensure the appropriateness and efficiency of medical services. These reviews help prevent unnecessary hospital stays, tests, and procedures, thereby reducing costs. Risk-Sharing Arrangements: Managed care plans shift some financial risk to healthcare providers through risk-sharing arrangements. In capitated payment systems, providers receive a fixed payment per patient, incentivizing them to deliver cost-effective care and discourage overutilization of services. 2. The move to managed care in the medical marketplace has had a mixed impact on the quality of care. The evidence regarding the effect of managed care on quality is diverse and context dependent. Managed care systems have been successful in adopting many cost-saving features and competing effectively with fee-for-service systems. However, the quality of care in managed care plans can vary based on factors such as the specific managed care arrangement, provider network, and utilization review processes. Some studies have shown that managed care plans can provide equal or better-quality care compared to fee-for-service plans. However, there are cases, often highlighted in the media, where managed care plans have been criticized for denying necessary care. It's important to note that the perception of quality can sometimes be influenced by individual experiences, leading to a complex image of managed care's impact on care quality. 3. Capitated Basis VS Fee-for-Service Basis Pros: Capitated payments provide financial predictability for providers. Physicians receive a fixed payment per patient, encouraging preventive care and cost-effective treatments. Capitation can promote better coordination of care, focusing on overall patient health rather than individual services. Cons: There are concerns about under-provision of services to save costs. If capitated payments are too low, providers might limit necessary treatments to stay within budget constraints. This can potentially compromise patient care. Pros: Fee-for-service payments reward providers for each service rendered, potentially ensuring that patients receive all necessary treatments. This system offers financial incentives for more tests, procedures, and appointments, which could lead to comprehensive care. Cons: Fee-for-service payments can incentivize overutilization of services, driving up healthcare costs. Providers might focus on quantity rather than quality of services, leading to fragmented care. In the context of risk-sharing contracts, capitated payments incentivize providers to manage costs effectively, but there is a delicate balance required to ensure that quality of care is not compromised. Risk-sharing contracts can encourage better care coordination and prevention-

Running head: MARKET FOR HEALTH INSURNACE 2 focused practices. However, there is always a risk of undertreatment if financial incentives are not aligned with quality care standards.

Running head: MARKET FOR HEALTH INSURNACE 3 Managed care models in the healthcare system are designed with specific features aimed at reducing costs while maintaining the quality of care provided to patients. One fundamental approach is selective contracting, wherein managed care organizations negotiate contracts with healthcare providers who agree to adhere to specific medical practice styles and predetermined fee schedules. This selective approach allows managed care plans to control costs effectively by partnering with providers willing to work within budget constraints. Utilization review processes are another critical component of managed care strategies. These reviews, including preadmission, concurrent, and retrospective evaluations, ensure the appropriateness and efficiency of medical services. By preventing unnecessary hospital stays, tests, and procedures, managed care plans significantly cut down on expenses, contributing to substantial cost savings. Moreover, managed care organizations implement risk-sharing arrangements, particularly in capitated payment systems. Under capitation, providers receive a fixed payment per patient. This system provides financial predictability for healthcare professionals and encourages preventive care and cost-effective treatments. However, there are concerns about potential under-provision of services, as providers might limit necessary treatments to stay within budget constraints, potentially compromising patient care. Comparatively, fee-for-service payment systems reward providers for each service rendered. While this system ensures that patients receive necessary treatments, it can incentivize overutilization of services, driving up healthcare costs. Providers might focus on quantity rather than the quality of services, leading to fragmented care. This highlights the complexity of aligning financial incentives with the delivery of high-quality, comprehensive care. The impact of managed care on the quality of healthcare services is nuanced. While managed care systems have been successful in adopting cost-saving features and competing effectively with fee-for-service models, the quality of care can vary based on specific managed care arrangements and provider networks. Some studies suggest that managed care plans can provide equal or superior quality care compared to fee-for-service plans. However, instances where managed care plans deny necessary care have raised concerns about the potential compromise of quality in the pursuit of cost containment. In summary, managed care's cost-saving features, such as selective contracting, utilization review, and risk-sharing arrangements, play a crucial role in shaping the healthcare landscape. However, striking the right balance between cost containment and the provision of high-quality care remains a challenge. As the healthcare industry continues to evolve, finding innovative solutions that ensure both financial efficiency and optimal patient outcomes will be essential for the success of managed care models.

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Running head: MARKET FOR HEALTH INSURNACE 4 References Henderson, James W. (2023). Health Economics and Policy . Cengage Learning. Pera, M. F., Cain, M. M., Emerick, A., Katz, S., Hirsch, N. A., Sherman, B.W., Bravata, D. M. (2021). Social determinants of health challenges are prevalent among commercially insured populations. Journal Primary Care Community Health, 12 , 1-10. DOI: 10.1177/21501327211025162. Tiller, J., Bakshi, A., Dowling, G., Keogh, L., McInerney-Leo, A., Barlow-Stewart, K. Boughtwood, T., Gleeson, P., Delatycki, M. B., Winship, I., Otlowski, M., & Lacaze, P. (2023). Community concerns about genetic discrimination in life insurance persist in Australia: A survey of consumers offered genetic testing. European Journal of Human Genetics ,1-9. https://doi.org/10.1038/s41431-023-01373-1 References Galvani, A. P., Parpia, A. S., Foster, E. M., Singer, B. H., & Fitzpatrick, M. C.(2020). Improving the prognosis of health care in the USA. Lancet, 395 (10223), 524-533. DOI: 10.1016/S0140-6736(19)33019-3.

Running head: MARKET FOR HEALTH INSURNACE 5 Getzen, T. E. (2000). Health care is an individual necessity and a national luxury: Applying multilevel decision models to the analysis of health care expenditures. Journal of Health Economics, 19(2), 259-270. https://doi.org/10.1016/S0167-6296(99)00032-6. Yang, L. H., Wong, L.Y., Grivel, M.M., & Hasin, D. S. (2017). Stigma and substance use disorders: an international phenomenon. Current Opinion in Psychiatry, 30 (5), 378-388. DOI: 10.1097/YCO.0000000000000351.

Q Module Six assignment 09302023

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