Chapter 9: Managed Care & Integrated Systems – Flashcards

Managed are is: -a mechanism of providing health care services where a single organization takes on the management of: -financing -insurance -delivery -payment -MCO's exercise formal control over the utilization of health care services -The most common methods used for reimbursing providers are: -capitation -discounted fees

The provider is paid a fixed monthly sum per enrollee, often called a per member, per month (PMPM) payment

-a modified form of fee-for-service -discounts off the regular fees often range between 25%-35%

Early 1900's -railroad, mining and lumbar companies employed salaried physicians to provide care During the 1980's -managed care experienced slow growth, but in California and Minnesota, growth was faster as managed care grew, competition among MCO's gave rise to new forms of managed care plans Backlack in the 1990's -comprimises were made: utilization management was relaxed, fee for service payment was incorporated along with capitation, greater choice of providers was offered

was passed to provide an alternative to fee for service by stimulating the growth of HMO's

-managed care: now the primary vehicle for delivering health care to the majority of Americans, HDHP's are also commonly in the form of managed care plans

-Medicare: (part c) gives beneficiaries the managed care choice -beneficiaries have the option to remain in fee for service -75% of the beneficiaries have elected the fee for service option -Medicaid: -waivers under the social security act -balanced budget act, 1997 gave states authority to enroll beneficiaries in managed care without waivers -over 70% are enrolled in managed care plans nationwide

-third parities as "a set of techniques used by or on behalf of purchasers of health care benefits to manage health care costs by influencing patient care decision-making through case-by-case assessments of the appropriateness of care prior to its provision"

MCO's use three main types of control: 1. expert evaluation of what services are medically necessary 2. determination of how services can be provided most inexpensively (ex: outpatient vs. inpatient) 3. review the course of medical treatment (ex: when a patient is in the hospital)

-gatekeeping -utilization review prospective utilization review, concurrent utilization review & retrospective utilization review

-primary care physician (PCP) coordinates all health services needed by an enrollee -it emphasizes preventative care, routine physical examinations, and other primary care services -higher levels of services are obtained on the basis of referral from the PCP

the process of evaluation the appropriateness of services provided

-prospective utilization review -concurrent utilization review -retrospective utilization review

-the medical necessity for certain treatments is determined before the care is delivered -the main objectives is to prevent unnecessary or inappropriate institutionalization or treatments, such as surgery -precertification/preauthorization is associated with this type of control in which the necessities of the test or procedures are determined before care is provided to the patient

-appropriateness is determined during the course of health care utilization -the most common example: monitoring the length of inpatient stays -discharge planning and concurrent review go hand in hand

-managing utilization after services have already been delivered -based on examination of medical records to assess the appropriateness of care -over utilization or underutilization are examined -past medical records are examined to assess the appropriateness of care

-first type of managed care plans to appear on the market -four common HMO models: 1.staff model 2. group model 3. network model 4.independant practice association model -they differ according to the arrangements made with participating physicians

-staff model HMO employs its own fixed salaried physicians -at the end of each year: a pool of money is distributed among the physicians in the form of bonuses, based on each physicians productivity and the HMO's profitability exercises greater control over practice patterns and can better monitor utilization -least popular type of HMO -continues to decline because of high operating expenses and limited choice of providers

-contracts with a multi specialty group practice and serperatey with one or more hospitals, to provide comprehensive services to its members -physicians are employed by the practice not the HMO -the HMO pays an all-inclusive capitation fee to the practice to provide physician services to its enrollees

-HMO contracts with more than one medical group practice -it is adaptable to large metropolitan areas and widespread geographic regions -group practices are responsible for providing all physician services -it is able to offer more choice -disadvantage: dilution of utilization control

-has been the most successful in terms of enrollment -the IPA establishes contracts with solo and group practices -the IPA functions as an intermediary representing many physicians -disadvantage: if a contract is lost, the HMO loses a large percentage of participating physicians

-instead of capitation, PPO's make discounted fee arrangements with providers -discounts range between 25% -35% off providers regular fees

-POS plans combine features of HMO's with patient choice found in PPO's -POS plans overcome restricted provider choice but retain the benefits of tight utilization -free choice of providers is a major selling point for POS -POS peaked in 1998-1999, but has declined due to high out of pocket costs

has tighter utilization controls then PPO's with PPO's there's less gatekeeping and utilization

one aspect in which managed care differs from conventional insurance is that many managed care companies are also responsible for the delivery of health care services to members enrolled in a plan.

health insurance as "fringe benefits" as a result workers in "employer sponsored health plans" have the largest portion of beneficiaries enrolled in managed care plans

copays/deductibles compared to PPO's

the "choice of providers" American consumers want to be able to have a choice on who to see and thus, the insurance market responded and developed all types of MCO's allowing consumers to make some choice on who to see but with still some decision on how much to charge consumers

thus, "out-of-network" is not a fundamental characteristic of HMOs. With most HMOs, patients seeks healthcare in-network instead of out-of-network

occurs when patients pay for a portion of health care costs not covered by health insurance -the out-of-pocket payment varies among healthcare plans, and also depends on whether or not the patient chooses to use a healthcare provider who is contracted with the healthcare plan's network

is either an economic situation where one individual, group, or government underpays for a service, resulting another individual, group or government overpaying for a service (shifting compared to expected burden)

-influence on cost containment -in the U.S., the primary responsibility for cost containment falls on the private sector -in other nations, governments control costs by limiting services and payments to providers -managed care successfully controlled costs during the 1990's -but there was backlash -recent moderation of premium increases is attributed to increased cost sharing

-managed care enrollees usually have good access to primary care, preventative services and health promotion activities -HMO enrollees experience fewer disparities in access and utilization

-comprehensive studies have shown roughly equal quality of care in HMO and non-HMO plans -quality has actually improved over time

race, ethnicity, and socioeconomic status have little or no effect on quality under managed care -exceptions: -satisfaction ratings -for-profit vs. nonprofit MCOS -quality is not consistent in all MCO plans

the lack of integration of healthcare services

-growth in managed care was the main factor that led to the development of integrated health networks and not changes in reimbursement or hospital closes

-integration based on major participants -integration based on ownership or affiliation (ex: acquisitions and mergers, joint ventures, alliances, virtual organizations) -integration based on service consolidation (ex: horizontal integration & vertical integration)

-PHO (alliance between physicians and hospitals together, they have greater bargaining power with MCO's) -Large PHO's can contract directly with employers -after a surge in the 1990's their numbers have declined -many failed because of poor management, undercapitalization, and federal scrutiny

Acquisitions: purchase of one organization by another Mergers: two organizations join to form a single entity results gained: gain efficiencies, open new satellites, regional health systems

-a jointly created independent organization -based on cooperation instead of competition -helps the joint owners diversify into new services

-based on agreements between two organizations -does not involve joint ownership of assets -mainly involves resource sharing -gives an opportunity to evaluate advantages before a merger - requires little financial commitment -can be easily dissolved

-growth strategy in which a health care delivery organization extends its core product or service -main objective is to achieve geographic expansion

-links services that are at different stages in the production process of health care -purpose: increase the comprehensiveness and continuity of care -diversification strategy -can be achieved through acquisitions, mergers, joint ventures or alliances