Care Revolution Varies Dramatically Need Initial

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Explain the growth of managed care that began in the 1980s. As a result, how has health care delivery evolved? Based on the literature, what does the future hold?


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Since around 1990, managed care has been the single most dominant force to fundamentally transform the delivery of health care in the United States. (Shi & Singh, 2017, p. 219) Interestingly enough, the origins of managed care can be traced back to at least 1929, when Michael Shadid, a physician in Elk City, Oklahoma, established a health cooperative for farmers in a small community without medical specialists or a nearby general hospital. He sold shares to raise money to establish a local hospital and created an annual fee schedule to cover the costs of providing care. (NCD, n.d.) Over the next several decades, the cost of hospital and medical care cost skyrocketed out of control. Several attempts were made over the years to control the rising cost. It wasn’t until the 1980s that serious gains were made:

During the late 1980s and early 1990s, managed care plans were credited with curtailing the runaway growth in health care costs. They achieved these efficiencies mainly by eliminating unnecessary hospitalizations and forcing participating physicians and other health care providers to offer their services at discounted rates. By 1993, a majority (51%) of Americans receiving health insurance through their employers were enrolled in managed health care plans. (NCD, n.d.)

How has managed care affected the health care delivery system? According to The National Bureau of Economic Research:

In the last 15 years, there has been a huge shift in health-care insurance toward managed care. In 1980, only about 5 percent of the privately insured population was in managed care. By 1987, that was up to 25 percent, and today, over 75 percent of the privately insured population is enrolled in managed care. Enrollment in the most restrictive form of managed care–Health Maintenance Organizations (HMOs)–rose from 16 percent of insured workers in 1987 to 48 percent in 1995. During that same time, enrollment in Preferred Provider Organizations (PPOs), the next most restrictive form of managed care, rose from 11 percent to 25 percent. But the extent of the managed-care revolution varies dramatically across states. In California, for example, about 80 percent of the insured population is in managed care, whereas in Alaska and Wyoming, managed care is almost non-existent. Cutler and Sheiner use this fact to compare spending growth across states. (NBER, 2018)

Regarding the future of managed care, products and distribution methods will become essential in the competition of plans on quality, service, and price. There will also need to be a greater influence on information technology resulting in more offshore services, information system integration, drug safety monitoring, and high-quality information. (Omachonu & Einspruch, 2010)

With the constant evolving of health care, we cannot afford to lose focus of what matters most and that is the caring for of patients. It can be easy for those in charge of health care facilities and health care to delivery to become distracted by the bottom financial line. Stakeholders, board members and all those who profit from health care systems can focus on budgets, buildings and bank accounts. However, if we fail in providing superior patient care then there will be no budgets, building or bank accounts to be worried about. As stated in 1 Samuel 2:8, “He raises up the poor from the dust; he lifts the needy from the ash heap to make them sit with princes and inherit a seat of honor. For the pillars of the earth are the Lord’s, and on them he has set the world.” We must remain humble even though we may be considered “the pillars” of the health care world and remember that the only reason we are able to provide the care we do is because the Lord has given us the ability to do so.

PLEASE RESPOND TO THE FOLLOWING POST FROM CLASSMATE

Managed care is defined as the mechanism of providing health care services in which a single organization takes on the management of financing, insurance, delivery and payment (Shi & Singh, 2017). Beginning in the 1980s, private businesses could no longer afford the cost increases in health insurance premiums that they had to pay on behalf of their employees. Therefore, a switch was in transition from traditional health insurance premiums to managed care plans. Managed care essentially attempts to control the costs by controlling the provision of services; employers control costs by limiting the employee’s options. Under managed care, fewer specialists serve the general population and primary care physicians take on broader roles. Today, employees enrolled in managed care plans make up 51% of all people with employer sponsored insurance which is up 29% from 1988 (Iglehart, 1994).

In the 1980s and 1990s, the cost of covering members continued to rise without stopping and by the 1990s, many traditional health insurers were already modifying their existing products by introducing managed care tools (utilization review and quality measurement) (Navarro & Cahil). By 1993, the number of people covered by traditional insurance was less than half (48.9%) of all people who had employer-sponsored health coverage. During the growth of managed care, many doctors became affiliated with managed care plans on a contractual basis but some formed their own physician-controlled networks instead of giving up their control to health insurance companies. This may be the result of the reported decrease in physician incomes as well as the decrease in the number of referrals (Iglehart, 1994).

The growth of managed care has forced health care delivery to evolve in positive and negative ways. Prior to managed care, most services were paid on a ‘fee for service’ basis with a minimal review of the physician’s clinical decisions. The implementation of managed care brought on: utilization review, prior authorization, physician profiling and mandatory second opinions. Since the inception of managed care, physicians have claimed that clinical autonomy, patient trust, career satisfaction and quality of care have all been diminished (Hadley & Mitchell, 2002). Even currently, managed care struggles to balance the quality of care with cost efficiency in the attempt to meet the needs of sponsors and patient members.

Under traditional insurance, health resource utilization was uncontrolled and the costs of resources were not considered. However, with managed care, there is a defined list of covered benefits and services establishing the fact that now resources are being used in a more cost-effective manner. Another difference stated earlier is that of pre-authorization. Traditional insurance accepted and paid claims to any provider while managed care requires prior authorization for all non-emergency services and expensive drugs/procedures. Through managed care, there is an integration of the financing and delivery system which completes the purpose of monitoring the patient in a total healthcare experience. Although there have been negative connotations to managed care, it has also brought about coordinated care. This care includes disease and case management, the implementation of population-based healthcarescreening programs, and the use of health outcomes research (Navarro & Cahil).

Regarding the future of managed care, products and distribution methods will become essential in the competition of plans on quality, service, and price. There will also need to be a greater influence on information technology resulting in more offshore services, information system integration, drug safety monitoring, and high-quality information (Omachonu & Einspruch, 2010). With the constant evolving of health care, we cannot afford to lose focus of what matters most and that is the caring of patients. As stated in 1 Samuel 2:8, ‘He raises up the poor from the dust; he lifts the needy from the ash heap to make them sit with princes and inherit a seat of honor. For the pillars of the earth are the Lord’s, and on them he has set the world.’

 
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