Managed Care. Managed Care. A “managed care” system defines the framework within which a service system’s three principal players (the payor, the service providers, and consumers) interact.
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Managed Care Organizations
1. Patient health is being managed
2. Physician behavior is being managed
3. Patient behavior is being managed
4. Health care institutions are beingmanaged
a. Contracting selected MDs & hospitals
to furnish comprehensive care
b. Setting a predetermined monthly,
premium fee for services,
c. Incorporating financial incentives to
encourage patients to use only resources
in the plan.
d. Having physicians assume some financial risk for their work --thus the role changes from advocacy to allocation (gatekeeper), and
e. Monitoring health care providers for quality assurance and utilization management.
1. HMOs (Health Maintenance Organizations)
-IPAs (Independent Provider Associations)
2. PPOs (Preferred Provider Organizations)
3. POS (Point of Service Plans)
There are 2 types:
1. One group of HMOs consists of MDs who contract with an HMO
1) e.g. Doctors who sign up and work
exclusive for Kaiser
2. Independent practicing MDs join an association (IPAs) which contracts with an HMO (most MDs are here)
1) These doctors retain their own individual
practices (have own offices)
2) They are reimbursed via capitation* or at a
discounted rate for health services
* capitation-will be addressed later
E.g. Patients may have to pay a $500 deductible before the PPO/ or insurance company “kicks in”
Health Care System
or Insurance Company
MD, Dentist, Pharmacist
Higher fees because
The MD gets a set fee each month. If the patients sees the MD 10 times a month, the MD only gets that one fee. If the patient doesn’t visit his doctor that month, the MD still gets that monthly fee anyway.
In these plans, the MD shares the risk with the insurer (MCO) by making the MD pay for all or some of the following patient’s costs:
1. All primary care
2. Lab tests and X-rays
3. Consultation/referrals to specialists
4. Hospitalization (rarely)
% of Enrollment
KPMG Peat Marwick, Health Benefits in 1996
Kaiser Family Foundation & Health Research Education Trust, 1999 annual survey
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