Lecture 9/Chapter 9 Flashcards
Managed care and integrated organizations: Learning Objectives
- Link between the development of managed care and earlier organizational forms
- Basic concepts of managed care and cost savings
- Main types of managed care organizations
- Distinguish between types of managed care organizations
- Advantages and disadvantages of different HMO models
- Why managed care did not achieve its cost-control objectives
- Driving forces behind organizational integration and integration strategies
- Describe highly integrated health care systems
managed care and integrated organizations
- managed care fundamentally transformed the delivery of health care in the US
- added a third party -> the health care you can receive according to insurance policy rules
- ACA did not obliterate managed care
- employer sponsored insurance enrolled fewer than 1% of employees
- managed care originated in the US and its tools spread internationally
- why so popular?
what is managed care
- integration of financing, insurance, delivery, and payment within one organization
- an organized approach to deliver comprehensive services to enrolled members
- through efficient management of services
- negotiation of prices with providers
- a concept or plan
- formal control over utilization…ACCESS*
- integration of:
- financing
- insurance
- delivery
- payment
evolution of managed care
- contract practice takes capitation further by incorporating a defined group of enrollees
- prepaid group practice
- accreditation of managed care organizations
- quality assessment in managed care
prepaid group practice
- principles of capitation, bearing of risk by provider, group of enrollees financed by employer
- delivery of comprehensive services
growth of managed care
- flaws in the fee-for-service model
- employers response to rise in premiums -> employers were looking for more affordable options to offer to employees
- weakened economic positions of providers
flaws in the fee-for-service model
- uncontrolled utilization
- uncontrolled prices and payment- couldnt regulate how much was charged only how much was reimbursed
- focus on illness rather than wellness
- (Manage care promotes wellness)
- indemnity insurance allowed the insured to get services anywhere, without restraint (no capitation)
- moral hazard prevailed, along with provider-induced demand
- itemized billing of charges by the provider to the insurer
- few, if any controls over the amount of payment
- insurers functioned simply as passive payers of claims
- sickness coverage, no coverage for wellness and prevention, no control over HOSPITILIZATIONS
efficiencies and inefficiencies in managed care
- integrating the quad functions of health care delivery
- MCOs control costs by sharing risk with provider or extracting discounts
- cost savings
- administrative inefficiencies created for providers
- contracts with providers exclude some services
cost control in managed care
- choice restriction -> closed panel and open panel
- care coordination
- disease management
- pharmaceutical management
- utilization review
- practice profiling
pharmaceutical management
- 3 strategies:
- use of drug formularies- list of covered drugs
- use of tiered cost sharing
- use of pharmacy benefits managers (PBMs)
utilization review
- prospective utilization review
- concurrent utilization review
- retrospective utilization review
health maintenance organization (HMO)
- type of managed care organization
- staff model
- group model
- network model
- independent practice association model
preferred provider organization
- type of managed care organization
- establishes contracts with a select group of physicians and hospitals
- type of MCO that forms a contract with a select group of providers of hospitals (preferred providers)
- Fewer restrictions
- More expensive
- Offers open panel
- Discounted fee arrangements with providers (NOT CAPITATION) -> DRGs and Bundle payments
- No direct risk sharing with providers
- Negotiated
- Most popular
- Usually no gatekeeper
point of service plans
- types of managed care organization
- combine HMO and PPO options
trends in managed care
- employment based health insurance enrollment
- medicaid enrollment- primary care case management (PCCM)
- medicare enrollment and payment reforms
influence on cost containment
- backlash from enrollees and providers prompted MCOs to end aggressive cost control measures
- it was too restrictive at first
- forced MCO to come up with options -> PPO
impact on access
influence on quality of care
-HMO and non-HMO plans provided roughly equal quality of care
3 reasons for discontentment toward managed care
- employers switch to manage care to restrain costs of health insurance premiums
- insured did not see a reduction in their premiums or out of pocket expenses
- physicians hostile towards managed care
regulation of managed care
-2 types of state legislated statutes
Any Willing Provider
-Requires admission of any provider into a network as long as the terms and conditions of the network are abided by.
Freedom of choice
-Require MCOs to allow their enrollees to seek care from providers outside the panel and not be penalized for it
integration strategies
- mergers and acquisitions
- joint ventures
- alliances
- horizontal integration
- vertical integration
basic forms of integration
- major participants in organizational integration have been physicians and hospitals
- clinical and nonclinical entities may be involved
- management services organizations
- physician hospital organizations
- provider sponsored organizations
highly integrated health care systems
- integration in the US health care system continues to intensify
- organizational integration does not negatively affect the quality of care
- integrated delivery systems
- accountable care organizations
- payer-provider integration
summary
- participation in the HEDIS program improved the quality of services provided by MCOs
- growing power of managed care triggered integration among health care providers
- highly integrated organizations are held accountable
- must achieve specific objectives related to costs, quality, and consumer satisfaction
high deductible health plan (HDHP)
- seen in high paying people
- portion of check is taken out to save for health services
- it builds overtime and carries over
- you can use that money later is you pay a fee
iron triangle
- refers to the system
- not us
financing
-negotiation of premium with employers
insurance
-the MCO assumes insurance risk
delivery
- MCOs own physicians and hospitals or contracts with providers
- will they be independent but have a contract
- will they be employed by them
- what hospitals can they go to and see
payment
- risk sharing- between the provider and the insurance company
- MCO needs to provide an incentive for the providers not to over utilize services -> reimbursement is less
- payer (MCO) and the provider are sharing the risk
- capitation
- discounted fees
- salary
- cost containment