Managed Care

acute infections from contaminated water, no sewage disposal, impure foods

"care at home"

individualism "pay-as-you-go"

Food and Drugs Act

therapeutic breakthroughs

the "era of antibiotics"-penicillin (also had discovery of insulin)

compounding

-had anesthesia and aspect technique for technology
-better trained health professionals for inpatient care

chronic diseases initiated by sedentary lifestyle, smoking, alcohol, poor nutrition (bad habits)

-federal government assume greater role in healthcare
-medicare and medicaid for health benefits for elderly and poor

1965

-hospital growth (Hill Burton Act 1946)
-expansion of commercial health insurance groups, healthcare expenditures continued to soar
-latest technology (CAT, MRI, PET)
-greater government involvement in healthcare
-government tried to decrease costs

-"best" and "worst" system
-freedom of choice/technology
-disparity in health

-employed, insured, middle income
-MCO/Health plans (HMOs, PPOs, POS, indemnity)
-long term care
-mental health services
-PBM

-federal government provided care
-military
-indian health service
-community health centers
-centers for medicare and medicaid

federal program

federal and states

true

-organized delivery system (ODS)
-network of organizations
-provides or arranges to provide a coordinated continuum of services
-to a defined population

access, price, and quality

employees, dependents of covered employees, retirees receiving insurance as benefit

assume responsibility for obtaining coverage and pay some or all of the program costs (employer)

no but can influence them

underwriters assume financial risk of health services in return for premiums (income) paid by employer groups

-sponsors often contract with specialized companies to administer their health care benefits
-a few companies provide both underwriting and admin
-contact HC providers directly
-some HC services are "carved out" and administered separately

-developing and maintaining network of HC providers
-maintaining eligibility files
-providing information on health benefit program to providers and beneficiaries
-adjudicating and paying claims
-reporting on services and costs
In the structure of managed care, the function(s) of administrators is/are to...
a. assume responsibility for obtaining coverage and pay some or all of the program costs
b. provide information on the health plan to beneficiaries
c. contact providers directly and maintain a network of providers
d. a and b

e

no

yes

insurance companies

most liked their own plan based on their own experience/preference for looseenerous plans
The US general public...
a. liked their own managed care plan, but disliked health plans in general
b. liked all managed care plans including their own health plan
c. disliked all managed care plans including their own health plan

a

pre-paid plans that represent a competitive form of bureaucratic organization of medical care

AMA (physicians)

-professionalism serves as a basis for solidarity for resisting forces that threaten their social and economic position as a group
-MDs regarded them as threats to sovereignty/autonomy of their profession

MDs that participated in pre-paid plans

save for illnesses which could save the problem of financing healthcare

early Independent Practice Association (IPA-type of HMO)

financing and delivery of health care

medical costs and medical practice salaries

HMO Act 1973

-financial incentives to develop prepaid health plans
-required employers of >= 25 employees to offer HMO enrollment as an alternative to traditional indemnity (FFS) insurance

-HMO
-PPO
-POS
-HDHP/SO

-high-deductible plans paired with a savings option as a distinct plan
-even if the plan would otherwise be considered a PPO, HMO, or POS
-lower premiums and higher deductibles
-intended to incentivize consumer-driven healthcare
-being covered by an HDHP also requirement for having a health savings account

-most expensive form of health care
-dont control costs
-patient chooses provider
-provider paid by patient or insurance company
-provider is paid whatever he/she charges but not discussed in advanced
-designed to pay for catastrophic health care costs
-no cost management to providers-no risk
-spending controlled through cost shifting to patient
-no pre-certification (no controls or utilization)

-success of HMOs in controlling cost and utilization prompted entrepreneurs to develop MC overlays on FFS
-enrollee maintains provider choice
-all providers receive reimbursement on a discounted fee-for-service (FFS) basis
-insurance company may reimburse patient or pay provider directly
-few restrictions to provider
-most likely have deductibles
-pre-certification of elective hospital admissions
-expensive

conventional (FFS) high->HMOs gaining popularity->PPOs high->HDHP/SO becoming more popular

increased greatly

increased, but not as greatly as insurance premiums an contribution to premiums

true

-risk bearing
-physician type
-relationship exclusivity
-out-of-network coverage

-amount of risk borne by providers (full to none)
-capitation, risk pools, gatekeepers (e.g., PCP)

-relationship between MD and MCO
-eg HMO employee

MD provides care to one MCO only or to patients from multiple MCOs

care received from a provider out-of-MCO network as covered benefit

-staff model closed panel
-group model closed panel
-network model closed panel
-IPA model open panel

-physician practice confined to HMO
-HMO usually owns facilities
-very limited number of physicians that patients can see with coverage (no out-of-network coverage)
-patients can see any number of PCP
-physicians no incentive to provide more care than necessary
-financial risk arrangement

-salaried physicians
-physicians bear no risk
-HMO exercises greater control over MD practice patterns
-utilization review evaluate MD efficiency
-physicians can only work for their employer HMO and provide services for that HMOs enrollees
-"one stop shopping" for enrollees

no freedom of choiceestrictions

-HMO contracts with large multi-specialty medical groups offering services exclusively to the HMO on a capitated basis
-large group (many MDs but limited choice of enrollees, prestige-quality)
-MD bears risk

-non-exclusive contracts with >= 1 medical group
-network bears risk
-each group pays capitation fee based on # enrollees
-group financially responsible for specialist referral
-adaptable to large metropolitan areas
-offer wider choice of MDs than staff or group
-non-exclusive arrangement reduces MD risk
-dilution of utilization control
-MD bears risk

-legal entity of physicians separate from HMO
-physicians maintain their practice
-IPA contract with an HMO to provide service
-physicians maintain practice and can see other patients
-IPA-paid in capitation-shares risk with physicians
-MDs-paid in capitation or modified FFS
-responsible for utilization management and quality assessment
-IPA provides an expanded choice of MDs to enrollees currently the largest HMO plan
-MD bears risk

PPO

less restrictive

-physicians accept discounted FFS in exchange for high patient volume (no risk sharing)
-plan emphasizes reduced fees and utilization review to control costs
-physicians work usually solo or small group practices with nonexclusive MCO arrangement
-enrollees "channeled" to preferred provider
-less costly for enrollee to use in-network provider
-higher patient out-of-pocket costs in non-network

-hybrid plan that combines HMO and PPO
-HMO: tight utilization review, risk based reimbursement, capitation, gatekeeping (PCP)
-PPO: freedom of choice allows patient to select provider when service is needed, patient pays extra for non-participating provider
-perception of freedom of choice important to consumers

HRA-HDHP and HSA-HDHP

-employer-funded tax-advantaged health benefit plan that reimburses employees for out-of-pocket medical expenses and, in limited cases, help pay for premiums
-HRA is not health insurance
-employers offer employees a monthly allowance of tax-free money
-no funds are expensed until reimbursements are paid
-employers reimburse employees directly only after employees incur approved medical expenses
-can rollover
-cannot move from one employer to another

-"qualified" HDHP is a requirement for HSA: tax incentive
-meet federal level requirements for minimum high deductibles and out of pocket maximums and other requirements
-saving account created by individual to pay for health care-can be rolled over
-both employees and employers can contribute
-employee contributions are pre-tax, not required to contribute
-completely portableelongs to you

HSA: HDHP only-FSA: non-HDHP only
HSA: max allowed set by IRS-FSA:max set by employer so you don't lose too much money
HSA: belongs to enrollee, if dont spent it, balance belongs to you-FSA: belongs to employer, if dont spend it, balance belongs to employer
HSA: can rollover-FSA: use it or lose it, no rollover
Of all the managed care plans, which ones exert the greatest cost controls and the least provider access?
a. indemnity
b. IPA
c. group HMO
d. PPO

e

open; closed
Of the following managed care models, which plan provides the greatest patient access to providers?
a. staff
b. closed panel HMO
c. IPA
d. group HMO

c

PPO/HDHP

PPOs/HMOs
Closed panel HMO is characterized by...
a. balance billing
b. few restrictions to the provider
c. no risk arrangement
d. FFS

e

decreased

decreased