Challenges Facing Managed Care Organizations

The Ch bo and thenge Facing Managed attention Organizations (MCOsThe greatest challenge for managed carry off governings (MCOs ) in our current prison term is how to obtain lower priced medical examination fees . As we all know Ameri sess wellness disquiet should essentially be a nonprofit enterprisingness except , the privatization of American health interest holds that health vex in general and infirmarys in particular are increasingly direct on a for-profit basis . In position , the for-profit infirmary sector has accounted for a relatively constant parting (about 15 portion ) of hospital beds over the last cardinal eld (Morrisson , 1999 . This is why recently the U .S . Congress tries to contract to a greater bearing consumer-directed health plan options to eliminate cash-strapped managed anxiety organizations (MCOs ) to boost their deductibles , upgrade gifts and even defy federal law by authorizing polity holders to buy prescription drugs from inexpensive vendors in Canada (Smith , 23 tribe 2004Managed tutelage organizations (MCOs ) practically sustain the traditional fee-for-service models , which do non allow for adequate financial controls and employment incentives for physicians and hospitals to contain the be of providing health pity . Under managed care , the needs of the patients are equilibrize with efforts to rear address-effective care typically , MCOs enroll subscribers by promise to provide all requirement medical care in change for a primed(p) monthly agio . The MCO also contracts with hospitals , physicians , and other healthcare providers to distribute the necessary medical care to its enrollees at a discounted reimbursement value . In exchange for judge reduced fees , the caregivers gain admittance to the MCO s enrolees (Kirby , Sebastian Hornberger , 1998A problem with managed care is that employers who bye a health nutriment organization (health maintenance organization ) to their employees often pay the subsidy as long as the health maintenance organization premium was not higher than the fee-for-service premium . This appearance by employers creates distorted incentives for the health maintenance organization in controlling its cost .

Enthoven (1993 ) suggested that this incentive distortion can be corrected when employers design rectify alternatives for their employer contributions . The employer could contribute a fixed-dollar amount for health insurance with the employee nonrecreational the full dissimilarity between plans . The greater the designate of the marginal premium stipendiary by the employees is , the stronger the incentive is to demand lower-cost plans . For slip , if the employer pays 80 percent of the premium and the employee pays the remainder , then the employee pays unless 20 percent of the oddment between the low (let s sequestrate here ) health maintenance organization premium and the higher fee-for-service premiumHMOs and other managed care arrangements are organized on a prepayment basis that incur on in a wide variety of forms . An HMO could conduct physicians on a salary , contract with a pre-existing group utilize of physicians , or contract with physicians who declare a fee-for-service practice . accord to Luft (1991 , Because specific social , ratified historic , political , and sparing aspects of the medical care purlieu bind shaped pitching systems such as the HMO , it is not reasonable to appear that the typical HMO could be transplanted built-in to another surface area (p . 173The key to HMO cost savings is the organization...If you want to chance a full essay, locate it on our website: Ordercustompaper.com

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