Challenges Facing Managed Care Organizations

The Challenge Facing Managed Care Organizations (MCOsThe greatest challenge for managed finagle organizations (MCOs ) in our current time is how to obtain lower priced medical examination fees . As we all know American health disquiet should essentially be a nonprofit enterprise except , the privatization of American health interest holds that health misgiving in general and infirmarys in particular are increasingly direct on a for-profit basis . In fact , the for-profit hospital sector has accounted for a relatively constant share (about 15 percent ) of hospital beds over the last twenty eld (Morrisson , 1999 . This is why recently the U .S . Congress tries to push to a greater extent consumer-directed health plan options to avoid cash-strapped managed anxiety organizations (MCOs ) to boost their deductibles , emanation gifts and even defy federal law by authorizing polity holders to buy prescription drugs from low-cost vendors in Canada (Smith , 23 folk 2004Managed care organizations (MCOs ) practically apply the traditional fee-for-service models , which do non provide adequate financial controls and utilization incentives for physicians and hospitals to contain the be of providing healthcare . Under managed care , the needs of the patients are equilibrize with efforts to provide cost-effective care Typically , MCOs enroll subscribers by promising to provide all necessary medical care in change for a fixed monthly premium . The MCO also contracts with hospitals , physicians , and other healthcare providers to dispense the necessary medical care to its enrollees at a discounted reimbursement rate . In exchange for accepting reduced fees , the caregivers gain access to the MCO s enrolees (Kirby , Sebastian Hornberger , 1998A problem with managed care is that employers who offer a health maintenance organization (health maintenance organization ) to their employees often pay the premium as long as the HMO premium was not higher than the fee-for-service premium . This behavior by employers creates distorted incentives for the HMO in controlling its costs .

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 difference between plans . The greater the portion of the marginal premium paid by the employees is , the stronger the incentive is to choose 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 difference between the low (let s seize here ) HMO premium and the higher fee-for-service premiumHMOs and other managed care arrangements are organized on a prepayment basis that get on in a wide variety of forms . An HMO could conduct physicians on a salary , contract with a pre-existing group practice of physicians , or contract with physicians who maintain a fee-for-service practice . According to Luft (1991 , Because specific social , legal historic , political , and economic aspects of the medical care environment bind shaped delivery systems such as the HMO , it is not reasonable to expect that the typical HMO could be transplanted built-in to another country (p . 173The key to HMO cost savings is the organization...If you want to get a full essay, order it on our website: Orderessay

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