Evolution of Managed Care

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Evolution of Managed Care

Evolution of Managed Care
Managed care is a type of system that was formed to help control the costs and quality to health care services; this will give access to services to specific groups of covered patients. The system was created to help the patients (customers) to receive services without having the full financial burden (University of Washington, 1998). The managed care services’ goal is to be able to help individuals and their families by providing health care services that is affordable. This type of managed care will help employees or individuals by requiring a set fee to be paid to the physician for visits, a co-pay and monthly premium to be paid to the insurance company. This will lower the amount that the patient has to pay. There have been many demands that have been needed in the managed care system; changes have had to be made to keep improving the health care services to help it to continue to grow. This paper will cover how the managed care began, in addition to how the system has grown and the changes of the system.

The Beginning
The start of managed care is found in the early nineteenth century, a physician the name Dr. Michael Shadid and a group organization that was dedicated to water and power. They were from Los Angeles and the water and power group provided service to a few thousand people. In 1929 in Oklahoma, Dr. Shadid started a health care plan for the rural farmers. He had to deal with resistance from the physicians that were already working there. Dr. Shadid was determined to provide health care to several hundred families under a predetermined fee with the help from the Oklahoma Farmer’ Union (Tufts Managed Care Institute, 1998). In 1929 the organization that was dedicated to the water and power started to offer services that was similar to Dr. Shadid’s. This organization contracted two physicians, Dr. Ross and Dr. Loos to provide health care services to the families and workers of the organization using the predetermined fee (Tufts Managed Care Institute, 1998). These two physicians, after working with this organization for five years, turned around and opened up the first group practice prepayment plan, which they owned. They had many new subscribers and dependents; the cost was $2.69 per month for each subscriber (Tufts Managed Care Institute, 1998). Predetermined fees were an improvement for health care, although a physician by the name of Sidney Garfield found a way to make health care more affordable.

Managed Care
Dr. Sidney Garfield along with his associates in 1933 started providing people who worked on construction sites medical care on a prepaid basis. Dr. Garfield worked with the insurance companies; they paid him a portion of the premium that was associated with accidents. The workers were required to pay five cents from their wages for any other medical services they received by the physician or his associates (Tufts Managed Care Institute, 1998). Dr. Garfield’s health care ideals were so successful that the plan continued to grow. Dr. Garfield was asked by Henry J. Kaiser to provide health care to the Grand Coulee Dam workers. Henry Kaiser help set up health care programs on the West Coast during World War two, because he was so impressed, to take care of the shipyard and steel mill workers. Later years these services were then offered to the public (Tufts Managed Care Institute, 1998). Henry Kaiser believed that it was possible to save Americans money while still providing a comprehensive health care service. This plan became Kaiser Permanente health plan; it included both hospitals and clinics. There were a quarter of a million people enrolled in this program (Tufts Managed Care Institute, 1998). Managed care was growing and with the example of Henry Keiser’s health care plan the HMO plans were created, there were concerns on the approach of this type of care upon physicians. There...
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