Healthcare Organization Emergency Room over Utilization

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Emergency room over utilization is one of the leading causes of today’s ever increasing healthcare costs. The majority of the patients seen in emergency rooms across the nation are Medicaid recipients, for non-emergent reasons. The federal government initiated Medicaid Managed Care programs to offer better healthcare delivery, adequately compensate providers and reduce healthcare costs. Has Medicaid Managed Care addressed the issues and solved the problem? The answer is ‘Yes’ and ‘No’. Throughout the early 1980’s and 1990’s the Federal Medicaid program was challenged by rapidly rising Medicaid program costs and an increasing number of uninsured population. One of the primary reasons for the overall increase in healthcare costs is the over utilization of hospital emergency rooms. This is a direct result of not having a primary care physician and/or family doctor who is the main source of healthcare delivery for an individual and/or entire family The traditional Medicaid program does not offer, or require, recipients to choose a primary care physician like, its counterpart, Medicare. Medicare still operates under the traditional fee-for-service methodology and does not require beneficiaries to identify and primary provider as well as having direct access to specialty services. This allows a cost sharing approach which results in higher out-of-pocket expenses and does not cover drug or prescription benefits. In an effort to offer better healthcare services and access as well as reduce costs the federal government allowed the States to turn to managed care and proposed a mandatory statewide implementation for the Medicaid population. In order to make major changes like these, states have to request waivers of Medicaid regulation. It was anticipated that by contracting with capitated health maintenance organizations (HMOs) to provide services, the quality of care would improve for Medicaid populations and costs would decrease. It was also hoped that the number of uninsured people would dramatically decrease by offering Medicaid managed care coverage to low-income families and individuals that were not Medicaid eligible. These services and coverage could be delivered through the Medicaid managed care carriers and be covered by the cost savings.

States have chosen to two forms of Medicaid managed care to better deliver healthcare services besides the traditional fee-for-service Medicaid programs; primary case management and traditional health maintenance organizations. “In primary care case management, the state Medicaid agency contracts with a primary gatekeeper entity (e.g., physician, clinic) that coordinates primary and specialty care for Medicaid beneficiaries. For healthcare maintenance type programs, a State Medicaid agency contracts with an existing healthcare maintenance organization, prepaid health plan, or other institutional health care provider who, in addition to proving primary care services, assumes insurance risk of providing covered services. Typically primary case management are paid on a fee-for-service basis plus a monthly case management fee per enrollee, while health maintenance organization plans are paid a capitation rate and are at full financial risk.” (1) Once implementation of the program began, enrolling and educating the Medicaid population was one of the initial greatest challenges that were faced. Commercial managed care enrollment grew steadily in the late 1980’s throughout the 1990’s. In comparison, Medicaid’s rate of growth was initially slower and then more rapidly, as shown in the figure below. Although enrollment throughout the 1990’s slowly increased it was extremely difficult to educate Medicaid recipients in the Managed Care HMO insurance carrier rules and regulations. SOURCE: (Centers for Medicare and Medicaid Services: 2001 Enrollment Report) Results varied by State and in 1996, due to very poor outcome in voluntary enrollments. New York State was one of the first States that...
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