What Is Managed Care and How Did It Come Into Being.

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The manage care we know today began to form in the 19th century when a series of alternative healthcare arrangements appeared across the country. These programs forms with the purpose of providing healthcare service in return for a premium payment of $0.50 and it was available to lumber mill owners and their employees. Later in 1929 another program was found by Dr. Michael Shadid, who started a rural farmer ‘cooperative health plan in Elk City, Oklahoma where selected farmers invested $50 on shares to race money to build a new hospital while receiving discounts on medical care. The medical community opposed to these new and about 1932, the American Medical Association started to do whatever it could to suppress the growth of prepaid plans and cooperatives. Nevertheless in the middle of the Great Depression health plans such as Blue Cross and Blue Shield as well as HMOs, began to function. Providers wanted to maintain and improve patient revenue; employers started seeking benefits for their employees, consumers seeking access to improved and affordable health care, and even a housing lending agency seeking a reduction in the number of foreclosures. Many new HMO groups arose as a result, examples are the Kaisers Foundation Health Plans found in 1937 as the request of Kaiser Construction Company, the Health Insurance Plan of Greater New York found in 1947, home Owner’s Loan Corporation organized the Group Health Association to reduce the number of mortgage default by families who had large medical expenses. For a little over a decades, prepaid healthcare remained present in only few communities. But around 1970 HMOs began to expand at a fast rate. During the early years of Nixon administration, Dr. Paul Ellwood, an MD from Minneapolis, was asked to create a strategy to stop or diminish the increase in the Medicare budget. This led to the development of health maintenance organizations intended to reimburse HMOs for Medicare beneficiaries’ health care though a...
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