Top-Rated Free Essay

Evolution of Managed Care

Better Essays
Running head: EVOLUTION OF MANAGED CARE

Evolution of Managed Care
Name
University of Phoenix

Evolution of Managed Care Managed Care refers to a program that evaluates, coordinates and makes possible the care of individuals without the full financial risks involved. The goal of managed care was to meet the needs of select group of individuals and families by arranging their health care needs. One example would be employees or individuals paid a set fee to physicians for their services. These fees were set even before any services were rendered so the individual knew what the cost was going to be. Often times an organization would contract care for a certain physician controlling the cost of what the fee would be for their services. The evolution of managed care can be traced back to the early 19th century. Over the years there have been many changes to the managed care system to meet the needs and demands of the health services needed. With all the new changes that have taken affect the manage care system has rapidly grown. Through out this paper I will explain where, what and how managed care has changed to meet the needs of individuals. In 1929, Dr. Michael Shadid was considered to be the first managed care pioneer. He started a cooperative health care plan in rural Oklahoma (AMCRA, 1994). With the help from Oklahoma Farmers Union he enrolled several families who paid a predetermined amount and delivered care to these individuals. In 1929 another organization in Los Angeles offered the same service as Dr. Shadid. The Los Angeles Department of water and power contracted two doctors to offer their services to these individuals. Dr. Ross and Dr. Loos provided care for the workers and families of said organization. After 5 years these doctors opened, owned and controlled the first group practice (AMCRA, 1994). Around 1933 a Dr. Sidney Garfield and associates started providing medical care on a prepaid basis for workers on a construction project. Workman’s compensation insurance company paid a percentage of the premium income for these accident cases; workers contributed 5 cents from their wages for medical services. This same program was also used by Henry Kaiser in 1938. At the end of World War two, Kaiser opened his comprehensive health services to the public. Kaiser believed he could make it possible for millions of Americans to have comprehensive health services at a price they could afford (Firshein, J. 2009). In the late 1950’s two other types of managed care programs were introduced. The first program being individual practice association (IPA), this program was contracted with individual physicians or single specialty groups to provide care. These physicians would provide services at their offices that were enrolled in that type of program. These physicians were able to continue to see other patients that were not under the contract but were reimbursed differently. The second program was the network-model HMO and was contracted with one or more large multispecialty groups (Firshein, J. 2009). These network providers are reimbursed by capitation and receive a fixed monthly payment per person. In 1963 the Kaiser organization had reached the 3 million member mark. Two more states became involved with Kaiser’s organization; these states were Colorado and Ohio. Due to the rapid expansion with managed care in 1973 the HMO act was facilitated. This act was facilitated to help the federal government to provide comprehensive coverage and control costs. With that act loans and grants were provided to start and expand the Health Maintenance Organization (HMO). This act required company’s who had more than 25 employees to offer HMO plans along with other traditional insurances options. This was known as the dual choice provision. At this time HMO’s had basic requirements they had to provide to individuals. They had to offer a specified list of benefits, have the same monthly premium, and be structured as a non-profit organization. In 1995 the dual choice provision expired due to the rapid increase in HMO’s being so widespread (MCOL, 1995). By 1995 the total numbers of people enrolled in HMO plans were 50.6 million, in 1999 the memberships reached 81.3 million and in 2000 a slight decline was noticed to 80.9 million. With the dual choice provision in 2004 the HMO memberships total was 68.8 million and PPO membership total was 109 million. These totals are due to the changes that started taking affect with managed care (MCOL, 1995). In the last few years managed care has had three dramatic changes. The first change is with the managed care model. The HMO-model has been growing at a slow pace and the IPA model has grown rapidly. Half of the people who are on managed care have the IPA plan. With the rapid growth of HMO’s two new programs were developed to help the growth expansion. The first plan that was developed is the preferred provider organization (PPO’s). The PPO managed care plan contracts with a network provider for a discounted fee-for-service basis. This plan offers the enrollees financial incentives to use this plan. With this plan out of network services are costly and at times are restricted. The second plan that was developed is the point-of –service plan. This plan allows enrollees to choose either in or out of network providers when care is needed. However, the enrollee has to pay substantial co-pay for out of network services. The second major change that took affect was in the mid-1980. At this time the managed care industry went from being predominantly non-profit to being for-profit. The for-profit entities started out slow with only 18% in 1982 and by 1988 the percentage rose to 67%. The ownership of managed care plans changed during this time from hospital and health care providers to insurance companies and investors. The last major change was state governments used managed care as the solution to the rising Medicaid costs and the uninsured. During 1983 thru 1993 the percentage of Medicaid patients drastically increased form 1 to 15 percent. Many states are working to convert the Medicaid program into managed care programs. By converting to managed care programs this could help relieve some of the rising costs with Medicaid.

References: AMCRA Foundation Managed Health Care database (1994). The Basics of Managed Care. Retrieved July 28, 2009. From: http://aspe.hhs.gov/Progsys/Forum/Bascis.htm

Firshein, J & Sandy, L. The Changing Approach to Managed Care (2009). Retrieved July 29, 2009 from: www.rwjf.org?files/publications/books/2001/Chapter_04.html

MCOL. Positioning you for change in healthcare (1995) .Managed Care Fact Sheet. Copyright 2009. Retrieved July 26, 2009 from: www.mcol.com

References: AMCRA Foundation Managed Health Care database (1994). The Basics of Managed Care. Retrieved July 28, 2009. From: http://aspe.hhs.gov/Progsys/Forum/Bascis.htm Firshein, J & Sandy, L. The Changing Approach to Managed Care (2009). Retrieved July 29, 2009 from: www.rwjf.org?files/publications/books/2001/Chapter_04.html MCOL. Positioning you for change in healthcare (1995) .Managed Care Fact Sheet. Copyright 2009. Retrieved July 26, 2009 from: www.mcol.com

You May Also Find These Documents Helpful

  • Good Essays

    Evolution Of Managed Care

    • 266 Words
    • 2 Pages

    The introduction of managed care in the US health care delivery system has impacted both patients, physicians and providers from an economic stand point. This health care system has undergone changes while continuing to evolve because providers set criteria to monitor the type and quality of care patients receive. From a patients perspective, managed care helps control costs when a client contracts a particular provider at a reduced rate. According to a Michigan Family Review by Conklin (2002), “debate…

    • 266 Words
    • 2 Pages
    Good Essays
  • Better Essays

    Evolution of Managed Care

    • 1519 Words
    • 7 Pages

    Evolution of Managed Care HCS/235 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…

    • 1519 Words
    • 7 Pages
    Better Essays
  • Better Essays

    Managed Care

    • 915 Words
    • 4 Pages

    Managed Care Managed care refers to a method of healthcare that strives to restructure health services, as well as ensuring cost-effective healthcare. This kind of care aims at ensuring a definite benchmark of care, extent of performance, and cost management. It guarantees this by ensuring a thorough supervision, monitoring, as well as counseling. Moreover, certain sorts of managed care programs aim to support members to live healthy by preventing diseases. Ideally, managed care covers partly or…

    • 915 Words
    • 4 Pages
    Better Essays
  • Better Essays

    Managed Care

    • 3374 Words
    • 14 Pages

    There are so many problems with our society's health care. Everyone wants to find a solution, but no one has been able to come up with one yet. Many different things have been tried, but none have put a cease to the exorbitant costs, which most believe to be the main problem. Out of everything tried, the most recent and popular system is known as managed care. Managed care is the most common form of health insurance in the United States, and provides more a cost efficient coverage…

    • 3374 Words
    • 14 Pages
    Better Essays
  • Powerful Essays

    Managed Care

    • 4818 Words
    • 20 Pages

    At the Intersection of Health, Health Care and Policy Cite this article as: E Friedman Managed care, rationing, and quality: a tangled relationship Health Affairs, 16, no.3 (1997):174-182 doi: 10.1377/hlthaff.16.3.174 The online version of this article, along with updated information and services, is available at: http://content.healthaffairs.org/content/16/3/174.citation For Reprints, Links & Permissions: http://healthaffairs.org/1340_reprints.php E-mail Alerts : http://content.healthaffairs…

    • 4818 Words
    • 20 Pages
    Powerful Essays
  • Good Essays

    Managed care

    • 906 Words
    • 4 Pages

    MANAGED CARE Managed health care is a system of health care delivery managed by a company aiming mainly at quality/value cost effective services provided to patients. It has been introduced with an intention to avoid paying for unessential facilities and services directly to physicians. It helps in forming an intermediate between patients and physicians in such a way that health insurance organizations pay the physicians from the premiums paid by patients to insurers for the services provided…

    • 906 Words
    • 4 Pages
    Good Essays
  • Best Essays

    Managed Care

    • 2804 Words
    • 12 Pages

    Managed Care Brooke McMichael University of Scranton Abstract This paper examines the benefits and issues with managed care. The benefits include patients receiving preventative care, lower premiums, lower costs of prescriptions, fewer, unnecessary procedures, and less paper work. Some issues with managed care include limitation on doctors that patients can choose from, restricted coverage, the possibility of under treatment, and compromised privacy. Managed care effects nursing by causing significantly…

    • 2804 Words
    • 12 Pages
    Best Essays
  • Better Essays

    Managed Care

    • 1408 Words
    • 6 Pages

    Running head, MANAGED CARE Cynthia Norris Ashford University Tricia Devin MHA 614: Policy Formation & Leadership in Health Care Organizations Sunday, July 28, 2013 The focus on this paper is to show how analyzed research on managed care and, the issues of rising exposure to health care costs is threating the…

    • 1408 Words
    • 6 Pages
    Better Essays
  • Better Essays

    Managed Care

    • 1382 Words
    • 6 Pages

    States of America, and they all need effective, affordable and accessible health care coverage and services. Within decades, the scope and cost of health care has changed dramatically with increased complexity and significance to the healthcare market. The purpose of this paper is to analyze the managed care industry and examine how organizations try to control costs. Managed Care Organizations is a partnership of health care providers whose purpose is to contract with an institution (Crosson & Tollen…

    • 1382 Words
    • 6 Pages
    Better Essays
  • Good Essays

    In the world of the health care industry, health care providers have become progressively reliant on managed care contracts with managed care organizations to promote their facilities. A strong component needed for any managed care contract is the provider’s compensation for services. First, the contract should vividly discuss how and when the provider receives payment. Also, the provider should have a clear understanding of the managerial requirements for submitting claims and the timing of getting…

    • 150 Words
    • 1 Page
    Good Essays