Managed Care Essay

Managed care is a part of American healthcare system. Managed care became very popular in the Reagan era. This system was originally used in order to control Medicare payout. Medicare became the only state governmental health insurance program. It covered all people over 65 years and provided them a number of free medical services. So, managed care was used in order to control Medicare payouts. There are a big number of health insurance programs, which are used for managed care. Managed care is originally designed in order to reduce the costs of unnecessary health care. This result is achieved with the help of different mechanisms, such as economic incentives aiming to make physicians and patient choose cheaper forms of medical care; special programs, which check up the necessity of some specific services; control over the length of treatment; cost sharing incentives for outpatient surgery and many others. These kinds of programs can be provided by different organizations, such as Preferred Provider Organization of Health Maintenance Organizations.

Managed care assumes that health care organizations make arrangements with doctors, hospitals and other provides or medical service themselves. In the middle of 1990s there was noticed a decline of managed care. There are many factors, which influenced this situation but economical factors caused the strongest influence (Reinhardt). Managed care originally developed under the influence of recession, which took place in 1990s. Karim Habibi, a director of the managed care at the Hospital for Joint Diseases Orthopedic Institute in New York City states that “During that period, employees were concerned about losing their health care coverage. Employers were successful in reducing health care expenditures by controlling health care demand, which was achieved by restructuring health benefits and limiting employees’ health care supply” (Habibi). Designed originally as means to control medical costs, managed care failed to perform this function. In the 1990s employers significantly reduced guarantees and medical care insurances, provided by the organizations to its employees. During this time the Health maintenance organization appeared. This organization was designed as means to reduce the medical costs. This result was achieved through the use of aggressive utilization programs. “That, coupled with aggressive managed care utilization programs, enabled HMOs to flatten health care increases between 1993 and 1997” (Habibi). Such a policy resulted in a confrontation between patients, health care providers and payors. The situation resulted in crises, when several states enacted the health care bill of rights. This bill was aimed to defend the rights of the patients. According to some main points of this bill, patients had the rights to know about all possible variants of treatment and could not be refused necessary health care without the considerable reasons. So, all efforts to reduce medical spending, which were successful in the 1990s does not work any more. Starting from the 1998 the medical costs grow considerably, and there are several reasons for such a growth. Growing costs of drugs, technological advances in the field of medicine, and inflation are among the main reason of these growth.

Since this tendency is going to grow, most probably we can speak about the reduce of the importance of managed care. Most probably it will not gain such power as it used to have in the 1990s. Nowadays we can speak about the decrease of its importance. At the present moment consumer of the medical services choose plans, which are more suitable for them. Preferred provider organizations and points of service plans provide them kind and quality of services they like best.


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