MGEC34H3 : Summary of Lectures (Part 2)

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carminechinchilla42

18 Nov 2010

School

UTSC

Department

Economics for Management Studies

Course

MGEC34H3

Professor

Michele Campolieti

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Document Summary

Workers compensation insurance costs are rising, but not in the normal health care. Costs are higher because someone is paying for it. Constraints on physicians on what treatment they can provide. Managed care - a system in which physician practice is managed in order to address high health care costs. Managed care reduces overconsumption of health care by imposing cost control incentives (on both physician + patient) Set up a network, collection of physicians, hospitals clinics, home care to a defined population in an area. Network is clinically (quality) + fiscally (cost) responsible to treat the defined population. Fixed budget to a certain network, less profits. Contain costs + quality of care through a few mechanisms: Selective contracting payers negotiate prices + select local physicians + hospitals. Steering send enrolees to selected providers. Selective contracting + steering are unique to managed care. Utilization review can be used by all payers.

Related Questions

Managed care organizations

a) compete with each other on quality and low cost provision of services.

b) exclude health maintenance organizations.

c) exclude preferred provider organizations.

d) exclude closed-panel HMOs.

e) are often run by the federal government.

All of the following are examples of substituting cheaper forms of care for more expensive ones, except

a) prescribing a generic (vs. brand name) medication.

b) recommending chiropractic care instead of back surgery.

c) authorizing outpatient vs. inpatient surgery.

d) recommending nursing home care vs. hip replacement surgery.

e) using a physician assistant (vs. doctor) to see patients with uncomplicated health issues.

15) A physician graduates from medical school and must decide whether to take a job as a junior member of a large group practice or work for an HMO directly. For the physician, a positive aspect of working for the HMO is

a) lack of utilization controls.

b) very little peer review.

c) higher salary than with the group practice.

d) a steady stream of patients and income.

e) lower salary than with the group practice.

When it comes to attempts of managed care to control costs, cutting prices is one of the most popular methods. Which of the following is not among the valid explanations of the rationale behind this practice?

a) Price cuts would put money directly into the pocket of patients.

b) Compared to other methods, prices are easier to cut.

c) Large insurers have bargaining power to negotiate lower prices with providers.

d) When certain markets go through periods of excess supply, large insurers use it to negotiate lower prices.

e) Large insurers can threaten providers with taking the patients away unless discounts are provided.

You give birth to healthy twins. After two days in hospital, case control nurse reviews your records to determine if it is medically necessary for you to remain another day in hospital. This is an example of

a) pre-admission testing.

b) concurrent review.

c) retrospective review.

d) discharge planning.

e) database profiling.

An actuarial assistant at your HMO presents graphs and charts of the number of colonoscopies performed per 1,000 patients by each doctor in the plan. This is an example of

a) pre-admission testing.

b) concurrent review.

c) retrospective review.

d) discharge planning.

e) database profiling.

In this written paper you will complete the following:

Analyze how physicians and hospitals have negotiated service contracts with third party payers.

Discuss how fee for service versus managed care models of reimbursement have contributed risk avoidance in their contract negotiations.

Recommend future strategies for physicians and hospitals to effectively negotiate service delivery contracts. Base the recommendation on your research and readings.

The paper must be formatted as follows:

A minimum of 6

indigotrout517

PROVIDE A RESPONSE OR STATEMENT TO THIS STUDENTS DISCUSSION:

1 - Please share your experience on selecting a managed care plan. Please discuss the advantages and disadvantages of your MCO plan.

Up until about ten years ago my company offered an HMO MCO plan option managed by Kaiser Permanente. This plan was less expensive in my paycheck deduction and offered $10 co-pays for every office visit and 100% hospitalization. In 1992 as a single young man in my twenties I found this option very attractive. I ended up getting married early that year, had a flu episode and a bout of food poisoning. My wife ended up with a hospitalization as well. What looked good on paper ended up being a very restricted healthcare experience. My office visits were restricted to only one clinic where the health care professional point of contact were physicians assistants under the supervision of an MD which we never saw. All of the prescriptions were for generic medicines and when my wife was hospitalized she was not allowed branded medicines either. We also thought she was discharged too early. The advantages of this type of plan are costs and simplicity. If we had not been sick that year we probably would have signed back up for it. The disadvantages were that our level of care was reduced to a less skilled health care professional and the attending physician who cared for my wife in the hospital discharged my wife early due to a time limit the HMO had placed on the length of stay for her illness code. That was the first and last year I chose an MCO plan for my health coverage.

2 - Many argue that there is no consistent, direct correlation between the cost of care and its quality in a managed care program. Do you agree or disagree?

In my personal experience managed care plans attempt to lower the primary care contact to non MD health care professionals such as Nurse Practioners and Physicians Assistants. While these clinicians are well trained and certainly have their appropriate place in medicine, they do not have the extensive medical training that MDs and DOs spend a minimum of 8 years mastering. These clinicians cost less than MDs and are very attractive way to reduce staffing costs. As a patient however I prefer the highest skilled level clinician caring for me and my family and am willing to pay more for this higher level of care. In my opinion Kaiser Permanente may have saved money but I was not happy with the level of care and medicines provided. They may have saved money that year but they lost me as a customer. Epstein et al, (2014) compared Accountable Care Organization (ACO) patients with non ACO patients and while they found that there were many differences in spending, age, and severity of illness, there was no difference in quality metrics despite non ACO members costing more overall. It would seem that in this example costs can be lowered without affecting quality outcomes. However ACO participants had access to significantly more participating clinicians and hospitals. What is missing from this study is a patient survey comparing the satisfaction of ACO and non-ACO patients.

3 - Do you think patients' choice of provider and access to care will be limited under ACOs?

In my personal experience and through observations of managed care offices and hospitals as a pharmaceutical representative, ACOs not only restrict the choice of provider and access to hospitals they utilize lesser trained medical professionals in Primary Care, Specialty and Hospitals in addition to restricting access to branded medications. This observation is in agreement with Epstein et al, (2014) in which ACO members cost less but had less access and choice of participating access points and clinicians.

4 - In what ways can an ACO succeed in both delivering high-quality care and spending health care dollars more wisely?

ACOs can be very useful in curbing costs. For those with limited health care budgets or those patients who receive public assistance an ACO model whether public or private. However Lewis et al, (2014) found that even though there was an almost even split between ACOs contracting for private and public contracts in the U.S.A., public contracts were less profitable than private ones due to public patients costing more to manage per capita than private ones. Quality was not examined. It would seem that an ACO would be ideal when faced with limited resources but ACOs may be reluctant to engage in contracts that are less profitable.

MGEC34H3 : Summary of Lectures (Part 2)

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