The Future of Managed Care

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The Future of Managed Care

The health care system is broken. This is a statement that can be heard in physician offices to the halls of Justice. Costs are soaring, while Americans' life expectancy and infant mortality rates rank 29th and 30th in the world, respectively (Zakaria, 2012). Traditional health care focused on allowing consumers to choose health care providers and services. Managed care was developed in the United States as a way to control health care costs by controlling the delivery system. It started with organizations like Kaiser Permanente who worked on employing physicians and healthcare providers directly, to better manage costs. Managed care plans in the private health insurance industry control costs by restricting access to specialists, reducing unnecessary hospitalizations, and focusing on well care. In addition, managed care plan force providers to discount their rates, thus spurring consumers to visit particular "in plan" physicians. These restrictions on medical care and services have resulted in patients fearing a lower quality services and less access to care.

In 1984, only five percent of insured Americans were enrolled in a managed care plan, this figure jumped to 50 percent in 1993, and to 90 percent currently (National Conference of State Legislatures, 2011). Consumers were enticed to take part in managed care plans as a way to save money on health care, presumably due to more efficient delivery and better oversight. Yet, health care spending continues to rise each year. Experts suggest 20 to 30 percent of American's health care spending is wasteful, redundant or inefficient (American Health Insurance Plans, 2012). Traditional methods failed to rein in costs, so now managed care plans are more prevalent.

Managed care organizations are concerned with cost-effectiveness and saving money. To reduce costs, these organizations buy services in bulk, for many members at a time, thus securing lower prices. Managed care organizations reduce costs by limiting choices to the members, providing a list of preferred doctors and labs where tests can be performed. Managed care organizations control the process further by limiting doctors control of prescribing tests and certain medications. Different mandated care plans have different restrictions on choice.

The impact of these models affects specific populations based upon their interaction with the system, in regards access to care, quality, and costs. The older population is anticipated to "increase to 55 million in 2020 (a 36 percent increase for that decade)" (Administration on Aging, 2012). Currently, according to the U.S. Department of Commerce (1997), one in five Americans have some kind of disability and one in ten have a server disability. Both of these factors increase the need for medical services. In the past, patients enrolled in traditional health care plans chose their own physicians, and seek treatments without limitations. Insured patients are reimbursed the amount that the insurance company feels appropriate, regardless of the amount billed. The patient pays the difference until a certain amount is reached.

Graham, Kurtovich, Ivey, and Neuhauser (2010) point out the impact of the choice between the two models for seniors and people with disabilities. The authors utilized a cross-sectional telephone survey to compare perceived access to care, satisfaction and quality of those who had voluntarily enrolled in managed care Medicaid and those who had remained in traditional cost/reimbursement models. Concern was initially expressed by the authors regarding this population's need for special care due to their high needs, however, there was little evidence to support a reduction in care. Those participants who switched to managed care Medicaid were more ...