Pros and Cons of Managed Care in America

Introduction3

Definition of Managed Care3

Background3

History of Managed Care in America3

Literature Review4

Managed Care Networks4

Types of Managed Care Plans5

Health Maintenance Organizations (HMOs)5

Preferred Provider Organizations (PPOs)5

Point Of Service (POS)6

Challenges & Problems Analysis6

Advantages of Managed Care in America6

Disadvantages of Managed Care in America7

Implementation8

Effect of the new Health Care Reform on Managed Care8

Summary9

References10

Pros and Cons of Managed Care in America

Introduction

Definition of Managed Care

Managed care is a system of delivering health care to people at reduced cost through a network of health care providers. Managed health care plan deals with all aspect of health care for the enrolled member in the form of medical services, prescribing drugs to the patients and behavior related health services (LaTourette, 1997).

Enrolled members in managed health care are required to select a primary care physician PCP of their choice from the directory or website provided by the managed healthcare. Service provider is authorized to limit the services provided to any member. Restrictions are ordained through strict policies. Each member is required to get recommendation from his physician in order to avail any particular treatment. Bonuses are given to the providers who do their job sincerely restricting services and cutting down cost. If the health care providers are seen not abiding by the rules they are in a vulnerable position of being dropped out of the job due to double dealing. Managed care organization is also required to evaluate all the services and payment for any unnecessary service being consumed (Jecker, 2011).

Background

History of Managed Care in America

Health maintenance organization's existence in the United States can be traced back since the late 1800s. Michael Shadid, a physician in Elk City Oklahoma, is known to have lain down the basis of Managed Care in United States. He began with providing health related services to a small community of farmers, who were deprived of medical facilities or good doctors nearby their whereabouts. He raised money by selling shares to launch a local hospital and formulated a fee structure to cope with the expenses associated with providing health care facility. Soon by 1934, the staff had a support of 600 families including DR. Shadid himself, a dentist and four newly hired Specialists. Further in it, two physicians from Los Angeles, Donald Ross and Clifford Loos got engaged with the prepaid bond of health care plan to service 2,000 employees in a local water company at reduced cost (Nu-Kau, 2013).

In 1973, Health Maintenance Organization Act contract was signed. Federal aid for HMO development was increased by the amendment made by congress. From 1980 to 1989, HMO saw a boom in recruiting new members to it which was from 9million to 36 million. About 95% of all the privately running insurance company had dealt with managed care plan. By 1990's, measures were took by the government to merge Medicare and Medicaid plans with Managed Care (Nu-Kau, 2013).

Literature Review

Managed Care Networks

Providers, hospitals and medical suppliers are three main bodies connected with one another inside a managed care ...