Managed Care: Defragmenting Health Care?

1
Managed Care Defragmenting Health Care?

• HCA 701
• U.S. Health Care System

2
What is managed care?

• An organized effort by health insurance plans and
  providers using financial incentives and
  organizational arrangements to alter provider and
  patient behavior so that health care services are
  delivered and utilized in a more efficient and
  lower-cost manner.

3
Objectives of managed care

• Enhanced cost containment
• Some forms of rationing
• Promote administrative an clinical efficiency
• Reduce duplication of services
• Enhance appropriateness of care
• Promote comprehensive contracting mechanisms
• Manage care processes by managing provider
  consumer behavior

4
Components of Managed Care

• Purchaser/payer, including
• Employers who purchase health insurance for their
  employees
• The federal Medicare program
• Federal/state Medicaid program
• Health insurance plans providers of care
• Patients/public
• Brokers

5
Types of Managed Care Plans

• Preferred Provider Organization
• Health Maintenance Organizations
• Point of Service Plan

6
PPO

• A fee-for-service type of health plan giving
  broader choice of providers or a narrower choice
  of providers at a discounted rate
• the larger the plan the greater the discount.
• providers count on plans members to use them for
  services to help offset the discounted rate.

7
HMO

• A prepaid health plan delivering comprehensive
  care to members through designated providers
• Fixed monthly payment for health care services
• Requires members to be in a plan for a specified
  period of time (usually 1 year).
• Patients restricted through financial incentives
  to use only providers in the plan.
• Out of network use results in high co-payment
• Limited choice of providers take responsibility
  for a list of enrolled patients.
• Providers are paid a capitation rate based on a
  fixed fee per patient
• A method of payment for health services in which
  the provider is paid a fixed amount for each
  patient without regard to the actual number or
  nature of services provided.

8
Benefits of HMO

• Benefit to health plan provider limits
  financial exposure by paying the provider group a
  fixed amount for taking care of the enrolled
  population. Plan is not required to pay any
  additional fees for care.
• Provider benefit steady stream of revenue
  whether individual patients seek care or not.
• Patient benefit low or no co-payments,
  deductibles or other payments.

9
Point of Service Plan

• Combination of HMO and PPO
• Provides advantage of allowing patient to go
  beyond normal HMO providers for specialized
  services

10
Critical Components for MC

• Preparing and educating covered members
• Information systems and insistence on quality
  outcome measures
• Plan/Provider Control of Utilization
  controlling provider and patient behavior
• Use of gatekeeper (primary care physicians and
  hospitalists)
• Capitation
• Risk sharing - establishing a pool of money from
  which services are paid throughout the year.
• Intended to provide an incentive to reduce use
• Concerns arise if risk pools and capitation
  reduces needed services to patients
• Contracting

11
Future of Managed Care

• Consolidation of Health Insurance Plans
  consolidation is rapidly taking place among MC
  plans either through mergers or buyouts.
• MC has led to a growth of new organizational
  arrangement among providers.
• Medicare/Medicaid and Managed Care
• Medicaid programs are rapidly moving towards
  managed care.
• Mental Health and Managed Care MC is increasing
  at an explosive rate. Use of triage systems to
  better align patients into their proper care
  categories.

12
Medicaid Waivers Managed Care Growth

• Managed care programs seek to enhance access to
  quality care in a cost-effective manner.
• Waivers provide States greater flexibility in
  design and implementation of Medicaid managed
  care programs.
• The number of Medicaid beneficiaries enrolled in
  some form of managed care program is growing
  rapidly, from 14 percent of enrollees in 1993 to
  58 percent in 2002.

13
Medicaid Managed Care Program Successes

• Managed care is the prevalent delivery system in
  Medicaid, with 59 percent of beneficiaries
  receiving some or all care through managed care
  instead of fee-for-service.
• Forty-eight states, the District of Columbia and
  Puerto Rico operate Medicaid managed care
  programs, with about 23.1 million beneficiaries
  enrolled in 2002, an increase of over two million
  since 2001.
• Enhancing access to providers and emphasizing
  preventive and routine care, health plans have
  successfully improved the quality of care
  received by enrollees in the Medicaid managed
  care program.

14
Medicaid Managed Care Program Goals

• Establish a medical home for Medicaid clients
  through a Primary Care Provider (PCP)
• Emphasize preventive care
• Improve access to care
• Ensure appropriate utilization of services
• Improve health outcomes
• Improve quality of care
• Improve client and provider satisfaction
• Improve cost effectiveness

15
Disease Management

• Treating chronically ill through integrated teams
• Acute illness prevention
• Requires understanding the factors that drive
  costs.
• Uses data about available resources and analyzing
  choices that affect the quality and cost of care.
• Understanding processes of medical care improves
  clinical results and produce and lower overall
  costs
• Assigns the appropriate provider manage patient
  care which can improve quality and
  cost-effectiveness.
• Encourages the use of a specialist as gatekeeper
• Changing patient behavior

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Components of the Disease Management Process

• Access and demand management
• Reduction in variation of care through clinical
  process involvement.
• Attention to service quality and patient
  satisfaction.
• Outcomes Driven Care.
• The disease management provider team for
  treatment of diabetes
• Masters level nurse educator/CDE - Team Leader
• Specialist
• Primary care physician
• Registered Dietitian/CDE
• Exercise Physiologist