Managed Care and Nursing

Afza.Malik GDA

Nursing and Manages Care

Managed Care and Nursing

What is Managed Care,Managed Care and Health Care,Types of Managed Care,Types of Managed Care

What is Managed Care

     The health care industry has experienced a dramatic transformation over the last 50 years. After World War II, American health care witnessed an unprecedented growth. 

    With the advent of social programs such as Medicare and Medicaid, the number of Americans with access to health care increased as did the number of health care professionals and hospitals. 

    The demand for health care with a traditional payment fee-for-service resulted in insurers passively reimbursing for what was charged. This fact, coupled with emerging technology, resulted in increased health care utilization and cost of care (Light, 1991; Robinson, JC, 1995).

Managed Care and Health Care

    The term managed care has been broadly defined as a system that provides health care at an acceptable level of quality and cost (Kirk, 1997). Specifically, it is the combining of a prepaid, capitalized payment for health insurance with group medical practice as the means of delivery of services (New Brander & Eichler, 2001). 

    Physician and hospital payments are made through an agreed upon capitated reimbursement. 

Benefits of Managed Care

    The benefits of managed care include the spreading of risks, since premiums are prepaid by large populations; a focus on prevention with a wide range of services; and the performance of case management (preauthorization, utilization services, and discharge planning). Four basic forms of managed care organizations (MCOs) exist.     

These include health maintenance organizations (HMO), preferred provider organizations (PPO), exclusive provider organizations (EPO), and point-of-service (POS). 

    Prior to the 1960s only a few MCOs existed, such as Community Hospital Association of Elk City, Oklahoma (1929) and Kaiser Foundation Health Plan in California (1942). MCOS became prominent in the 1970s to inhibit cost inflation. 

    Peer review, rate setting, and passage of certification of need legislation was also instituted to decrease costs. Today purchases of health care have become active price setters of health services and surveyors of quality care instead of passive negotiators.     

By 1996, over 25% of the US population, 67 million people, were enrolled in some form of managed care. Today more than 50% of insured individuals are enrolled in an MCO.

Types of Managed Care

    As MCOs have proliferated so has the type and amount of related research. Initially research efforts focused on variations in health services provided throughout the United States ( Wennberg & Cooper, 1999). 

    Currently managed care researchers explore such issues as cost, quality, and the impact of MCOS on the health care environment. Theories such as the principle/agent theory (Buchanan, A., 1988), and social exchange theory (Blare, 1964) are used to explain the behaviors and outcomes of individuals in the health care system. 

    The emerging work environment will include a continued focus on quality and decreased costs. Managed care will heighten the need for preventive services offered in community agencies. Additional research should be conducted that substantiates the positive cost/quality ratio.

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