Managed Care

Managed Care

• In the broadest terms, Kongstvedt (1997) describes managed care as a system of healthcare delivery that tries to manage the cost of healthcare, the quality of that healthcare and access to that care.

Characteristics of Managed Care

• Managed care is a system that integrates the financing and delivery of appropriate medical care by means of:

1. Contracting selected MDs & hospitals to furnish comprehensive care

2. Setting a predetermined monthly, premium fee for services,

3. Incorporating financial incentives to encourage patients to use only resources in the plan.

4. Having physicians assume some financial risk for their work --thus the role changes from advocacy to allocation (gatekeeper), and

5. Monitoring health care providers for quality assurance and utilization management.

Characteristics of Managed Care Plans Versus Traditional Indemnity Insurance

CharacteristicIndemnity

Insurance

Managed

Care

Regulated by State Health Insurance Commission Member arranges for own health care services including use

of specialists

Member may be required to pay for health care and submit

claim for reimbursement

Staying solvent and providing a community benefit (not for

profit) and/or providing a return to shareholders (for profit)

Develop, disseminate and monitor use of clinical practice

guidelines

Use of payment models other than just reimbursement for

health care services delivered

Include coverage for preventive or screening services such as

immunizations or pap smears

Mandated annual reporting on quality, satisfaction and impact

related to health care services

Characteristic Description

Care of a defined

population

· Population defined as the enrolled members at any point in time.

· Responsibility for acute services, preventive services, and ultimately the health status of this population.

· Focus on continuum of care rather than episodic visits.

Fixed budget · Health plan must provide all necessary services within the established per member premium amount or absorb the losses for each enrollment period.

· Health plan may not increase premiums within an enrollment period.

Evidence-based

clinical guidelines

· Goal is to reduce unnecessary practice variation and define the expected patterns of care.

· Guidelines are not absolute and providers may deviate from a guideline for individual patients as appropriate. Documentation of variation is provider's responsibility.

· Guidelines generally taken from specialty societies or governmental agencies and define recommended approaches to diagnosis and treatment of a specific condition.

Common characteristics of managed care plans

Characteristic Description

Disease

management

· Goal of program is to improve quality of care and control costs for specified disease state such as asthma, diabetes, or heart failure.

· Focus on improving member education to maximize self-care, monitoring, and early recognition of exacerbation.

· Provide support to health care providers in terms of clinical guidelines, disease registries, formal data collection and reporting and outcomes assessments.

Explicit quality

measures

· Us laws required all plans seeking accreditation through National Committee on Quality Assurance (NCQA).

· Employer groups and government purchasers may request specific quality monitoring and reporting.

· Member satisfaction surveys required by NCQA/purchasers.

Strong primary

care role

· Members choose or are assigned to a primary care physician and become a part of his or her "panel."

· PCP acts as a gatekeeper if his/her approval is required for referrals, tests, treatments or hospitalizations.

· Held accountable for members obtaining recommended preventive services and screenings.

Financial

incentives

to providers

· Some providers "capitated;" receive a fixed fee per member per month

· Fraction of the total payment may be withheld until the end of the year. Distribution of withhold amount may be dependent on meeting quality, financial or utilization targets.

Common characteristics of managed care plans

Differences Between Managed Careand Fee-For-Service Coverage

• The most important characteristic that distinguishes managed care from other forms of health insurance is the active influence on medical decision-making through:– Dissemination of clinical guidelines, – Pre-authorization programs for referrals,

admissions, and diagnostic testing, – Creation of limited provider networks whose

members agree to adhere to the practice standards developed by the plan.

Managed Care Organizations (MCOs)

• MCOs are formal arrangements whereby distinct organizations are made responsible for managing a network of services and supports and are accountable for network performance.

• These operational responsibilities are separate and distinct from the policy-level responsibilities of the public agency charged with governing the system.

• As a rule, managed care organizations are responsible for keeping spending within established limits.

Managed Care Organization Continuum

• Managed care plans are sometimes described as either loosely or tightly managed, indicating how much they actually manage the care of their members.

Managed Care Organization Continuum

• A loosely managed program might allow a member to:– Receive specialty care without approval

from his/her PCP,– Seek care from a physician who is not part

of the plan’s network and have the care at least partially paid for by the plan benefit,

– Obtain care at urgent care centers without preauthorization.

Managed Care Organization Continuum

• A tightly managed program however, would require a member to:– Select a PCP from providers affiliated with

the health plan,– Seek routine care from his/her PCP,– Seek prior authorization for

urgent/emergent care that is not life threatening,

– Request referral for specialty care services from his/her PCP.

Managed Care Continuum

Use of Managed Care TechniquesLess More

TraditionalIndemnity

Health Plan

Traditionalwith Cost

ContainmentPOS PPO HMO

Thank You !

Any Question ?