Managed care is popular in many companies. It is a method of lowering healthcare costs and improving healthcare quality all at the same time. How does it do this?
One method is to have fixed, prepaid capitation rates, involves having a fixed amount set aside for healthcare. It doesn’t depend on how many claims there are; the Managed Care Organization has no obligation whatsoever to continue paying for services that month. They estimate costs based on how much has been needed in previous months.
Another method is to have specific providers they work with. These providers often agree to provide services at a lesser cost and the consistency of provider will keep unnecessary repeat tests and procedures from happening. The providers are usually primary care providers that are cheaper to see anyway. In other cases, those patients receiving certain services are required to get prior authorization from the Managed Care Organization before getting the test done.
The emphasis is on primary care physicians doing regular checkups on their patients and doing preventative management on problems that are a lot easier and cheaper to treat than when the problem is in its advanced stages. There are also financial incentives for patients who do not overuse healthcare.
Some managed care organizations do a good job of maintaining health care costs low and having a good quality of care. Some months the capitation amount will be met and in others, it will be way off the charts.
Having a limited set of providers doesn’t work for people with disabilities. Multiple specialists are often necessary for their complicated set of symptoms and conditions. Many of these will not be primary care specialists and some will, out of necessity, be out of network. Who pays for this if it is necessary?
Prior authorization for procedures might be possible if it is done in a timely manner; however, peoples’ needs vary and will have to pay out of pocket for services that are denied by the managed care organization.
While managed care is always a good thing to consider, some people are already sick and the costs of caring for them are already high. In addition, their healthcare needs are, by necessity, different from those of otherwise healthy people. Managed care organizations may not want to provide medical cover for this group of patients with pre-existing illnesses.
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