Participants of managed care structures are deprived of complete freedom of choice. Patients should resort to the services of those physicians and nurses, being members of the organizations, while the latter cannot set prices at their discretion, since it is determined as a result of agreements. Medical institutions and physicians receive only a fixed amount per insured patient, regardless of the volume of services. Concerning practical purposes, it is an attempt to minimize the level of non-reimbursable costs. It can be mutually beneficial since it does not imply additional charges on the part of the patient and stimulates medical institutions to rationalize medical and diagnostic measures; consequently, the number of patients increases annually.
MCOs offer this type of insurance based on discounted prices and employer-friendly cost minimization schemes to reduce clients’ expenses. Besides, it is possible to coordinate comprehensive health care at fixed prices. The success of their activities may be achieved through the containment of prices for services, linking doctors’ incomes with additional payments for productivity, high economic indicators, and patient satisfaction (Stadhouders et al., 2019). According to guidelines and protocols, unified requirements for various technologies for examination, treatment, and rehabilitation are also beneficial.
MCO and FFS Organizations
The FFS in health care encourages physicians to carry out more treatments, as payment is caused by the quantity of care instead of the quality. MCO operates without any competitive environment, paying for medical services only within the network, in medical organizations with which the relevant contracts have been signed. The search for rational solutions led to the fact that some insurance companies and large corporations began to acquire their medical institutions and staff. Their purpose is to actively use prepayment systems for medical services, which provided preliminary coordination of prices and volumes of medical care for different categories of citizens (Stadhouders et al., 2019). Meanwhile, consumers in vulnerable groups avoid necessary and appropriate health care due to the cost burden and inability to make informed and right choices. Reducing total costs expands the pool of potential patients in the medical services market, increasing demand volume.
Questions about a Company’s Specific Plan
The main question would be what the developed package of services can include, taking into account the specifics of a particular project. For example, can the organization provide an analysis of the market for medical services and the state of medical care in the area? The main aspects should include developing the clinic’s concept and marketing strategy, preparing a feasibility study, investment plan, and business plan. Finally, it is essential to establish systems of unified standards and protocols that regulate all aspects of the institution’s medical and administrative activities. Implementing the developed system of regulations in the institution’s work, control of correct interpretation, and compliance with standards and protocols are also necessary.
MCOs and CDHPs Impact
The overall impact of managed care is still widely discussed. It has increased efficiency, improved general standards, and led to a better understanding of relationships and quality. Studies have found that patients with CDHC were disposed to ask about the cost compared to patients with traditional plans. Besides, they tend to choose a less expensive treatment option, whereas 20% of patients with chronic diseases follow treatment plans (Stadhouders et al., 2019). Due to intense competition, MCO’s forms are created to enhance quality, searching for new products and technologies. Having a commercial insurer interested in preserving their income can reduce the volume of services through expert judgment, the medical assistance price, and the payment for the medical care itself.
Physicians play the role of producers and sellers of healthcare services, and patients play the buyers’ position. In comparison with the state one, the market form provides much more freedom to both doctors and patients. The physician’s material and social well-being depend on the initiative – on how the services he or she offers meet consumers’ demand. Competition for the consumer makes physicians interested in continually improving the care provided to clients, maintaining high professional and moral standards.
Stadhouders, N., Kruse, F., Tanke, M., Koolman, X., & Jeurissen, P. (2019). Effective healthcare cost-containment policies: A systematic review. Health Policy, 123(1), 71-79. Web.