Question

Answer the following questions
Managed Care was created in an attempt to control the cost, quality and access to health care.  Some would argue this has been
accomplished, while others would disagree.  Complete the below in an attempt to support that this triple aim of health care is
underway.

Cost:
Identify on method/structure technique that Managed Care plans use in attempt to control cost
Identify one strength/success and one weakness/failure of that method/structure/technique
Propose an original idea that may be used by MCOs to achieve the goal of controlling cost

Quality:
Identify on method/structure technique that Managed Care plans use in attempt to improve quality
Identify one strength/success and one weakness/failure of that method/structure/technique
Propose an original idea that may be used by MCOsto achieve the goal of improving quality

Access:
Identify on method/structure technique that Managed Care plans use in attempt to improve access
Identify one strength/success and one weakness/failure of that method/structure/technique
Propose an original idea that may be used by MCOs to achieve the goal of expanding acces

Answer 1

Cost Control

With health‐care costs increasing, health insurance providers are looking for ways to reduce costs. Traditionally, patients paid for most medical care on a fee‐for‐service basis, where physicians, laboratories, and hospitals charged set fees for procedures. Patients either paid the fees directly or paid a partial fee with a private insurance company paying the remainder. The patient and his or her employer shared the cost of premium payments to the insurance company. Such systems do not typically cover serious illness, or if they do, insurance companies substantially raise premiums for the individual and the employer.

Until the last decade or so, most traditional insurance plans covered serious illness but not routine care. Blue Cross had separate plans for doctor visits and hospitalizations. In most plans, patients would pay the cost of check‐ups and preventive testing. Insurance covered costs associated with a diagnosed illness and with hospitalization. “Gold‐standard” plans, such as those held by the Auto Workers and Steel Workers, covered virtually everything. This system did not promote wellness, however, as many patients whose plans did not cover routine doctor visits and minor illnesses did not go for checkups and preventive tests. If you didn't have a lump, insurance did not pay for a mammogram; the patient did and the cost was prohibitive. But most people who had insurance were covered to some extent (mostly 80 percent insurance, 20 percent patient, until the patient reached a set limit).

HMOs were set up to approach health from a wellness perspective rather than a disease perspective. HMOs believed you could save money and lives by getting regular checkups and treating illnesses in their earliest stages, where the costs were lower and the prognoses better. Some argue that the current HMO system, which expects insurance to pay for wellness and illness, increases costs by encouraging visits for minor illnesses that a patient would forego if he had to pay the bill. Most hospitals at the time were nonprofit or not‐for‐profit, so the expectations of high profits based on holding down costs were not part of that system, though “profits” were indeed made. The requirements of remaining nonprofit funneled most of these profits into new programs or expanded facilities.

In response to this situation, managed care organizations emerged as nonprofit organizations to reduce health‐care costs and provide broader coverage. Managed care organizations are groups of physicians, specialists, and often hospitals, coordinating with each other to provide care for a set monthly fee. These systems control the patient's access to doctors, specialists, laboratories, and treatment facilities. HMOs hire physicians as salaried employees rather than paying them on a fee‐for‐service basis. In this system, the medical clinics receive the same amount of money regardless of how frequently patients see the doctor. Because no connection exists between services rendered and fees paid, the incentive is to keep costs down. Critics of this system point out that business managers or non‐medical personnel trying to hold down costs frequently overturn medical decisions made by doctors.

Quality Control

Six Sigma is a synonym for a process improvement strategy that focuses on eliminating defects. What is a defect? Everything that does not meet customer requirements – staying in the hospital one day longer than required, a mistake during a surgical procedure, or excess wait time when being admitted to the hospital. A process capable of Six Sigma performance is equivalent to the occurrence of 3.4 defects per million opportunities – a stretch goal for virtually every business process. Airlines are one of the few businesses that have mastered this level of quality when it comes to having an equal number of takeoffs and landings. However, when it comes to on-time departure, their performance is less impressive. By measuring the capability of a process to meet customer needs, Six Sigma provides a framework to identify processes that could benefit from improvements.

When it comes to deployment strategies, there are more similarities than differences when comparing healthcare organizations to other businesses. The overall approach to deployment in healthcare will have the same components seen in any other organization, such as:
• Conducting an assessment up front to evaluate status and opportunities
• Mapping core value streams and identifying the performance measures that need to be improved
• Launch: training the resources and starting projects
• Maturity and sustainability: project monitoring, expansion, and integration into the organization

Yet as with the application of lean Six Sigma methodologies, there are differences in the deployment details for healthcare organizations that have proved to be challenging if they are not addressed directly.

However, the benefits of Six Sigma extend far beyond reducing cost or increasing efficiency:

• By using a common scale that is based on customer needs to measure and evaluate every process in a business, Six Sigma provides senior management with an effective way to manage performance for such distinctly different processes such as transplanting organs, registering patients, filing claims, or purchasing sutures.
• The focus on reducing variation is particularly important for the healthcare industry, where every physician deploys a different process. The inherent variation in these processes make it difficult to achieve consistent standards of care and oftentimes prevents employing scientific thinking to identify the one best way. The sophisticated statistical techniques in the Six Sigma toolbox can help to identify best practices and, coupled with the ability to manage change, help achieve substantial improvements when it comes to clinical processes.
• Consolidation in the healthcare industry has led to the formation of large hospital chains. However, few organizations have been able to transcend organizational legacies. As a result, few have gone further than establishing a common accounting system. But what about being able to look at similar processes across different organizational units – such as hip surgery – and being able to replicate the most effective approach across the entire chain? The Six Sigma methodology provides a common language to understand differences in processes and make informed choices about which approach is the best.

Access COntrol

Throughout the U.S, two major models are used to structure the relationship between physicians and the MCOs. Under the individual-contracting model, the MCO establishes and maintains its own network of physicians and ancillary services, pays the physicians directly, and conducts utilization- review and quality assurance activities. If the aggregate cost of providing care exceeds premiums the MCO loses money. In contrast, in the group –contractingmodel, MCOs contract with groups of physicians, either integrated medical groups or independent practice associations (IPAs). These groups receive a monthly payment for each enrollee or capitation payment, which covers primary, specialty and ancillary care. In this model, if the cost the cost of primary, specialty and ancillary care for a group's enrollees is greater than the capitation payment for enrollees, the physician group loses money.

Physicians have been exposed to varying combinations of incentives and controls, including capitated payment, transfer of financial risk, utilization management, profiling, bonuses and withholds, and quality assurance initiatives.₆Many physicians are unhappy with the evolution of these managed care innovations and how they could affect physician's status, income, and autonomy to follow their best professional judgment. Competing interests, including those that are sometimes critical to physicians' livelihood, influence clinical decision-making, the core of medical work.