Managed Health Care

Managed Health Care

WHAT IS MANAGED HEALTH CARE?
by Christine Tobin, MBA, RN,
CDE

For many of us, the growth of "managed

health care" has been frustrating and confusing. We are

angry and upset at a system in transition, which we do not yet

fully understand. Some areas of the country are just beginning to

feel the impact of managed care, while other regions are fully

involved. These different stages in the evolution of managed care

compound our lack of understanding.

Simply stated, managed care is a system that

integrates the financing and delivery of appropriate health care

using a comprehensive set of services. Managed care is any method

of organizing health care providers to achieve the dual goals of

controlling health care costs and managing quality of care.

In the United States, we have a private and

competitive health insurance system which will cause managed care

to continue to evolve. Competition and rising costs of health

care have even led indemnity plans to incorporate elements of

managed care, resulting in fewer "traditional"

indemnity plans. There are several key elements common to all

managed care arrangements:

* explicit standards for selecting providers;

* formal programs for ongoing quality

improvement and utilization review;

* emphasis on keeping enrollees healthy to

reduce use of services;

* financial incentives for enrollees to use

providers and procedures associated with the plan.

Managed care is a system that integrates the

financing and delivery of appropriate health care using a

comprehensive set of services. Managed care is a broad term which

encompasses many types of organizations and insurance options

including:

* health maintenance organizations (HMOs),

which provide a wide range of services for a fixed, periodic

prepayment;

* preferred provider organizations (PPOs),

consisting of groups of hospitals, physicians and other providers

who contract with an insurer, employer, third-party administrator

or other group to provide health care services to covered

persons;

* point-of-service plans (POSs), which combine

HMO and PPO features, Members can choose which option they want

to use at the time of service;

* indemnity or fee-for-service plans which

incorporate features of managed care and provide benefits in a

predetermined amount for covered services;

* self-insurance plans, where employers and

businesses assume fiscal liability and the responsibilities of an

insurer for their own employees. These plans typically

incorporate features of managed care. The employer may contract

out administration of the plan.

Managed care organizations (MCOs) try to

achieve their goals by controlling patient access to specialized

care and eliminating unnecessary services; integrating health

care delivery and payment systems through prepaid member fees;

limiting provider fees by establishing fixed rates for physicians

and hospital services; and controlling drug costs by implementing

pharmacy benefits management plans.

Features common to managed care include:

* pre-authorization;

* rigorous utilization review;

* emphasis on use of primary physicians and

other health care providers;

* quality improvement programs and payment

systems that make physicians, hospitals and other providers

financially accountable for cost and quality of medical services.

Educators have been struggling with the lack of

reimbursement for diabetes education and medical nutrition

therapy for years. I believe the evolution of managed care can

greatly benefit both access to and coverage of diabetes education

services. The health insurance industry views wellness and

prevention as part of managed health care.

(Note: Reprinted from "AADE News," January 1997,
Volume 23, Number I, published by the American Association of Diabetes Educators.
Used with permission.)