Discuss the ethical issues or concerns about MCOs providing a lower quality of care compared to traditional fee-for-service (FFS) organizations?
Assignment brake downMCOsYou are a new physician setting up your own practice in a new town. You are researching the different MCOs offered in your area and are considering becoming a physician for one of these networks. You have also invited the sales representatives of several health plans to speak with you about the benefits of choosing their plans.Based on the above scenario, answer the following questions:What effects would joining a MCO have on your clinic regarding staffing, patient volume, and financial stability?What policies and procedures should be used by the MCOs to reduce costs for their clientele?Discuss the ethical issues or concerns about MCOs providing a lower quality of care compared to traditional fee-for-service (FFS) organizations?What are some of the questions you would ask each representative about his or her company\’s specific plan that will help you make a decision?Do you believe that the evolution of MCOs and consumer driven health plans (CDHPs) has affected the healthcare environment today by integrating the financing and delivery of healthcare services? If yes, how?How have the roles and relationships between physicians and patients changed by each of these types of plans?Reading For AssignmentCost Containment in Managed CarePayment systems based on resource use have been designed and implemented for other providers of care. One example is the resource utilization groups (RUGs), which is a classification system for nursing home residents commonly based upon functional assessment coupled with projected resource utilization. Other resource-based payment systems include home health resource groups (HHRGs), which are prospective payment systems (PPSs) for home healthcare. However, the most recent and perhaps most controversial cost-containment effort has been the introduction of managed care.In economic terms, managed care is an attempt to make medical care delivery more efficient through efforts to both the reduce cost of providing healthcare services and improve the overall quality of care. Managed care attempts to eliminate the inefficiencies characterizing the system by favorably affecting the price of the services, the site at which services are received, and the utilization of services.Two sources of inefficiency managed care tries to address are economic.Moral hazard: As we have seen, people change their behavior when they have insurance and may demand services that are of little, if any, benefit except to ease their minds.Demand inducement: Because patients usually trust their physicians and do not question their recommendations, physicians may abuse their role as the patients\’ agent for their own financial gain by making treatment recommendations that are not in the best interest of the patient. In fact, most (but not all) physicians are patient centered and do not take advantage of the system. Nevertheless, many physicians tend to overprescribe diagnostic tests and visits in order to protect against malpractice actions.Both moral hazard and demand inducement place us on a flat-of-the-curve medical system, that is, the point where more care is of no additional value (and in some instances, harmful) but continues to add to the cost.Managed care arose mainly out of the opportunity for competition that resulted from the excess capacity in the system (the medical technology arms race) and the resulting high cost of services due to underutilization. Business responded to this by looking to health insurers covering their employees to rein in health insurance costs and subsequently bring the year-to-year increases in premiums under some control.Managed care attempts to eliminate unnecessary and inappropriate care and have patients use less costly settings and providers without reducing quality. To accomplish this, managed care transformed passive health insurers, which reimbursed providers on a cost or cost-plus basis into organizations seeking to control costs and affect quality.You previously learned that there was excess capacity in hospitals due to the effects of the utilization of hospital services brought on by Medicare\’s PPS. These reductions in service utilization were due in large part to a reduction in hospital length of stay and shift to outpatient services, including the development and expansion of ambulatory surgery. Managed care organizations (MCOs) took advantage of excess provider capacity to bring costs down by, for example, negotiating discounted care in exchange for having the provider be part of the MCOs preferred network of providers. What does this mean?
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