Health Care

9 Pages 2280 Words

apidly growing enrollment in managed care health
insurance plans has transformed the health insurance market in
the United States. Virtually nonexistent in most markets three
decades ago, managed care health plans covered 63 percent of
the nation's employees by 1994. Managed care incorporates a
range of features that allow the insurer greater influence in
the process of care delivery. Managed care plans aggressively
contract for lower prices from physicians and hospitals and
attempt to constrain the use of health care services by
monitoring providers and changing provider incentives. Health
insurance providers that operate under the fee-for-service
concept grant the consumer much more freedom of choice
concerning doctors and treatment programs, thus freeing the
consumer of any feelings of discontent with "interfering"
insurance companies. ! Consumers of indemnity plans, however,
pay a price for that freedom by way of drastically higher rates and
little knowledgeable input on doctors, specialists and nearby hospitals
that will fit their particular needs. Many of today's health insurance
consumers choose to place their trust in a managed care insurance
company, relying on the expertise of the provider to support and
facilitate their various medical treatments and needs. Health
maintenance organizations, commonly known as HMOs, have emerged as the
clear leader of managed care providers. Other types of managed care
plans include preferred provider organizations, point of service plans
and managed indemnity plans. Most studies focus on HMOs and so do not
describe variation in the type of HMO or in the extent of the level of
management in non-HMO plans. HMOs have effectively reduced health care
expenditures (Miller and Luft 1994; Manning et al. 1987; Luft 1981).
A natural assumption would be that the quality of ! care would be
lowered as insurance rates go down and remain reasonable and
affordable. However, these...