Term Paper on "History of Managed Care"

Term Paper 6 pages (1591 words) Sources: 5 Style: APA

[EXCERPT] . . . .

Managed Care

The American health care system is in a crisis running deep and threatening to undermine the moral and ethical basis of care provision. Privatisation and open market system have not resulted in optimal health care provision, but rather contributed to cost control procedures and blatant denials that have left patients at the mercy of profit mongering HMO's. The future for managed care as it is today, is really bleak and a change is imminent and urgent.

The United States is undoubtedly one of the best-developed countries in the world with high standards of living. Unfortunately, though, the country is struggling with a health care crisis, which is running deep and threatening to undermine the moral and ethical basis of care provision. Without any universal health care plan, American citizens today are left under the mercy of commercially minded HMO's (health maintenance organizations) whose primary concern is not always delivery of optimal care but rather minimizing costs even at the cost of care denial. The HMO's, which constitute the delivery of managed care, have thus created such rancour among the public and even the doctors. The present fragmented health care system; covered up as 'managed care' is clearly a thorn in the flesh that needs to be rooted out. The future for managed care certainly seems doomed with all the public outcry against the HMO's turning medical care into a ruthless business environment. Let us have a brief overview of managed care, its history and development, and the transformations that happened over time that have created the present state of health care crisis.

Managed Care (the Beginning)

Managed care, as it is known today originated early in the previous century. The concept of prepaid group health care can be traced back to 1929 when Dr. Donald Ross and Dr. Clifford Loos provided health care for more than 2000 employees of the Los Angeles department of water and fire. In 1933, Dr. Garfield provided health care coverage for more than 5000 workers involved in an aqueduct construction project. [TUFTS] However, it was Henry Kaiser whose name is widely recognized as the pioneer in prepaid health care systems in the U.S. Kaiser associated with Dr. Garfield to provide health care for more than 6500 workers involved in the construction of the Grand Coulee Dam in Washington. The success of the prepaid care system prompted Dr. Garfield and industrialist Kaiser to expand their prepaid health care system. Thus, on October 1, 1945, the Kaiser Permanente Health Plan came into being and for the very first time a comprehensive prepaid health care plan was opened to the public. Within 10 years the enrolments reached an astounding 300000 people from California. Today this organization continues as a collaborative effort of non-profit Kaiser Foundation Health Plan and the Permanente medical groups. [Kaiser Permanente]

Managed Care Facts

The introduction of the federally funded Medicare and Medicaid plans in 1965 saw a new and welcome development in healthcare. Medicare in essence catered to population in the above 65-age group and those with special medical conditions. Medicaid, the state and federal funded program, on the other hand serves children and low-income people. Medicaid program is however limited and regulated by stipulations pertaining to income. Hence, without any universal health insurance scheme, American public have no alternative but to enrol in any one of the many commercial insurance providers. As per the recent statistics, American uninsured population stands at 46 million (15.5%). Statistics also show that around 43 million benefit by Medicare, while the Medicaid program covers 45.4 million people. Around 166 million people (55.1%) of the total population are enrolled in commercial health insurance policies. Among the leading HMO's are Wellpoint covering more than 34 million people, United health group with 19.5 million people, Aetna Health care (15.4 million), Humana (11.3 million) followed by Kaiser foundation (8.6 million). [MCOL Inc.]

Managed Care Mismanaged

There is no question of doubt that today managed care is largely mismanaged. The free market propaganda and the for- profit health care, which is supposed to be providing more efficient and optimal care is unfortunately failing to do so. First and foremost among the concerns is the increasing number of investor owned hospitals and medical care centres, which tend to increase costs for the customer. There are several instances of malpractice by HMO's who are more concerned about their own profitability than providing optimal care. The HMO's go to the extent of offering kickbacks to doctors who refuse insurance cover and have developed a system wherein the compensation for medical practitioners is related to the cost savings effected rather than quality of care giving. Overbilling of Medicare cases is another familiar tactic used by these organisations. The case of Colombia / HMA which was recently found to be involved in such fraudulent practice and forced to pay U.S.$1.7 billion in settlements to the U.S. government is just one example of medical insurance scandal. [Steffi Woolhandler]

In fact, the cost containment procedures practiced by HMO's have dissolved the very purpose for which these pre-paid health insurance schemes came into existence, that of providing care. The famous case of Humana, where a doctor was forced to decline insurance coverage for a deserving case just because providing such costly treatment would not be in the profit making interest of the organization. Dr. Peeno, who happened to be the gatekeeper at Humana and declined the patient's costly operation, was offered promotion for her refusal of the expensive treatment. This grossly commercial and insensitive decision happened to cost the life for the patient who could have been saved with timely medical intervention. Also, HMO's insist on short staying practices for labour, mastectomies, etc. This unfortunate but familiar practice is a clear compromise on medical care and clear case of intruding in the doctor's decisions. There have also been instances where doctors were removed from HMO contract for their rightful allegiance with the patient. [Michael Wynne]

As Dr. LINDA PEENO stated in her testimony, "my work as a medical director in a hospital and as a physician executive at Blue Cross/Blue Shield of Kentucky convinced me that the place made no difference. Whether it was non-profit or for-profit, whether it was a health plan or hospital, I had a common task: using my medical expertise for the financial benefit of the organization, often at great harm and potentially death, to some patients." [LINDA PEENO] Asides the compromise on care, the costs incurred by private insurers and HMO's is much greater. First and foremost, private insurance agencies are very picky and spend considerably for risk assessments and marketing. This is more so in the case of Medicare patients where HMO's tend to be very selective. In effect, their motto is not medical insurance for all, but only for those who are already healthy. The mergers of HMO's is another cause for concern. (monopolizing the field). The one promising solution to this problem is to implement a nation wide health insurance policy. Just as the Canadian health care model, the government as a single player would bring about a revolutionary and much wanted change in the ailing medical health care system. For a flat fee collected in the form of health tax, the government could provide quality health care to all irrespective of their insurance or employment status. The National Health Insurance Act (HR676) which is currently referred to the Subcommittee on Health, is a much hoped for solution to the prevailing crisis. It is hoped that a cost savings of around $150 billion in paperwork and $50 billion in bulk purchase of medicines could be effected in the case of a single player system and these cost savings could be better utilised for care provision. [PNHP]

Conclusion

The American health care system is in a prolonged crisis state. Privatisation and open… READ MORE

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