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Managed care refers to a health care system that allows patients to visit hospitals and doctors selectively, and that allows a managing company to monitor the treatment costs (Niles, 2010). The aim of this system of health care is to reduce the treatment costs, as well as improve the health care quality. The managed health care constitutes of health plans, including Point-Of-Service-Plans (POS), Health Maintenance Organizations (HMOs), and Preferred Provider Organizations (PPOs). The managed health plans are significant in the management of the cost and quality of care that patients receive (Niles, 2010). Research shows that the managed care was once an effective health care system in the past because it contained treatment costs, as well as supported high quality health care (Smith, 2001). However, the inpatient care decreased drastically because the prospects for reducing treatment costs have faded. Communities prefer the care providers, who charge reasonably for quality health care services (Knight, 1998). This discussion will consider the historical analysis of the managed care in the United States, showing that the managed care has not been effective of late.
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Historically, the evolvement of managed care took place when individuals started receiving quality medical care at a reduced overall cost (Smith, 2001). The managed care realized some of the objectives, including the provision of a quality care at a low cost. In the twentieth century, the managed care constrained the rise of health care costs. This was possible because the managed care controlled the health care delivery system in the United States. The managed care restricted hospital utilization, including admissions and the length of time patients would stay in the health care facilities (Niles, 2010). The managed care limited the access of individuals to health care specialists, as well as encouraged the health care subscribers to portray healthful behaviors for quality services (Smith, 2001). The American federal government started offering Medicare managed care since the 1970s because of the increase in the health care costs for the old people. State governments experienced a burden of paying for the health care costs for the elderly and indigent, and lacked the capability of running operating deficits (Smith, 2001). This made the state governments have an interest in the managed care approach.
In the United States, the managed care experienced a rapid expansion in the 1980s when numerous employees enrolled in the managed care plans (Smith, 2001). The enrolment of employees in the managed care plans was about five percent in 1984, and increased to about fifty percent in about nine years time. The rapid expansion of the managed care resulted in the rapid decline of the traditioal indemnity plans (Smith, 2001). In the United States, a substantial number of employees enrolled in the private sector managed care because this approach maintained the costs of health care sufficiently. By 1997, the managed care monthly insurance premiums became more affordable than was the case with the monthly insurance premiums for the private health insurance (Smith, 2001). The adoption of the managed care approach by the public payors also expanded the managed care, especially the private sector managed care.
In 1999, the enrollment in the Medicare managed care increased to about 6,000,000 people from about 1,000,000 people in 1991 (Smith, 2001). Therefore, the States government considered the managed care approach as the most significant alternative for constraining the costs of health care. The managed care approach favored the States government because the States had few resources. This approach continued to contain the costs of healthcare, as well as increase the efficiency of health care throughout the United States. It is evident that the managed care continued to be a successful approach for a number of decades. The health care spending declined significantly because of the managed care approach (Smith, 2001).
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However, the managed care started declining toward the end of the twentieth century because of a variety of factors. The reconcilement of physicians to allow the insurance plans to select hospitals and practitioners ceased abruptly (Smith, 2001). Many health care providers, consumers, and physicians sought financial injunctions and damages against the managed care practices. Deterioration relationships existed between health care providers and the managed care plans (Smith, 2001). These relationships accompanied the devastating reactions against the managed care practices. The consumers of the managed care services showed a significant dissatisfaction with the managed care practices, especially business practices (Meyer & McLaughlin, 1998). Consumers of health care services failed to pay for the services promptly, which made the service providers suffer from the burden of various expenses, including the substantial pharmaceutical costs (Smith, 2001). Therefore, the managed care providers experienced opposition from physician groups and hospitals throughout the United States.
The reactions of providers against the managed care, as well as the consumer litigation, caused a number of managed care plans to alter their initial business approaches (Smith, 2001). In a number of communities, managed care plans loosened the constraints on provider utilization in order to attract providers and consumers. Therefore, the managed care plans relaxed every constraint, which allowed the plans to influence utilization rrather than control it. The retreat of the managed care from the initial utilization control techniques weakened the accountability of the managed care to consumers (Smith, 2001). Assessment of the managed care plans by government and business became difficult because of few direct controls and significant dependence on the indirect mechanisms. Various managed care plans embraced business strategies that emphasized on profitability (Meyer & McLaughlin, 1998). Initially, the managed care plans contracted for the highly vulnerable populations, including the elderly. They started contracting for the lowly vulnerable populations in order to improve their profitability. As a result, total enrollment in the managed care plans declined significantly just before and after the beginning of the twenty-first century (Smith, 2001).
The managed care plans put significant efforts to compete with other service providers in the health care market (Smith, 2001). This encouraged the managed care plans to adopt a variety of business strategies, which have similar characteristics to those of the traditional insurance. Some the characteristics included raising the monthly premiums to increase the profit. Therefore, subscribers incurred high health care costs because of the emerging characteristics of the managed care (Smith, 2001). The traditional structure of the managed care focused on the quality of health care, as well as regulation of service utilization. These qualities diminished significantly and the managed care existed in the categories of other providers of insurance, including the PPOs and indemnity plans. The distinction between the non-managed and managed care became unclear because they share a number of characteristics (Niles, 2010). It is evident that the whole process led to a significant decline of the managed care. The decreased ability to restrain health care costs is among the evidences that reflected the decline of the managed care (Smith, 2001). When the managed care declined fully, the per capita healthcare expenditure continued to increase in America.
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In conclusion, the managed care was successful only for some decades after which it declined because of various factors. For the few decades, the managed care achieved the goals sufficiently by constraining the health care costs and ensuring that the Americans accessed quality care. The managed care plans ensured that the vulnerable individuals, including the elderly accessed a quality care with minimum cost (Smith, 2001). After some years, the managed care started to adopt the characteristics of other insurance plans, whose aim was to make substantial profits. Therefore, the managed care’s focus on both quality health care and reduced health care costs declined significantly (Meyer & McLaughlin, 1998).
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