Managed Care

Millions of individuals live in the United States of America, and they all need effective, affordable and accessible health care coverage and services. Within decades, the scope and cost of health care has changed dramatically with increased complexity and significance to the healthcare market. The purpose of this paper is to analyze the managed care industry and examine how organizations try to control costs. Managed Care Organizations is a partnership of health care providers whose purpose is to contract with an institution (Crosson & Tollen 2010).

The contracting institution can be an establishment, a coverage group, Medicare, Medicaid, a union, an individual, or any connection of these kinds. In order to assist patients in an exact geographic area, the providers discount their fee in order to have a contract with Managed Care Organizations. By providing this price cut, the patients are more likely to visit their practice or hospital. The cohort of providers can be a health maintenance organization or a preferred provider organization, depending on how restrictive the alliance is as well as how much money they can command for their services in a particular market.

Kaiser Permanente, an integrated managed care organization, has a partnership with Managed Care Organizations. Kaiser Permanente was founded in 1945 by physician Sidney Garfield and industrialist Henry J. Kaiser. Managed Care Organizations integrates their financing and delivery medical care with the goal of providing a predetermined budget to a served society. Kaiser Permanente is a United States based, non-profit operating league, focusing on the major health care issues facing the nation.

As do all non-profit organizations, as Permanente future look on healthcare (2008-2010) uses excess revenues to reach this goal rather than distribute them as profits or dividends. In today’s world, there are hundreds of thousands of non-profit organizations established at the local, regional, national and international level, and their influence is increasing. Non-profit organizations even consider the third sector of the economy; it is believed that they have a special role in the development of civil society.

These organizations do not belong to the commercial sector or the ublic sector, rather they occupy an intermediate position. Although, this allows them greater flexibility in their work, it also requires that its managers have considerable skill and experience. Some identify non-profits as a charity or service organization; a supporting organization operates like a foundation, but they hold more agreeable tax status and are restrained in the public charities they support. Kaiser Permanente is motivated by the demand of its members rather than the obligation of shareholders. This organization offers many managed care plans; one in particular is the Health Maintenance Organization (HMO) plan.

This plan includes predictable co-payments and no deductibles. Their traditional Health Maintenance Organization plans allow for members to manage their life, health and budget much easier. Many people are concerned about rising health care costs. HMOs build teams of physicians and medical staff who are made available to admitted patients when needed. Within the contracts, which both the patient and doctor sign, limits and restriction are placed on what the hospital will reimburse. The contracts also state what the organization will and will not provide in order to keep the cost down.

Patients with Health Maintenance Organization plans acquire certain costs in addition to the insurance premiums they pay; usually they pay small co-payments when they use particular services. There are many long-term benefits of HMOs, but the most significant one is that individuals who otherwise might be without health insurance, are able to have low cost healthcare. Cost control examines various policies in order to distinguish the difference of certain cost from budgeted cost. The main focus of many organizations is to control costs and the best way to maintain it is to control it in a comfortable way.

There are many reasons as to why cost is such a major issue. For example, health care consumes a great percent of the total economic output. Also, resources are limited and other economic uses are curtailed. If limited resources are not directed to what is most important and used at their highest value (Bodenhiemier, 2009, p 1521), then public spending for health care will not be maintained. Corporations should bear the additional costs. Healthcare charges are surging out of control. Kaiser Permanente has an Integrated Delivery System that delivers the best care at the lowest possible cost.

Kaiser Permanente works intensely to keep down cost while also maintaining quality of care. They work with their members to improve lifestyles and maintain wellness. Integrated healthcare systems are found in large multi-specialty medical group practices with transparent pharmacies, labs and hospitals. Kaiser Permanente uses sharing information systems to track the overall healthcare activities of a particular patient. This method is beneficial for the patient because they are able to avoid the hassle of paying co-payments here and there.

They offer email and other communication tools between patient and doctor. More importantly, the patient’s personal health record, “My Health Manager” is available online at no extra cost. “My Health Manager” allows the patient to order prescriptions, view their lab results and make or cancel appointments (Permanente, 2008). The American health system is maintained by skimming health insurers and the immeasurable “fee-for-service” providers they do business with; this drives up the cost and forces people to pay high prices.

Kaiser Permanente (April 2010) uses this method of business rewards doctors financially for doing more, regardless of whether or not the work is necessary for the patient. However, the institutions associated with Kaiser Permanente work differently. Their doctors are salaried based and so they do not get more money by doing more diagnostics. Kaiser Permanente’s model integrates fixed-price health insurance with therapy at its own hospitals and clinics. This has made Kaiser Permanente one of the cheapest health care providers in most of the markets it enters.

The US Health Maintenance Organization, Kaiser Permanente, employs methods which cost less but also keep patients healthier. Kaiser Permanente has been acknowledged as a successful model of integrated, cost effective care. Their system teaches patients how to care for themselves. They emphasis prevention and skilled nursing and they also focus on minimizing hospital stays. Furthermore, their integration of inpatient care with outpatient care has proven very effective. These practices result in lower costs per member, cost savings for Kaiser Permanente and outstanding doctor attention to patients.

It is evident that in all of the major flaws in our health care structure, elevated cost is the most damaging. Health care costs are a burden to the government, employers, and individuals. One out of every five dollars is spent on health care; within 10 yrs this number will increase. The resulting strain on health insurance premiums makes health insurance top preference with wanting your health expenses covered at an acceptable cost. Analyzing a Managed Care Organization that controls costs, such as Kaiser Permanente, shows a structure that brings hospitals, physicians and financers together to meet the needs of patients.

Kaiser Permanente offers a range of affordable plans for individuals and families. Patients are able to choose between lower monthly premiums or broad coverage that fits their budget and lifestyle needs. This Integrated Delivery System is successful in controlling cost due to its affordable plans. Patients have access to their health records including all lab tests, prescriptions, and notes from all visits, which is very helpful. In the United States, effective and affordable health care is a must.