Managed Care
                              
            (Introduction to Medical Informatics)
         (http://www.cpmc.columbia.edu/edu/textbook)

LAST REVIEWED:  22 September 1997

fee-for-service insurance: health plan that reimburses
     providers for each service administered. Patients may
     see any provider. The incentive to the provider is to
     supply more services. The incentive to the patient is
     to demand more services.
     
     deductible: amount you pay before the insurer contributes
     co-insurance: percentage you contribute along with your
          insurer (20%)
     co-pay: fixed amount you pay per visit ($10)

Medicaid: federal-state health insurance program for low
     income Amercians. Generally pays the provider less than
     fee-for-service.  Many Medicaid patients being shifted
     to managed care programs.

Medicare: federal health insurance program for older
     Americans and disabled. Generally pays the provider
     less than fee-for-service.

managed care: array of health plans that attempt to control
     the cost and quality of care by coordinating health-
     related services. Two thirds of Americans (1994) with
     private health insurance are in one of these plans. Eg,
     HMO and PPO.

health maintenance organization (HMO): health plans that
     contract with medical groups to provide health services
     for a fixed pre-member fee. Reduces cost by giving the
     providers an incentive to avoid supplying services.
     There are now 574 HMOs, with 51 million Americans.
     
     capitation: fixed monthly rate paid to provider to
        supply health care
     
     staff model HMO: providers are employed by the HMO
     group model HMO: independent group of providers
        supplies services for HMO
     independent practice associations (IPAs): group of
          independent providers
          who supply HMO care from their own offices
     point of service (POS): an out-of-network option for HMOs

preferred provider organization (PPO): health plan that
     establishes a network of "preferred" providers that
     offer services at a discounted rate. Patient may go
     "out of network" to other providers, but they must pay
     high co-payments. Reduces cost through discounts. There
     are now 1036 PPOs, with 50 million Americans.

how else PPOs and HMOs reduce cost (in addition to incentives)

(a) gatekeeper physician: primary care physician in managed
     care who refers patients for specialty care. Reduces
     cost by rationing specialty care. Providers receive
     incentives for avoiding such care, or punishments for
     approving it.

(b) utilization review

(c) preventive care: attempt to avoid (severe) illness by
     preventing disease through immunization, catching
     disease early through screening, etc. Reduces cost if
     prevention (cheaper but more patients) costs less than
     cure (more expensive but fewer patients).

comments
     The switch to managed care has largely been driven by
        large purchasers of health care (big companies) 
        and large insurers.
     The differences among the various types of plans is
        diminishing, as each adopts the others' measures to 
        reduce costs and to win customers.
     Is money being saved by reducing waste or reducing
        care?

related reading:
     http://www.wnet.org/mhc/Overview/