What Are the Financial Implications of Managed Health Care?
Since the 1970s the managed health care industry has been a way for business to provide affordable health care services to their employees. However, the industry has created heated debate related to whether it is doing enough to control costs.
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History
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The managed care industry first came into existence with the passage of the Health Maintenance Organization Act of 1973. The idea was to have private health programs negotiate with health care providers as a group. This was supposed to lower costs and allow consumers access to affordable, quality health care.
Famous Ties
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Richard Nixon was the first American president to propose the idea of changing the American health care system from one that is nonprofit to a profit-based model.
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Types
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There are many different kinds of managed care organizations, including Health Maintenance Organizations (HMOs), Independent Practice Associations, Preferred Provider Organizations and Point of Service facilities.
Considerations
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There is an inequality in the amount that the average person is paying for health care compared to Medicare. According to the New York Times, there are significant gaps in the price that everyone else is paying in comparison to Medicare. One example the Times cites is cataract surgery where the general public pays over $12,000 for the surgery while Medicare pays just $675. (See Reference 2.)
Warnings
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Despite the fact that many HMOs have claimed to be doing everything they can to control costs, the prices for various health care services have risen by 2.4 percent more than the average GDP growth going back to 1970.
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