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Managed care, in general, denotes the limitation or re-evaluation of the sort of care that physicians can provide their patients. The assumption is that, by limiting extraneous tests or services, the cost of health care can be reduced. Various plans have been put forth in attempts to lessen the financial burden of health care costs. However, as with any solution to such complicated matters, we have had to trade off certain benefits. Listed here are discussions of some of the more common terms batted around newsrooms today.
Health Maintenance Organization (HMO)
The basic idea behind an HMO is that patients have one primary care physician who knows them well enough to provide them with "complete care." In other words, HMO physicians attempt to reduce costs by limiting blood tests, x-rays, CT cans, referrals or other services that cost a bundle but might not be considered necessary. Patients inrolled in HMO's pay pre-set, monthly fees in addition to co-payments for each office visit and presription. HMO's often provide preventive care that is not covered by traditional insurance plans. Under an HMO, you can only visit a specialist by getting a referral from your primary care physician. People sign up for membership in an HMO based on the offerings of their employers.
Pro's
The strongest selling point for HMO membership is low out-of-pocket costs. Most plans have no deductibles and have low co-payments for each visit. Since HMO's pay for the services consumed by patients, the HMO's have an incentive to keep their members healthy. As a result, they offer screenings, exams, health education, and other preventive care. Studies have shown that preventive care and health promotion are effective.
Con's
The strongest argument against HMO's is their limitations on patients' and providers options. By signing on to an HMO, you are restricted to choosing a physician that has signed with your specific plan. If the doctor you have been seeing for 10 years is not a member of your HMO, you have no choice but to switch. If your HMO primary care provider believes that you don't need a certain test or a referral to a specialist, but you still see the specialist, you cannot be reimbursed for that treatment. In some cases, HMO physicians might be provided with financial incentives (or disincentives) to limit the services they provide to patients. They might have to play the role of "gatekeepers" to care, and, in the past, they have even been restricted even in what they can tell their patients. Such policies limit the options of treatment that physicians have at hand. These policies might diminish the quality of care provided within an HMO.
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Preferred Provider Organiation (PPO)
PPO's basically provide incentives for patients to visit one provider or health care facility. This is accomplished through the reduction in fees. Like other insurance plans, PPO's require the payment of a deductible. PPO deductibles are usually low, and involve little or no co-insurance. If patients visit physicians or hospitals that are covered by their plan, their payments are lower. If they visit doctors or hospitals outside their plan, the patients are not covered as well. Overall health care costs are reduced since participating health care providers agree to charge lower fees for service.
Pro's
PPO's are not as structured as HMO's. Hence, patients often have more freedom in decision making. Not only do patients have greater options in treatment, but they can opt to seek treatment outside of their PPO if needed. Unlike HMO's, PPO's do not require patients to name a single primary-care provider.
Con's
While PPO's allow their members to see doctors outside of their networks, they often make this option financially unfeasible. By charging much higher fees and increasing the deductible, patients might not be able to afford care outside of their PPO networks. Additionally, the freedoms granted in terms of care by PPO's usually vary from plan to plan. The plans that offer great amounts of freedom in terms of treatment options usually are not as effective in reducing health care costs. PPO's run the spectrum in how restrictive their policies are.
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A single-payer plan, also known as National Helath Insurance or socialized medicine, is medical care provided and financed by the government. The main goal of such programs is to eliminate class distinctions in health care. In other words, the homeless or unemployed should be able to receive the same quantity and quality of care as the wealthy. Proposals for national health plans in the U.S. are often based on Canada's system of national health care. Health care providers and hospitals would be on government payrolls. Depending on the proposal, patients would pay through taxes or state insurance programs (also known as more taxes).
Pro's
The obvious benefit to national health care is access to unlimited care at no direct cost for services. Patients can visit their physician as much as they want and not pay for each visit or service. Regardless of income, patients have access to any form of medical care, from preventive screenings to complicated surgery. Studies have shown that the poor in the U.S. rarely take advantage of or have access to preventive care. As a result, they are more likely to die of such diseases as cancer. A national health care plan would be of great benefit to the poor. Additionally, supporters claim that national health care would increase the autonomy that physicians and paitents have. They argue that the restrictions placed on physicians under HMO's and managed care would not be a part of any national health care program.
Con's
The downside of national health care is found in the small print. Often called socialized medicine by it's detractors, national health care can lead to lengthy waits for basic care and surgical procedures. While patients who need immediate attention (i.e., coronary by-pass surgery) can receive immediate care, other paitents are placed on waiting lists that can extend for weeks or months. Secondly, health care providers are usually not allowed to open private practice. Canada's plan has disallowed the operation of private hospitals. Thirdly, While patients do not have to pay at the time they receive medical services, the amount of taxes paid are usually quite high. Taxes are increased on the federal and local level to finance the increasing costs of medical care. Finally, opponents of national health care are wary of the government's ability to provide quality health care to all. With medicare, medicaid, and social security in dire straits, they hold no optimism for government-controlled health care.
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In short, a medical savings account is a tax-exempt account that allows you to deposit money that can be used towards future medical payments. Specifically, the money can go towards low-cost health care that is paid out-of-pocket before the deductible is reached. In fact, many MSA plans are paired with high-deductible insurance plans. When employers purchase health care for their employees, they may elect to use MSA's. Instead of conventional insurance plans, the employer would provide insurance for catastrophic care only, thereby saving on high-cost insurance plans. These savings are placed in MSA's for their employees.
Pro's
MSA's succeed in giving the patient the responsibility for cost-control. Since many MSA plans allow savings to be used for retierment, users are provided the incentive to save their money. Theoretically, they would refrain from making needless visits to their doctors. On the other hand, MSA users are free to decide how to spend their money (within the limits of health care, of course). Further, when they do chose to see a doctor, MSA users are free to select their own health care provider. Since no HMO or PPO networks are involved, they are not restricted in who they can see for care.
Con's
The problem with MSA's stem from their greatest benefit -- by decreasing the amount of people looking for care, health care costs might actually be driven up. MSA patients will be much more frugal with their money. By staying away from clinic visits and self-diagnosing what they believe to be minor illnesses, these patients place themselves in great risk for developing serious illnesses. In the long run, these illnesses are much more costly to cure than they are to prevent. With people scrimping and saving over their MSA's, preventive care such as check-ups and screenings will be placed on the back-burner. Secondly, the establishment of MSA's will be harmful to the chronically ill and elderly. People who have high annual medical costs will opt for conventional insurance since MSA's will not be sufficient to cover their routine expenses. After MSA's are in general use, regular insurance will be much more expensive since the healthy (who pay the most but reap the least benefits from insurance) will elect to participate in MSA's instead of insurace. Hence, insurance companies will have to raise prices to stay afloat.
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