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Health, Medicine, Nursing
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Managed care (Coursework Sample)


1. Discuss three major criticisms/drawbacks of managed care. 2. Explain the major features of a consumer-driven healthcare plan (CDHP). 3. Compare the difference between a managed care plan (HMO or PPO) and a CDHP plan in terms of choice of providers, covered benefit, and level of cost sharing


Managed Care
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Managed Care
Question 1
Managed care has been an essential health management strategy in United States. The different models of managed care have helped to understand the relationship between quality and cost in healthcare provisions (Shortell, Gillies, & Anderson, 1994). However, managed care has some drawbacks. Critics of managed care have pointed out to the weak points of the systems, but the problem is identifying a better alternative than managed care. The first drawback of managed care the high cost of health care in the United States. Simonet (2005) states that managed care introduced the insurers as a key player in healthcare services. Insurance companies seek to increase their profits and thus healthcare premiums have been on the rise. Ginsburg (2005) notes that as the premiums increase, employers also increase the burden on employees by increasing cost sharing ratios to the disadvantage of the employee. This makes the general cost of healthcare to increase for all in the managed care plans.
Managed care is to blame for the high number of uninsured people in the United States. Simonet (2005) cites the US federal Census Bureau, which reported in 2001 that 42.1 million Americans do not have any insurance cover. This high rate of uninsured is on the rise because managed care benefits the employed in large organizations. This leaves out a big number of the self-employed and those on a part time employment. The premiums charged by insurance companies cannot allow for a small organization and individuals on low income to afford (Ji, & Liu, 2007).
The third drawback of managed care is a reduction in healthcare quality. In a study of how managed care has affected disease management in outpatient care, Baker, Bundorf and Daniel P. Kessler (2010) established that there is quality gap. Managed care has not been able to transform the quality of outpatient quality delivery. One of the reasons why managed care has failed to improve outpatient delivery quality is a misunderstanding between medical practitioners operations and disease management policies (Villagra, 2004). The plans of managed care have not transformed medical practitioner’s practices, only the management of the health maintenance organizations.
Question 2
Consumer-driven healthcare plan (CDHP) was introduced as a shift against the managed care. Those against managed care came up with the CDHP to provide individuals with control over their health plan, as opposed to the controlled plan from the insurance companies or the employer (Robinson & Ginsburg, 2009). CDHP guaranteed health care plan freedom for the individual but also denied the individual collective bargaining rights. People who went for the CDHP opted to stay out of employment health plan. They believed that the money earned is enough to help them save and create their own “savings insurance plan.” Robinson and Ginsburg (2009) argue that supporters of CDHP went for insurance premiums that covered extreme situations and not the routine health checks that characterize an individual’s lifetime.
A key feature of CDHP is giving the patient the responsibility of choosing a medical care facility (Robinson & Ginsburg, 2009). HMO provides patience with a list of healthcare provider to choose. The cost may be lower, but the choice is limited. With CDHP, patients may pay more for their health service, but they are at liberty to choose where to go for treatment. The purpose of CDHP is to cut on all intermediaries between the patient and the healthcare facilities (Robinson & Ginsburg, 2009). Those who came up with CDHP hoped to cut on intermediary costs and give patients power to decide on the healthcare to receive.
Question 3
The healthcare history of United States is characterized by managed care plans. For a long time, HMO prevailed in the market, but recently Preferred Providers Organization (PPO) have come up as the best health plan model (Hurley, Strunk and White, 2004). PPO has some few features that resemble the CDHP, but it remains a managed care plan. PPO and CDHP have the same idea with regard to choice of providers. Hurley, Strunk and White (2004) state PPO is flexible and allows patients and employers to choose their healthcare providers. This is opposed to the rigid HMO scheme that had a prepared list of providers. The ability of patients or employees to choose their providers is almost similar to CDHP where patients have full control over their choice of provider. However, in PPO employers and patients have to work with a set of preferred providers and not limitless providers like in CDHP.
In PPO, the employer negotiates the covered benefits or the insurance company depending on the premium paid (Hurley, Strunk and White, 2004). The benefits include a comprehensive co...
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