Aug 28, 2008

Group Medical Expense Benefits, Managed Care Plans Issue - Limited Choice of Medical Providers

True managed care plan should have five main characteristics:

  • Controlled access to providers

  • Comprehensive case management

  • Preventive care

  • Risk sharing

  • High-quality care

  • The major characteristic of managed care plans that differentiates them from traditional medical expense plans is probably the limitations on the choice of medical care providers that may be used. The question arises as to whether these choice limitations lead to a different quality of care. Despite these apparent or perceived differences, more than three-quarters of the population is now in some type of managed care plan, and the majority seem reasonably satisfied with the arrangement. In the past few years, much of the growth in managed care has come from employers with fewer than 50 employees. Unlike larger employers, who usually give employees a choice between one or more managed care plans and a traditional indemnity plan, small employers are more likely to offer a single managed care plan rather than any options.

    Despite the relatively high level of satisfaction, there has been some recent consumer backlash against managed care that has led to plan changes and legislation, particularly at the state level.

    Limited Choice of Medical Providers
    Managed care plans attempt to eliminate the unrestricted use of medical care providers by either requiring or encouraging participants to use preapproved providers. The earliest managed care plans, which were HMOs, usually provided no coverage for treatment outside the managed care network, discouraging enrollment because many Americans valued the choice that had traditionally been available when medical treatment was needed.

    The concept of managed care received considerable attention in the late 1960s and early 1970s, culminating in the passage of the Health Maintenance Organization Act of 1973. The act resulted in modest growth of HMO plans, but the real growth that came later for managed care was encouraged by several developments that gave employees more choice in selecting providers of medical care. One of these changes was more flexibility under HMO plans. For example, many of the early HMOs assigned a primary physician to a new member. Gradually, new forms of HMOs developed, and existing HMOs were modified to allow members to select a primary care physician from a list of primary care providers.

    At the same time, the traditional insurance industry was entering managed care, primarily through the marketing of PPO products, which allowed more flexibility than most HMOs with respect to selection of specialists. In addition, benefits were usually available for treatment received outside a managed care setting, though at a reduced payment level.

    The popularity of PPO products with both employers and employees forced the HMOs to adopt even more flexibility. This they did through the establishment of POS plans, which covered nonnetwork treatment. The typical POS plan is more flexible than a typical HMO but more restrictive than a typical PPO product. However, the variations in all three types of plans today are so significant that it is sometimes difficult to determine exactly what is typical.

    Survey statistics of the percentage of managed care participants in each type of plan vary, depending on who conducts the survey. However, results of these surveys are similar and indicate that about 40 percent of managed care participants are enrolled in PPOs, 35 percent are enrolled in traditional HMOs, and 25 percent are enrolled in POS plans. All of the surveys show that the percentage for PPOs has recently been increasing. While the percentages for both HMOs and POS plans have declined somewhat, each of these types of managed care plans have continued to have growth in absolute enrollment as more employees leave traditional insured plans and move to managed care.


    Related Posts with Thumbnails