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Managed Care Organizations - Essay Example

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Managed Care Organizations

The group is paid a fixed fee per month.
Independent practice association model HMO - This is similar to group model. The HMO enters into contract with a group of individual health care providers (through a legal entity - practice association). The difference is that the independent practice association (IPA) can treat patients other than the HMO enrolled patients as well.
Network model HMO - It is a combination of all of the above. The HMO can have multiple contracts; it can hire some doctors and pay them salary, it can have IPA contracts with other doctors, and can have exclusive contracts with groups.
Point of service model HMO - In point of service (POS) model, the patients enrolled in the HMO can consult with doctors who are not outside the network of HMO, without needing a referral from a doctor of HMO network. This provides the patients the flexibility consult any doctor of their choice although they have to pay more to consult with doctors outside the HMO network.
A PPO is a form of MCO which makes arrangements with health care providers to seek reimbursement at lower rates. Thus, the patients pay lower than regular fees when they consult the health care providers (preferred providers) who are part of the PPO network.
The managed care organizations generally reduce cost by improving efficiencies. ...
Techniques Used by Managed Care Organizations to contain costs
The managed care organizations generally reduce cost by improving efficiencies. The efficiency can be increased by optimally utilizing technology, reducing overheads, enhancing patient care treatments, and increasing utilization rate of the available medical equipment.
The managed care organizations also provide incentives to health care providers if they select economical ways of treatment. They provide guidelines on various matters; for instance, how to maximize utilization rate of hospital rooms for in-patient treatment; what should be the length of hospital stay for particular treatment; eliminating unnecessary office processes and procedures so that costs can be reduce; etc. These techniques assist the hospitals and doctors to provide better services to patients, and at the same time, to reduce the cost of these services. The patients, thus, have to pay lower amounts to the managed care organizations. Hence the objective of providing low cost health care services is achieved.
However, in order to ensure that providers do not exhibit unethical behavior by providing lesser than required services to the patients in order to reduce costs, all the medical records are kept for future reference and are periodically reviewed by external party. In addition, quality assurance reviews are undertaken to verify the quality of services provides to the patients (Managed Care Magazine, 2000).

Reimbursement for Services
There are various ways the providers are reimbursed for services by the managed care organizations. These include:
Salary: Normally used for staff model; the doctors are hired and are provided fixed monthly salary.
Fixed Capitated Fee: The provider is paid ...Show more


The HMO is a type of managed care organization (MCO) whose health care coverage is provided by making contracts with doctors, hospitals, and other health care providers. Those doctors or hospitals which do not have contract with the HMO do not come under its coverage for health care…
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Managed Care Organizations essay example
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