Issues related to healthcare are nowadays becoming complicated as there are emergences of new terms such as the managed care and, co-payment, premium among other. This has resulted from healthcare industry as it has developed its own language. Since there is a difference between the health care policies, it is of utmost importance to understand the health insurance policies. These include the fee for service plan and the managed care plan. The difference of the two is that the managed care plan offers limited choice of service while the fee for service offers a comprehensive freedom for the service provider(Cleverly & Cameron , 2007 ).
However, the managed care are much economical than the fee- for service. How HMO Differs From a Traditional Indemnity Health Insurance Plan Bilirakis (2001) states that the health maintenance organization (HMO) uses less freedom in restricting a person to a primary care physician who coordinates care with the help of a specialist. The managed care options provide the patients with a choice of what is more expensive than the HMO. The choice of the patients for seeking care outside of the group is normally provided by the Preferred Provider Organization (PPO).
The HMO has less freedom than the PPO and the POS. However, getting treatment within the network saves a 90-100% of the total cost covered while being treated outside the network you only have a responsibility of submitting the claims that gives an opportunity of covering 70 % of the costs. The Point of Service plans (POS) operates in a manner that allows the patient to stay in the network, and provides room for seeing a specialist outside as with a percentage of charges.
Therefore, a comprehensive coverage of preventive healthcare services is normally provided by the health maintenance organization (HMO) than another type of a plan. This is because a patient is not required to pay deductible payments are not required prior to the coverage period and thus, resulting to reduced co-payments. The HMO limits the requirements of submitting claim forms to the insurance company as there is no coverage for the services that are performed by the providers who are not within the network without having a good referral from the PCP (Stephen, 2003).
Identifying Some Possible Methods That May Be Useful In Cutting Cost Health care setting are characterized by a number of health bills which involve hospital visits to a number of drug prescriptions that involved with a heavy burden of high cost. The high medical cost in the United States has prevented a number of patients, from seeking medical care and thus skipping prescription (Jorgensen, 2010). As a consultant to a major health insurance company who wants help identify ways to reduce payments for health care benefits, I have identified some possible methods that may be useful in cutting costs.
These include i. Hoose wisely: I would advice the people not to try to sign up different health plans they had signed previously. This is because; there is no major difference in premiums between the HMO and the PPO. The major difference is noticed in the co-pays and the deductibles. The insurance holder should assess the best option for him/her through a total of estimation of the total cost annually between the various plans in relation to the medical needs of the family. This is just simple mathematics which only involves the use of a calculator.
a plan that involves low co-pays for doctor’s appointment is suitable for a family that has kids. In addition, plan that has a good coverage for the children is required for a family that has kids. A better bet for a young and healthy person will be a plan that has higher deductibles and reduced levels monthly premiums (Organization for economics co-operation and development, 2004). ii. Widening the network: Widening the network can save a considerable amount of money up to 50% of the cost of treatment.
However, this can be successfully achieved out of a network specialist is needed in cases where the physician has an amount of experience of performing the procedures, and iii. Hire expert Help: Hiring an expert help can also help in reducing the cost at a considerable rate (Organization for economics co-operation and development, 2004). Effects of Licensure Regarding PHO A physician Hospital organization (PHO) has the responsibility of delivering cost effective quality health. The provision of quality care that is cost effective can be achieved by the implementation of a properly designed physician incentive program.
This helps in sharing the rewards as well as the risks that are related to capitation. An effective program that serves to promote cost effective quality program becomes critical as capitation serves the role of displacing fee for service mechanism. Therefore, with the availability of incentives, the PHO has the opportunity of encouraging and rewarding cost effective plan through four basic components which include risk pool structure, a coverage plan for deficit, a program for incentive compensation and provider base compensation (Moseley, 2003).
Research shows that the nature of competition that exists between the physicians during the examination of the PSO is being examined under licensure of corporate practice of medicine (Kongstvedt, 2001). The presence of provider sponsored organization assumes the presence of increased financial risk due to less measure on the licensure board. This helps in providing and maintaining an environment that affect the vital interest. It also facilitates a harmonious relationship between the health care setting and the physician. Decision of the Fixed capitated rate on PMPM
When the health care providers receive some payments from registered patients, the process is known as prospective capitation (Cleverly & Cameron, 2007). The health care providers have a responsibility of providing specified services during the contract period that they have with the members. The capitation is prone to exposing the health care providers to risk of operating out of budget. In order for the health care providers to manage the risk, they should try to evaluate the cost effective ways of delivering their services through prevention strategies as well as providing adequate primary care.
The calculation of PMPM can be calculated by basing the assumption on the provision of service provided in the prospective capitation. The sum is normally derived from estimating the cost of service provided to the member in a given month (Cleverly & Cameron, 2007). My decision on providing a fixed capitated rate on a PMPM basis would be derived from gathering an insight of the capitation rate through the use data retrieved from the provider revenue and financial viability.
The difference between the two must accommodate the control of insolvency of fixed costs and the overhead cost of the plan. . Table 6–8 calculates a required net PMPM rate of $138. 50. When that rate is increased 15 percent to cover retention, the required PMPM rate would be $159. 28. REFERENCES Bilirakis, M. (2001). Medicare Provider Service Networks: Hearing Before the Committee on Commerce, U. S. House of Representatives. Collingdale, PA: DIANE Publishing Cleverly, W. & Cameron, A. (2007). Essentials of health care finance. J Sudbury, MA: Jones & Bartlett Learning
Jorgensen, H. (2010). Sick and Tired: How America’s Health Care System Fails Its Patients. Sausalito, CA: PoliPointPress Kongstvedt, P. (2001). The managed health care handbook. J Sudbury: Jones ; Bartlett Learning Moseley, G. (2003). Managed care strategies: a physician practice desk reference. J Sudbury, M: Jones ; Bartlett Learning Organization for economics co-operation and development. (2004). Private health insurance in OECD countries. Washington, DC: OECD Publishing Stephen, W. (2003). Health insurance: current issues and background. Carbondale, IL: Nova Publishers