Reference no: EM132172571

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Managed care firms were created to assist employers and patients in health insurance cost containment. It has been controversial in that patients and providers have complaints on whether cost containment has affected quality of care. Managed care firms use strategies such as disease prevention, health education, and aligning services and aligning incentives. Managed care is offered primarily through employer-based health insurance which limits the choices to patients. Capitation payments, used by managed care firms, are also a means to control healthcare costs. They due however put risk on physicians for services provided to patients. To ensure the proper care is being given to patients manage care organizations can measure resource utilization. Money is paid in advance to providers at a fixed rate over a fixed amount of times depending on the services range they can provide. For Fee-for-service there is a greater risk to the payer and not the provider as providers are reimbursed after a service is delivered. In this case, providers get paid based off the number of services they can provide making it more of an incentive to provide unnecessary care. In either model the physicians role as a patient agent can be affected as they both have risk to overutilize and underutilize care without quality. My prediction would be that managed care firms will be forced to adjust their cost containment practices with a harder push for wellness and disease prevention. Baby boomers are aging and chronic noncommunicable (ex: heart disease, hypertension, hyperlipidemia, Type II diabetes) disease is rampant and will substantially increase the cost of healthcare over the next few decades.