The Potential of Organizations of Fee-for-service Physicians for Achieving Significant Decreases in Hospitalization

Edgahl, Richard H.; Taft, Cynthia H.; Friedland, Jon S.; Linde, Kenneth J.

doi:10.1097/00000658-197709000-00017

Cited by 12 publications

(1 citation statement)

References 2 publications

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“…The decrease in costs resulted from tighter cost-control mechanisms, such as peer review. 8 From the 1970s onwards, many organisations, including universities (for their students) 9 and major companies such as Ford, 10 General Mills and other firms from Minneapolis (they together established Twin City Health Care Development Project to manage the health of their staff) 11 and Caterpillar, 12 turned to managed care organisations to lessen employees' healthcare costs. Managed care was not yet widespread, however, because only companies of a certain size offered health insurance coverage to their employees.…”

Section: The Health Maintenance Organizations Act (1973)mentioning

confidence: 99%

Managed Care: US Experience and European Initiatives

Simonet¹

2004

Journal of Generic Medicines

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Managed care, a regime with multiple facets, integrates the delivery of care, whatever f|elds it concerns (services, hospitalisations, drugs), and the f|nancing to supply medical services of high quality while containing expenses. Its success reached its climax in the 1990s. This paper discusses the history of managed care, analyses the mechanisms of cost reduction that appeared in the aftermath of managed care, notes criticisms from practitioners and insurers and, f|nally, describes some European experiences inspired by US managed care.

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Section: The Health Maintenance Organizations Act (1973)mentioning

confidence: 99%

Managed Care: US Experience and European Initiatives

Simonet¹

2004

Journal of Generic Medicines

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Fee-for-Service Health Maintenance Organizations

Egdahl¹

1979

JAMA

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COST containment is now the nation's overriding priority in the issue of health care. The continuing increase in the percentage of gross national product devoted to health care and the continued stresses on state and federal budgets combine to ensure that the demand for effective control of health care costs will persist and probably escalate.1 For the first time, the appropriate national allocation of expenses for medical diagnostic and treatment procedures is being seriously weighed against other pressing economic needs. The term "rationing" is being used increasingly in discussions of health care.Physicians' orders directly or indirectly account for some 70% of health care costs2 and are, therefore, a logical focus of attempts to contain costs.Traditional insurance programs have failed to engage physicians, through direct financial incentives, in the difficult but necessary process of scrutinizing the massive expenditures they initiate. Traditional insurance programs have encouraged high-cost services or hospitalization instead of less costly but medically appropriate alternatives. New technology is frequently introduced before its effec¬ tiveness is clinically confirmed, cov-erage for appropriate ambulatory ser¬ vices is often inadequate, and peer review of diagnostic and treatment regimens is often not as rigorous as it could be.3Prepaid health plans or health maintenance organizations (HMOs)4 present a sharp contrast to this tradi¬ tional insurance method of financing. Here, participating physicians agree to provide comprehensive health ser¬ vices to a voluntarily enrolled popula¬ tion for a fixed prepaid sum. The premium derives from an actuarial projection of the costs of providing specified necessary health services for an entire year; therefore, overuse caused by any physician is at the economic expense of the plan. This may lead to pro rata reductions in all fees or to an elevated premium the following year and possible loss of patients. Thus, it is in the best inter¬ est of the plan's physician members to seek to use the least costly diagnos¬ tic and therapeutic regimens that are effective.5 Prepaid Medical Care PlansThe two general forms of prepaid plans are the salaried group (SG) and the fee-for-service (FFS) HMO. Both are characterized by prepayment with capitation for comprehensive health services, guaranteed enrollee access to cover ambulatory and insti¬ tutional care when medically neces¬ sary, and a management structure that contracts with both the enrollees and the providers of services. The organizational characteristics of SG HMOs differ from FFS HMOs in two principal ways: the setting in which ambulatory services are provided for HMO enrollees and the method by which the participating physicians are compensated for their profession¬ al services.Salaried group HMOs come in two major models, staff and group prac¬ tice, and provide ambulatory care from a limited number of centers or clinics. They are staffed by physi¬ cians in multispecialty group practice arrangements and supported by a broa...

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Identifying Available Options

Mahler¹,

Friedland²

1978

Industry and HMOs: A Natural Alliance

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The Potential of Organizations of Fee-for-service Physicians for Achieving Significant Decreases in Hospitalization

Cited by 12 publications

References 2 publications

Managed Care: US Experience and European Initiatives

Managed Care: US Experience and European Initiatives

Fee-for-Service Health Maintenance Organizations

Identifying Available Options

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