Strengths and Weaknesses of Managed Care – Health System Example

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"Strengths and Weaknesses of Managed Care" is an engrossing example of a paper on the health system. The managed health care plans have far-reaching strengths and weaknesses to behold since it was introduced in the U. S. The strengths of the system can be appreciated from the outset. First, the fact that the intention or the goal of the system is to offer affordable and accessible health care to the public is enough to confidently conclude that it is working for the public essentially (FinKelman, 2001). It offers the best and works for the people of the U. S as elsewhere that such a model has been for some time now and not been stopped or no intention whatsoever is there.   Everyone in the U. S has the right to access medical care at any time.   The waiting lists in most parts of the country are acceptable (Gawande, Fisher, Gruber, and Rosenthal, 2009).   A physician is at a phone’ s end unless an appointment is given.

The system is acceptable from all angles because it is continuously being welcomed fully as the waitlists become better. It saves people’ s money because they can solve the problems experienced in private hospitals for free.

People receive high and standardized health care under the system without using their dollar, hence having resources to spend on other resources (Kiel, 2000). Moreover, people who are using private treatment services are free (when their insurance has been used up) to use the public medical system for the rest of their treatment. However, the system is open to abuse (as always the norm in public sectors) from within (large managers wages, leaks large amounts of money because it seems like no one is in control).

The American system is in such a way that it is more of a business waiting for somebody to get sick so that they can receive the person’ s dollar. At the same time, the insurance company is not much assistance if it rejects to payout (Gawande, Fisher, Gruber, & Rosenthal, 2009). The intention or goal of the system is well underscored and acceptable but the cost and related drain on the economy as well as other government services is a source of concern. Initially, a number of patients have had the freedom to select their own physician; however, under the system of managed care plans, the choices are increasingly being restricted.

For the uninsured population, the government pays for their health care via Medicaid, Medicare, the military, the veteran's Administration, Native Americans, and other programs. This resulted in great complexity because the entire of these plans follow dissimilar eligibility, reimbursement, and benefit policies (Singer, 2003). Unlike the managed competition in health care previously introduced in Florida and other states in the U. S, managed care plans (newly reformed system) does not offer small employers as well as their employees an extensive choice of insurance of health care and does not also offer them with data to make informed choices of health insurance.

At the same time, in managed care plans there is no network that has turned out to be a small group watchdog of the insurance industry that applies pressure to maintain the market fair as well as functioning. Although the weaknesses are more than the strengths of the new “ system” , there are areas to be happy about.

For those who can afford good insurance or eligible, high-quality services are obtainable (FinKelman, 2001). Despite, cost control problems, the continued limitless access to health insurance for the public shows the strength of the system. Physicians are the primary controller of cost in the health care system Managed care programs are defined as health insurance plants whose intention or goal is to reduce unessential health care costs via various mechanisms, as follows: economic incentives for patients and physicians to choose less costly kinds of care; increased beneficiary cost-sharing; programs for reviewing specific services’ medical necessity; controls on lengths of stay and related inpatient admissions; selective contracting with providers of health care; the setting up of cost-sharing incentives for the outpatient surgery; and the concentrated management of cases of high-cost health care (Veit, 1999).

These programs may be offered in a number of settings, including preferred provider organizations and health maintenance organizations. Health care costs are defined as the real costs of offering services related to health care delivery, including the costs of therapies, procedures, and medications (Fisher, Berwick, & Davis, 2009).   Physicians are at the center of offering primary care to patients.

As noted above most of the issues with managed care programs in the U. S revolve around cost control difficulties and demand for quality. Research shows that health care costs within the USA have been going up, with the highest revenue percentage accruing to health care professionals, hospitals as well as the pharmaceutical industry.   Therefore, physician leadership is needed to enhance the reliability and efficiency of the health care system in the US, but a number of physicians remain lukewarm concerning the changes required to achieve these goals.

This means that malpractice by hampering the health care reforms (Alper, 2002). As a result, physicians become the most valuable players in the reform agenda as the primary controller of cost. Therefore, the movement toward transparent and accountable care places physicians in a unique place to meet augmenting demands for high-quality as well as low-cost care. The ultimate reform in the health care system highly depends on the views and commitment of physicians as primary health care providers.

Even the implementation of an electronic records system or another kind of technology still needs the input of the principal users of the technology and equipment. Malpractice reform, more time with patients, and realignment of financial incentives could help US primary care physicians to comfortably participate and ensure the health care system is completely reformed thereby reducing health costs (Fisher, Berwick, and Davis, 2009). A consumer-driven approach to the health care system Consumer-driven approach refers to third-tier plans of health insurance that permit members to use health reimbursement accounts, health savings accounts, or identical medical payment products in paying directly routine expenses of health care, whereas a high-deductible health plan safeguards them from disastrous medical expenses (Halterman, Camero, & Maillet, 2003).

On the contrary, high-deductible policies cost less; however, the user settles routine medical claims through a pre-funded spending account, always with an exceptional debit card offered by an insurance plan or bank. If the account balance is used up, the use then settles claims just like in a usual deductible. Any unused balance is kept by the users or rolled over at the year-end to invest for future expenses or increase future expenses (Halterman, Camero, & Maillet, 2003).

It is a consumer-driven approach as routine claims are settled using an account controlled by the consumer against a permanent health insurance benefit. As a result, patients' own health budgets are under their control. The federal government loses in excess of $120 billion yearly in taxes since employer-sponsored health insurance stands as a tax-free compensation (Herzlinger, 2004). However, there is no freedom from paying taxes at all if an individual buys their own coverage or directly pays for health care services.

Thus, a consumer-based approach to health care does not have cost control problems as the managed care program. However, it should be noted that it causes consumers, especially those less educated and wealthy, to evade needed and precise health care as of the burden as well as the incapability to make informed precise choices. Critics hold that the cost of health care is shifted to the back of the backs of the patients. That means that patients with chronic illnesses such as diabetes will have to pay high premiums and save less. In a consumer-driven approach, individuals choose their own program of health insurance and take it with them as they move from one job to the other.

Employers may assist with the coverage financing, but they are not the owners of the policy. Persons would enjoy the same tax relief they have when they are covered at work. Thus, this approach seems to have more strengths than weaknesses, which means the long-term effect is fostering competition that in turn lowers prices as well as stimulates enhancement in service (Herzlinger, 2004).

  Managed care is a very common kind of health care in the U. S.  The intention of managed care was to offer a more cost-efficient cover in-comparison to the traditional programs of insurance or a per-service charge payment. However, the program is a very sophisticated system and always problematic for the navigation of the insured.


Alper, M. (2002, APril 18). Tips to profitability manage risk in the era of managed care hybrids. Managed Health Executive , pp. 41-45.

FinKelman, A. (2001). Managed Care: A nursing perspective. . Upper Saddle River, NJ: Prentice Hall.

Fisher, E. S., Berwick, D. M., & Davis, K. (2009). Achieving health care reform - how physicians can help. N Engl J Med , 2495-2497.

Gawande, A. A., Fisher, E. S., Gruber, J., & Rosenthal, M. B. (2009). The cost of health care - highlights from a discussion about economics and reform. N Engl J Med , 1421-1423.

Halterman, S., Camero, C., & Maillet, P. (2003, April 25). The Concumer-driven approach: Can it pick up where managed care left off? Benefits Quarterly , pp. 13-17.

Herzlinger, E. R. (2004). Consumer-Driven Health Care: Implications for Providers, Payers, and Policy- Makers. Chicago: John Wiley & Sons.

Kiel, J. (2000, June 20). Understanding and Managing intergrated delivery networks. The health Care Manager , pp. 41-48.

Singer, A. (2003, June 12). Hospitalists drive care delivery one patient at a time. Managed Healthcare Executive , p. 32.

Veit, H. (1999, April 15). The next generation of managed care: The age of consumerism. Vital Speeches of the Day , pp. 400-410.

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