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Home arrow Health arrow Introduction to health care services

SUMMARY

The U.S. health care system has become the largest and most expensive sector of the U.S. economy, demanding more and more of our GDP every year with no change in sight. This increased cost of health care services is not sustainable in the long run, requiring our nation to make tough decisions about the utilization of health care services. It was determined by health policymakers that managed care plans that linked health services and health financing would reduce utilization of health services while also improving the quality of those services. These MCOs were designed to reduce the quantity of health care services consumed and also to restrict the amount being paid to the providers of care.

The first MCOs were established in the early 1900s, and MCOs began to expand shortly after the establishment of the Medicare and Medicaid programs and the passage of the Health Maintenance Organization Act of 1973. They continued their growth thanks to federal support throughout the 1980s and 1990s. In the beginning they were very successful at reducing the utilization of health care services and restricting payments to providers of health care. However, these successes resulted in a tremendous backlash from subscribers, providers, and government.

There are many ways that utilization of expensive health care services can be reduced. It seems obvious that if we can devise methods to keep people well, the use of services will be reduced. Along with this greater emphasis on prevention, the use of comparative effectiveness research can help patients and providers to make better decisions concerning the use of expensive services that may produce low value for the patient.

Some businesses are now becoming proactive in their attempts to reduce the utilization of health care services by giving consumers responsibility for their health care, creating centers of value for improved outcomes, and making primary care physicians gatekeepers for health care services.

KEY TERMS

closed-panel HMO

comparative effectiveness research (CER)

group model HMO

health maintenance organization (HMO)

Health Maintenance Organization Act of 1973

independent practice association (I PA)

managed care

managed care organization (MCO)

open-panel HMO

point of service (POS) plan

preferred provider organization (PPO)

staff model HMO

 
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