Managed Care — A Look Back and a Look Ahead

Ginzberg, Eli; Ostow, Miriam

doi:10.1056/nejm199704033361411

Cited by 60 publications

(30 citation statements)

References 2 publications

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“…And why do physicians typically have little or no say in the negotiating process when their professional fees enter into the deliberations, and when the physicians themselves are responsible for handling this added patient flow, often with few incremental resources and no proportional increase in infrastructure? For physicians in general, dissatisfaction with managed care runs high, [1][2][3][4][5][6] and among healthcare experts defenses of managed care are both rare and highly qualified. 7,8 Yet at the same time many physicians are at least vaguely aware that such arrangements are often the norm in other industries, with different consumers paying different prices for similar services, and with firms bidding aggressively to capture customers whose financial contributions do not begin to cover reported costs.…”

Section: Resultsmentioning

confidence: 99%

Academic Health Systems Management: The Rationale Behind Capitated Contracts

Taheri¹,

Butz²,

Greenfield³

2000

Annals of Surgery

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ObjectiveTo determine why hospitals enter into "capitated" contracts, which often generate accounting losses. The authors' hypothesis is that hospitals coordinate contracts to keep beds full and that in principal, capitated contracts reflect sound capacity management. Summary Background DataIn high-overhead industries, different consumers pay different prices for similar services (e.g., full-fare vs. advanced-purchase plane tickets, full tuition vs. financial aid). Some consumers gain access by paying less than total cost. Hospitals, like other highoverhead business enterprises, must optimize the use of their capacity, amortizing overhead over as many patients as possible. This necessity for enhanced throughput forces hospitals and health systems to discount empty beds, sometimes to the point where they incur accounting losses serving some payors. MethodsThe authors analyzed the cost accounting system at their university teaching hospital to compare hospital and intensive care unit (ICU) lengths of stay (LOS), variable direct costs (VDC), overhead of capitated patients, and reimbursement versus other payors for all hospital discharges (n ϭ 29,036) in fiscal year 1998. The data were analyzed by diagnosis-related groups (DRGs), length of stay (LOS), insurance carrier, proximity to hospital, and discharge disposition. Patients were then distinguished across payor categories based on their resource utilization, proximity to the hospital, DRG, LOS, and discharge status. ResultsThe mean cost for capitated patients was $4,887, less than half of the mean cost of $10,394 for the entire hospitalized population. The mean capitated reimbursement was $928/day, exceeding the mean daily VDC of $616 but not the total cost of $1,445/day. Moreover, the mean total cost per patient day of treating a capitated patient was $400 less than the mean total cost per day for noncapitated patients. The hospital's capitated health maintenance organization (HMO) patients made up 16.0% of the total admissions but only 9.4% of the total patient days. Both the mean LOS of 3.4 days and the mean ICU LOS of 0.3 days were significantly different from the overall values of 5.8 days and 1 day, respectively, for the noncapitated population. For patients classified with a DRG with complication who traveled from more than 60 miles away, the mean LOS was 10.7 days and the mean total cost was $21,658. This is in contrast to all patients who traveled greater than 60 miles, who had an LOS of 7.2 days and a mean total cost of $12,569.

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Section: Resultsmentioning

confidence: 99%

Academic Health Systems Management: The Rationale Behind Capitated Contracts

Taheri¹,

Butz²,

Greenfield³

2000

Annals of Surgery

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“…Recent findings relating medical utilization on the individual level used 1995 data and on the national level used 1997 data. Even the most recent 1997 medical utilization estimates were based on US data that predated the effects of the US 1997 Balanced Budget Act on US health care (47,48). Documentation of work and activity restrictions utilized data from 1990 or earlier.…”

Section: Discussionmentioning

confidence: 99%

The costs of arthritis

Dunlop¹,

Manheim²,

Yelin³

et al. 2003

Arthritis & Rheumatism

136

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“…15 By 1997, in medium-and large-size companies, approximately two-thirds of employees belonged to one of several managed-care plans offered by employers. 16 The term managed care generally refers to a health care delivery system in which all services are coordinated and provided under a central administrative authority that also controls financial compensation to providers. Managed care was envisioned as an ideal system to reduce health care costs by increasing utilization of primary care providers, decreasing unnecessary laboratory testing, eliminating excessive use of specialists, shortening hospital stays, and improving the efficiency of health care delivery.…”

Section: Lessons Of Managed Carementioning

confidence: 99%

Medical ethos and social responsibility in clinical medicine

Francis

2001

Journal of Urban Health: Bulletin of the New York Academy of Medicine

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Managed Care — A Look Back and a Look Ahead

Cited by 60 publications

References 2 publications

Academic Health Systems Management: The Rationale Behind Capitated Contracts

Academic Health Systems Management: The Rationale Behind Capitated Contracts

The costs of arthritis

Medical ethos and social responsibility in clinical medicine

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