Managed care arrangements: barriers to cost savings potential.
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Biomedical subjects
Publications and source records attributed to D Ermann.
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Utilization review (UR) programs seek to determine whether specific services are medically necessary and whether they are delivered at an appropriate level of intensity and cost. Although UR programs have been operating for more than 40 years, they have changed dramatically during the past two decades. Today, many health care providers, analysts, and policymakers view UR as a possible solution to hospital inpatient cost and quality problems. This paper addresses how UR has evolved, how UR is used today by different delivery mechanisms (i.e., Medicare, health maintenance organizations, preferred provider organizations, Blue Cross, and commercial insurers), the cost effects of various UR approaches, and how UR will be used in the future.
Preferred provider organizations (PPOs) are a new delivery arrangement that affords the consumer flexibility in choosing providers, while offering financial incentives to use preferred providers (both hospitals and physicians). These providers, who contract with a PPO, must agree to utilization review and usually accept a discounted charge as payment. Preferred providers do, however, benefit from an increased patient base and more rapid claims payment while remaining in the fee-for-service sector. The article examines this innovative delivery approach and discusses potential implications for primary care physicians.
The preferred provider organization (PPO), an alternative delivery system currently embraced by the employer sector, has been growing at a phenomenal rate for the past few years. It is necessary to examine the issues an employer should consider when deciding whether to offer a PPO option, and to look at organizational issues such as PPO structure, quality, utilization review mechanisms, and benefits design.
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A new development in the restructuring of American health care is the dramatic growth of preferred provider organizations (PPOs). Based on a national telephone survey, this paper assesses the future direction of PPOs by examining segments of the market that are believed to be lead indicators of future activity. It includes analyses of "new" versus "old" PPOs, the ten largest PPOs, and the entrance of hospital chains into the insurance market. We conclude that the dramatic growth of PPO enrollment in 1985 is likely to continue in the future, but with increased movement toward vertical integration and joint ventures among providers and insurers.
Preferred provider organizations (PPOs) have recently attracted much attention as an alternative to both traditional fee-for-service medicine and health maintenance organizations. To examine their development and structure, we conducted a telephone survey with executives of more than 130 operational PPOs. We describe typical examples of the three most common types of PPOs-those sponsored by providers, insurers, and entrepreneurs-and identify problems each faces in the increasingly competitive health care environment. We then cite approaches that innovative PPOs are using to deal expressly with these problems.
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This study was initiated to determine the extent of hospital capacity reduction in large U.S. cities. In addition, hospital bed and service additions were analyzed. Study data indicate that between 1976 and 1978 more than 5,000 beds were closed in the 36 cities surveyed. This constitutes 2.7% of total hospital beds in those cities. Nearly half of the cities had no bed reduction at all, while seven had their supply diminished by more than 5%. Thirty-one emergency rooms and 13 outpatient facilities were also closed during the 2-year period, potentially affecting patient access. Health system agencies (HSAs) expressed approval of 73.4% of hospital closures and 54.4% of expansions, therefore expressing greater support of system shrinkage. Data on expected hospital changes (for the next year) was limited. However, opening and expansions are expected to occur at a slightly higher rate than during the 1976-78 period with fewer closures.