Health Care Systems Essay

1377 Words Oct 18th, 2011 6 Pages

Health Care System Evolution Paper
University of Phoenix
Sandra Walther/ HCS 310
October 20, 2009

Understanding the roller-coaster experience with the use of market forces in health care over the past ten years provides important context for discussions of likely future developments in the nature of competition (Lesser, 2007). The period began with acceptance of managed care transforming the organization of medical care delivery and proceeded to a period in which many of the changes were reversed. This paper begins with observations on competition in 1995, which is slightly past what one might call the peak of managed care’s influence. It goes on to describe the market and policy
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Plans’ provider networks were selective enough to gain payment rate concessions from physicians and hospitals. This contributed greatly to the slowing of cost trends. For example, the trend of hospital prices to payers other than Medicare and Medicaid declined from 4 percent increase in 1994 to a 1.8 percent increase in 1996 (Ginsburg, 2003). Data on transaction prices for physician services began to be gathered a year later but show the trend declining from 3.1 percent in 1995 to 0.7 percent in 1996 (Ginsburg, 2003). Physicians and consumers unhappiness with managed care had profound effects on health care markets both directly, through changes in insurance products and indirectly, through public policy changes (Kaiser, 2004). I believe that a key factor in this backlash was the rapid shift in enrollment from traditional insurance plans into managed care, with many of the new enrollees not joining voluntarily. Consumers were concerned about the possibility of unwarranted restrictions on their care. Physicians, who objected to both restrictions on care and payment rate reductions, clearly played a role in consumers’ dislike of managed care (Kaiser, 2004). The media also plays an important role, with numerous stories about people not getting the care they needed

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