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In: Operations Management

With the advent of managed care, medicine changed radically. If you went to the ER with...

With the advent of managed care, medicine changed radically. If you went to the ER with abdominal pain in the 1970's or mid 1980's, they would run a battery of tests right away to determine the problem. This benefited the patient because a lot was ruled out immediately. It also benefited the hospital because they could generate income from all of the tests which were run.

Fast forward to the late 1980's and early 1990's through today.  Managed care dictates pathways to which physician's must adhere when treating patients. A patient presenting to the ER with abdominal pain now goes through a much different plan of care with a more narrowed and structured set of testing which is performed, often causing longer ER stays and delays while requested testing is approved by insurance carriers.

The pathways were set up to curb over-ordering of services and decreasing costs. One way managed care organizations try to discourage use of ERs (they prefer patients to see their primary care doctor first if at all possible) by having a much higher copay for ER services. The reasoning behind this is primary care doctors are usually much more aware of how an insurance plan work, spend more time with the patient, and thus overall reduce costs by ordering tests which are more likely to identify the problem. ER physicians are under more time constraints and may not always check what insurance the patient has before running test. Thus, except for real emergencies, the patients and the insurance company are paying much less for care by using primary care physician versus the ER.

Do you think patients with managed care insurance are influenced by differences in copay amounts between the PCP and ER? Do you think the average person really understands managed care?

Solutions

Expert Solution

Managed Care Insurances are are type of financial cover provided by the insurance companies for the patients at reduced costs. They make up network plans with the help of primary care providers to provide medical facilities to the patients. The reason why the PCP's are more preferred than the ER's is because of this reason that the PCP are more vigilant about the insurance plans that the patients have been covered under than an ER doctor.

PCP are the the local doctors who are found practicing within the local vicinity and are thus much familiar with the patients and the surrounding environment. They are usually known for devoting quality time with the patients as compared to ER doctor who is usually found in a hurry. Under ER supervision you will notice that since the doctors are always short on time they tend to rely on medical tests rather than actual manual checkup to determine the illness. This leads to a hefty bill caused to the patients unnecessarily, Whereas the PCP will more likely determine the illness by talking to the patients and determining the actual tests that needs to be conducted and not beating around the bush.

Accordingly, it is worth noting that in case of emergencies also, the PCP will be the fastest resort that one can take. As the proximity of these are much faster than a ER, it is always a good idea to take the patients to a nearby PCP first and if the health deteriorates drastically then considering a shift to ER will be the best option.

Also to note here is that, Insurance providers take a longer time to cross check the tests that have been recommended by ER doctors that whether they are covered by the insurance plan taken by the patients or not. While on the other hand, since the PCP doctor is well known to the patients he is well aware of the plan the patient is covered under and hence will recommend only those test which are allowed within the plan.

Hence, to conclude, even though most of the newer generation patients are not much aware of what the managed care plans and PCP's are, they should gain some knowledge about them and take more advantages of the same because of the several benefits mentioned above.


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