Question

From a market power perspective, what contracting advantages and disadvantages accrue to the provider of care, and 3rd party payers relating to quality assurance, payment, and cost control?

Answer 1

Answer

Managed Care provides reasonably priced healthcare:

Regarding qulaity assurance they can take little advantage since they have market power and can maintain the price as per them since the supply is only from very few companies.

Regarding payment and cost control as well they have added advantage as there are few competitors they can can maintain cost control as most of ssales happen from few they can have better unit economics by which cost control can be attained.

For explain :

Managed care plans are a type of health insurance. They have contracts with health care providers and medical facilities to provide care for members at reduced costs. These providers make up the plan's network. How much of your care the plan will pay for depends on the network's rules.Plans that restrict your choices usually cost you less. If you want a flexible plan, it will probably cost more.

Advantages

1. Low Cost

The main goal of managed care providers is to provide the absolute best quality care possible, for the least amount of money. This is a great benefit of these types of health care plans. This is accomplished through the contracts that are set up with doctors and hospitals.

2. Accredited Care

All of the doctors and health care providers that are contracted through managed care plans have to pass a very in depth accreditation process in order to be approved for their network of care providers. This further ensures the quality of care that is available.

3. Cheaper Prescriptions

Along with the initial visits, medications are also covered underneath these plans. This greatly reduces the cost of already expensive medications. For many, this is the main reason for appeal to these managed care plans. Some people need medications in order to live a healthy life, and many of these medications are ridiculously high priced.

Disadvantages

1. Restricted Care

Since you can only visit doctors that are in your managed care provider’s network, you are very limited as to who you can see. Many doctors are instantly out of your reach with these plans.

2. Strict Approval

Insurance companies are businesses, meaning their primary goal is to make a profit. Because of this, the things that they are willing to fully cover, or cover at all, is very strict. Many people with preexisting health conditions and problems are out of luck.

3. Referral Problems

It is not uncommon for a doctor to refer you a specialist when a problem is out of his scope of practice. They do not concern themselves with finding out if that doctor is in your care network, meaning you cannot go to see them, and if you do the cost will come fully out of pocket.