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What CMHCs can learn from two states' efforts to capitate Medicaid benefits.

If the Clinton health care reform package becomes law, community mental health centers will face challenges similar to those recently encountered by centers in several states under new Medicaid initiatives to capitate payments for mental health care. The authors summarize experiences and research findings from centers in two states using two different models: in Minnesota, a mainstreaming model in which Medicaid contracted with health maintenance organizations (HMOs) to provide all physical and mental health care for its beneficiaries, and in Utah, a mental health HMO model in which community mental health centers signed contracts to serve as mental health HMOs for Medicaid beneficiaries. Several implications for CMHCs under managed competition are discussed, including the need for centers to play a strong, proactive role in the establishment of benefit alternatives and enrollment processes and the need to implement aggressive policies to manage service utilization.

Capitation Fee↗

The role of the coordinator of care.

Regardless of the specific outcome of the current health reform debate in Washington, it is likely that major changes to the health care system are in the offering. These changes, many of which are already in place or imminent in some locations, will have a major impact on the evolving relationships between physicians and hospitals. Most expect that these changes will accelerate the development of integrated health care delivery systems that will compete in the marketplace for a mixture of public and private health insurance dollars. In this system of "managed competition," health care dollars will flow to those systems that can ensure the best clinical outcomes while using the least economic resources. In this scenario, competing collaborative health networks that can manage the continuum of care will be central to the health care delivery system. The economic and political ties between physicians and hospitals will become more closely linked as government and private payers of health care services foster the development of these integrated, value-based health care delivery systems.

Continuity of Patient Care↗

Strategic resource management.

No one in healthcare can challenge the fact that expense reduction is and will continue to be one of the primary concerns of the industry. Everyone also knows that these cost pressures are merely beginning. All indications point to a future environment of intense competition, managed care based on cost-per-covered-life reimbursement, reduced reimbursement from Medicare and Medicaid, and further reconfiguration of the industry to shift patients from in- to out-patient settings. When we focus on the future, the $64,000 question is: "What is the healthcare industry doing to control non-labor expenses, and who is responsible for this ambitious undertaking within each hospital or network?" With nearly 30% of every hospital dollar consumed by non-labor expenses, are current efforts adequate to meet future demands? This article focuses on a strategic plan for reducing non-labor expenses.

Contract Services↗

Medicaid managed care: can health plans survive on the government's payments?

The Clinton plan's emphasis on market-driven managed competition, coupled with ever-increasing Medicaid costs, has placed the U.S. health care system on the threshold of significant change. By limiting the growth of premiums, the plan will encourage insurers to negotiate managed care contracts with providers. In this article, the authors discuss how individual states, faced with increasing costs and stretched budgets, have attempted to administer Medicaid programs within a managed care system.

Health Care Reform↗

How Hermann Hospital is saving resources through enterprise-wide reengineering.

Hermann Hospital, a 650-bed tertiary care facility and teaching hospital (Houston, TX), recognized the need for institution wide reengineering if they were to remain viable in a changing healthcare environment. Having already implemented total quality management (TQM) programs in various departments, Hermann wanted to provide a comprehensive line of healthcare services that worked cohesively with other areas, such as business development, community relations, and finance, and to do it competitively. Management knew that anticipated changes would require a holistic understanding of their system, so that reengineering efforts in one area didn't ¿break things¿ in another.

Cost Savings↗

UMDNJ and managed care.

Managed care organizations and academic medical centers initially have been at opposite ends of the cost containment spectrum. UMDNJ, the largest free-standing health care university in the United States, responds to the competitive managed health care market.

Academic Medical Centers↗

'Responsible choices': the Jackson Hole Group plan for health reform.

"Responsible Choices" identifies the actions that the private sector and government should take to improve the U.S. health care system and accelerate and expand the health care revolution that is already underway. Policy proposals are made for Medicare; Medicaid; reforming the tax treatment of health insurance; insurance reforms and expanding group purchasing opportunities; and improving the availability of comparative information on health benefit offerings, quality accountability, and cost and coverage data. The recommendations refocus the Jackson Hole Group's original managed competition proposals contained in The 21st Century American Health System (1991).

Health Care Reform↗

Mergers: enhancing human resources management.

The health care industry is experiencing merger mania, but the majority of its current leadership underestimates the importance that significant differences in corporate culture and employee morale play among physicians and others in implementing such organizational objectives as enhancing access, reducing cost, and improving quality of care. The key human resources management issues are discussed that are too often overlooked and frequently sidetracked in the formation of powerful health networks now so prevalent in almost every metropolitan region. The authors conclude that in America's intensely competitive managed care environment, there are a number of critical human resources management ingredients that deal makers need to achieve from these mergers in order to ensure their perceived objectives: (1) paying far greater attention to variations in corporate culture and employee morale; (2) reducing total salary and fringe benefit costs; and, (3) concurrently recruiting and maintaining a qualified and stable workforce that focuses more decisively on clinical-fiscal concerns so as to improve quality of patient care at a lower cost.

Employment↗

Factors affecting primary care physicians' perceptions of health system reform in Israel: professional autonomy versus organizational affiliation.

This paper examines primary care physicians' perceptions of a National Health Insurance Law that introduced managed competition into Israel's health care system, and the factors affecting their perceptions. Between April and July 1997, we conducted a mail survey of primary care physicians employed by Israel's four health plans (which are managed care organizations). Eight hundred questionnaires were returned, representing a response rate of 86%. The findings indicate that, overall most physicians support the components of the National Health Insurance Law with statistically significant differences among physicians by health plan. Multivariate analysis revealed that, contrary to theoretical expectations, a perceived decrease in professional autonomy and in the status of the profession following reform did not significantly affect attitudes toward national health insurance. These findings highlight the need for additional empirical studies to further examine theoretical contentions about the implications of infringing on the professional autonomy and the dominant status of physicians. The principal and most interesting finding of this study was the independent effect of health plan affiliation on physicians' attitudes toward each of the five components of the National Health Insurance Law, after controlling for background characteristics, for the reform's perceived effect on the physicians' autonomy and status in the health plan, and for the reform's perceived effect on the level of health plan services and the health plan's financial situation. We found that physicians' perceptions tended to conform to the formal position of their health plan, suggesting the need to analyze the attitudes of physicians in their organizational context, rather than treating them as members of a uniform professional community.

Adult↗

Government-managed healthcare. More for less or less for more?

According to Cato Institute chairman William A. Niskanen, government-mandated managed competition will fail to control healthcare costs and will pose a serious threat to the quality of American medical care. Mr Niskanen elaborates on this viewpoint in the following remarks, which were originally delivered in a speech.

Community Participation↗

What kind of healthcare 'internal market'? A cross-Europe view of the options.

Many governments are trying to invent new types of 'internal' healthcare market that will expose health services to competitive pressures to innovate, contain costs, raise service quality, and respond better to consumer demands; but not expose them to 'market failures' which prejudice universal access to 'basic' health services. Policy debates in this area are muddled and constricted by a failure to differentiate the variants of internal market that are available. This article outlines a taxonomy of the main types of internal market: primary doctor purchasing; managed competition; competitive bidding; social insurance; and compulsory private insurance. It notes their main structural characteristics and differences. Although internal market reforms have been intended to support the commercialization of healthcare, the idea of designing new types of economic structure to avoid market failure in healthcare has wider and more radical implications than most policy-makers intend.

Competitive Bidding↗

Financial risk, accountability and outcome management: using data to manage and measure clinical performance.

As health care reform and components of managed competition begin to infiltrate the health care system, health care providers will be facing significant challenges over the next several years in responding to priorities that mandate the delivery of appropriate, comprehensive, cost-efficient high quality care. Changes in financial risk, increasing accountability, performance documentation, and outcome measurements will hold providers more responsible for the input and output of services provided. In an effort to respond to these challenges, health care providers will have to rely on integrated data systems to identify opportunities for improvement in an effort to more effectively manage and measure the impact of health care delivery as patients move through the health care system.

Competitive Medical Plans↗

Why managed care has failed to contain health costs.

Much evidence points to the fact that managed care plans (health maintenance organizations and preferred provider insurance) reduce costs and offer value for money. Yet they apparently have not helped to slow national health expenditures. One explanation is that the practices of purchasers (including government and employers), the tax laws, and other market imperfections have reduced the demand for real cost containment, depriving managed care plans of an adequate incentive to cut cost and price. These market conditions can and should be corrected; the managed competition proposal being discussed at the national level is a comprehensive plan for doing so.

Competitive Medical Plans↗

Strategic market analysis: an effective tool for collaboration.

If collaboration, not unrestrained competition, is part of the answer to containing health care costs, providers must choose their partners carefully. Competition won't disappear. It's here to stay. But many in our industry have come to the conclusion that increased collaboration is necessary to preserve community health care resources and prevent wasteful duplication of services and technology. Managed competition--a combination of government regulation and free markets--means simply that collaboration and competition will coexist in a new health care environment evolving toward integrated delivery systems of varying kinds.

Economic Competition↗

Managing the health care system under a global expenditure limit: a workshop summary.

There is ongoing debate as to whether global budgets, or expenditure limits, are compatible with a strategy for managed competition. The Robert Wood Johnson Foundation sponsored an invitational conference for public and private policymakers to discuss the issue. The meeting's purpose was to explore how global expenditure limits might work and what their implications would be for costs, access, and quality of health care. This article summarizes the ideas presented at the conference, looking in particular at global expenditure limit models in Germany and Canada. Overall, the papers and presentations at this meeting demonstrated that global expenditure limits have the potential to provide the necessary fiscal discipline to manage the health care system and provide a greater degree of certainty and accountability for payers, providers, and patients. However, it is also clear that without a common set of principles about the role health care should play in our society and an agreed upon framework of governance for the system, it will be difficult for the United States to resolve the detailed and complex implementation and administration issues of a reformed health care system.

Budgets↗

All together now.

Integrated health plans, in which doctors, hospitals and insurers join forces to manage care, are a cornerstone of the "managed competition" approach to health care reform. But it's not clear that these longtime adversaries are ready to work together--or that consumers will be happy if they do.

Choice Behavior↗

The state of American management.

Every year, the president of the United States offers his State of the Union address. Here, from one of the most respected managers in America, is a report on the State of American Management. The state of management, says Walter B. Wriston, is good. Despite the predictions of America's decline, our economy continues to prosper. That is because of this fundamental truth: the United States is the only country in the world that renews itself daily. This is the Age of Pluralism, and U.S. business is based on pluralism. The spirit of the entrepreneur has entered the mainstream of U.S. management, transforming bureaucracy and emphasizing leadership. Today's top executives need to be more like politicians than the number-crunchers of yesterday. At the same time, information is flowing more freely, so corporations are eliminating layers of managers who were really just transmission lines. And top managers are learning to listen to the people who are closest to the work. Everyone today is a knowledge worker. The accelerating pace of knowledge has put a greater premium than ever on talent. Globalization is a big part of this new world. From the manager's viewpoint, globalization means that "you're in a marketplace where you're suddenly waking up with a guy...from a country you're not too sure where it is, who's eating your lunch in your hometown." To understand global competition, managers in large and small companies need broad vision. Finally, to deal with change, U.S. managers must confront some issues at home. For instance, our accounting systems are obsolete, both in companies and in our national accounts.(ABSTRACT TRUNCATED AT 250 WORDS)

Administrative Personnel↗