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Show Hinckley Journal of Politics 2006 Table 2 Total National Membership in MCOs-percent of total population Year 1976 1980 1985 1990 1995 1998 2000 2003 2004 Percent 2.8 4 8.9 13.4 19.4 28.6 30 24.6 23.4 Source: NCHS (2004a). Note: the report by the NCHS lists several different types of HMOs, all of which are included in the statistics cited above. The NCHS uses the following definition for their report: HMO: "a health care system that assumes or shares both the financial risks and the delivery risks associated with providing comprehensive medical services to a voluntarily enrolled population in a particular geographic area, usually in return for a fixed, prepaid fee." This definition, in practice, encompasses almost all MCOs as they are defined in this report. Therefore, the term MCO has been substituted into this table, as it is interchangeable for the purposes of this report. The two tables above illustrate the connection between MCO market penetration and the rate of personal healthcare costs. From 1990 - 2000, the rate of growth of personal health expenditures was, on average, the lowest among all available data. Simultaneously, those years saw the largest rate of growth in MCO market share and the largest total per-centage of the population enrolled. Furthermore, a recent, general movement away from MCOs after the year 2000 has seen a new resurgence in personal healthcare costs. This impact has been especially significant given that few °ther options have been effective - or even available, for that Matter - to help curb the steady increase of healthcare costs *ft America, which have consistently out-paced economic inflation. How MCOs Work There are basically two general types of MCOs: Health Maintenance Organizations (HMOs) and Preferred Provider Organizations (PPOs). (While every organization differs in exactly how they are administered and managed, for the purposes of this paper they will all be generally referred to as MCOs, since they usually share a common set of general, basic traits, unless otherwise specified. However, the actual terms and definitions used to define different programs differ depending on each particular source, with many simply using the blanket term HMO to refer to most organizations that manage patient care.) HMOs form the bulk of MCOs. They saw a steady rise in enrollment throughout part of the 1980s and all of the 1990s, topping out with 30.1% of the population enlisted in 1999 - roughly 81 million Americans (Enrollment in health maintenance organizations, 2004). Enrollment has since started to decline slightly, but it is estimated that HMOs still provide health coverage for at least a quarter of the American population. In addition to providing insurance services, HMOs commonly own (or employ exclusively) specific doctors, clinics, and even entire hospitals. Therefore, patients insured by an HMO are usually covered only when they attend providers that are part of this "network". This network of doctors, specialists and hospitals is usually tightly controlled and regulated by the HMO. All members of the network are subject to the terms of the contract they hold with the HMO, which often spells out which procedures will be covered and how much the company will pay for them. Members of the network are also required to meet and maintain certain standards of quality - thus allowing the HMO to guarantee quality care regardless of which doctor the patient sees. Since the HMO gets to decide which procedures will be covered and when, they can cut what they believe is unnecessary or ineffective care out of their coverage. If the HMO decides that a patient does not, in fact, need a procedure that they - or even their primary physician - want done, the HMO will usually refuse to pay. HMOs can also dictate which kind of treatment a patient receives; if several different types are available, the HMO can choose to offer or cover only one or some of them, allowing them to choose the one that costs the least or offers the highest medical benefits and/or financial rewards. (In the classic model, these decisions were made by a panel of doctors at the top of the organization, but recently these executive boards have become increasingly dominated by administrators, not actual care providers.) PPOs operate in much the same way as HMOs, but do not usually own (or even necessarily contract with) the doctors or hospitals in their network. The providers who wish to be members of this network must simply agree to the terms of the contract set forth by the PPO, rather than being directly employed. These plans often include many financial and quality stipulations that are similar to HMO agreements, as members on a PPO's panel must agree to certain reimbursement rates for their services and uphold certain standards of quality. Also, since they are not directly employed by the PPO, panel members are somewhat more autonomous than their HMO counterparts, and are thus often granted more leniency in referring patients to specialists. However, PPOs are often slightly less involved in the care of their patients, doing less than HMOs in terms of keeping up on their patients' medical treatments and history. This is largely due to the more autonomous nature of the plan's providers and 75 |
