Compare and contrast each of the three questions related to Managed Care Organizations, Medicare
Compare and contrast each of the three questions related to Managed Care Organizations, Medicare, and Medicaid with one another and explain how they were similar and different to each other.
- Managed care organizations emphasize physicians’ responsibilities to control patient access to expensive hospitalization and specialty care, a principle dubbed “gatekeeping.” Some argue that “gatekeeping” is unethical because it introduces financial factors into treatment decisions. Others say it improves quality by promoting the use of the most appropriate levels of care.
- Medicare is an area that often gets overlooked and is seen as a burden financially. Discuss alternatives to ease the drain on Medicare resources.
- Medicaid is shouldering an ever-increasing burden of cost for long-term care for the elderly, with enormous impacts on state budgets throughout the nation. Discuss alternatives to ease this drain on Medicaid resources.
Develop an APA-formatted essay discussing the three entities.
Describe what they are and how they differ. Include an introduction to let the reader know what will be found in the essay.
Create a table to provide comparison of the three entities. The table can be used as the body of the paper, or it can be added as an addendum after the Reference page. If you opt to add it as an addendum, refer to the table in the narrative in the body of the essay.
As in all essays, include a conclusion to provide a summary of the material. This assignment highlights your ability to do research and display information in a table format. Include citations, as appropriate, for information in the table. Refer to chapter 7 in the APA manual, specifically pages 223 -224 for information on tables using words for displaying information.
Required Source
- Sultz, H. A., & Young, K. A. (2017). Health care USA: Understanding its organization and delivery (9th ed.). Jones & Bartlett. Read Chapter 8.
The following specifications are required for this assignment:
- Length: 750 words
- Structure: Include a title page and reference page in APA style. These do not count towards the minimal word amount for this assignment.
- References: Use the appropriate APA style in-text citations and references for all resources utilized to answer the questions. Include at least two (2) scholarly sources to support your claims.
- Format: Save your assignment as a Microsoft Word document (.doc or .docx).
- File Name: Name your saved file according to your first initial, last name, and the module number (for example, “RHall Module 1.docx”)
Expert Answer and Explanation
Healthcare Finance
In the United States (US), healthcare is paid for or financed in a variety of ways. One of the ways is the out-of-pocket method where individuals pay directly for services they have been offered. The second way is private insurance. Other people have health insurance coverage as a tax-free benefit from their employer (Sultz & Young, 2017). Most working individuals are covered by employer-provided healthcare insurance, a managed care plan, such as a Health Maintenance Organization, or traditional indemnity insurance.
The third method is public insurance and programs. For instance, the government has Military Health Insurance to cover the health of military personnel and their dependents as well as veterans. Other health insurance programs run by the government include Medicare, Medicaid, and the State Children’s Health Insurance Program (SCHIP) (Sultz & Young, 2017). People often confuse Medicare, Managed Care Organizations (MCOs), and Medicaid. The purpose of this essay is to compare and contrast Managed Care Organizations, Medicare, and Medicaid by giving their similarities and differences.
The Three Entities
The first entity is MCO. MCOs are integrated organizations in the healthcare system focused on managed care as a method of reducing care costs while maintaining a high quality of care. The focus of MCOs is to reduce the cost of care while keeping the quality high. There are four types of MCOs (Seiler et al., 2022). The first type is Health Maintenance Organization (HMO). HMO manages care by requiring beneficiaries to see a network of health providers at a much lower cost.
It also needs beneficially to see their primary care provider (PCP) before any provider who is not in the network. The second type is Preferred Provider Organization (PPO). This form of MCO allows one to see any doctor they like, in the network or outside (Opoku et al., 2022). The beneficially may pay less for seeing an in-network provider and higher for the outside network provider.
The third is Point of Service (POS). This program combines HMO and PPO where one can see providers in and outside the network but at slightly higher costs. The last type is Exclusive Provider Organization (EPO) (Opoku et al., 2022). It also combines HMOs and PPOs’ features. Its costs are less than PPO but higher than HMO.
The second entity is the Medicare program. Medical is a federal health insurance program for some young people with disabilities, adults aged 65 years or older, and individuals with End-Stage Renal Disease (Agarwal et al., 2021). Drain in Medicare resources can be eased through the following alternatives. First, reducing unnecessary complications and preventable readmissions.
Complications and readmission increase the cost of care and thus puts more burden on Medicare (Committee for a Responsible Federal Budget, n.d). Second, the drain can be reduced by decreasing the use of high-cost drugs. Lastly, the program should use the value-based model to pay physicians where they are paid based on efficiency, quality, and care coordination.
The third entity is the Medicaid program. Medicaid is a health insurance program that provides health coverage to millions of US citizens, including children, low-income adults, elderly adults and people with disabilities, and pregnant women (Linder et al., 2018). States administer the program based on federal requirements. The program is funded both by the federal government and state governments. Drain in Medicaid resources can be eased through the following alternatives.
First. Physician payment should be modified to decrease unnecessary care. physicians should be paid using the salaried system with a relatively modest bonus for quality (Linder et al., 2018). The second way is to decrease the use of emergency departments (ED) by dual-eligible beneficiaries and children on Medicaid. Linder et al. (2018) reported that treating strep throat in ED costs $328, $122 in a primary care office, and the US $130 at an urgent care center. Based on their findings, many patients as possible eligible for Medicaid should be treated outside ED to ease the drain on Medicaid resources.
Similarities Between Medicare, Managed Care Organizations (MCOs), and Medicaid
The similarity between the three entities is that they all aim to improve access to care by reducing the cost of care. MCOs, Medicare, and Medicaid were developed to make healthcare in the US affordable. MCOs reduce the cost of care by ensuring that healthcare professionals in the networks use more effective treatments at low costs. Seiler et al. (2022) noted that MCOs reduce costs while maintaining the quality of care high. Medicaid and Medicare ensure care accessibility by paying for care services offered to eligible individuals.
Differences
| Managed Care Organizations | Medicare | Medicaid |
| MCOs are integrated organizations in healthcare system (Sultz & Young, 2017). | Medicare is a health insurance program. | Medicaid is a health assistance program |
| Private health institutions provide MCOs | Medicare is a federal program | Medicaid is a federal-state program. |
| Employees of an employer using MCOs and their dependents are eligible for MCOs benefits. | The program is meant for some young people with disabilities, adults aged 65 years or older, and individuals with End-Stage Renal Disease (Sultz & Young, 2017). | Low-income people of every age are eligible. |
| Funded by employers. | Funded by federal government | Funded by both states and federal government. |
Conclusion
The three entities have greatly reduced the cost of care and thus improved access to care in the US. MCOs have reduced the cost of care by ensuring that providers use efficient and cost-effective treatment methods. Medicare and Medicaid have reduced the cost of care by paying for most of the care services offered to its members. However, they are all different. Medicare is funded and run by the federal government. Medicaid is a federal-state program funded by both states and the federal government. MCOs are offered by organizations in the healthcare system and funded by employers.
References
Agarwal, R., Connolly, J., Gupta, S., & Navathe, A. S. (2021). Comparing Medicare advantage and traditional Medicare: A systematic review: A systematic review compares Medicare Advantage and traditional Medicare on key metrics including preventive care visits, hospital admissions, and emergency room visits. Health Affairs, 40(6), 937-944. https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2020.02149
Committee for a Responsible Federal Budget. (n.d). How to reduce Medicare spending without cutting benefits. https://www.crfb.org/blogs/how-reduce-medicare-spending-without-cutting-benefits
Linder, S. H., Aguillard, K., French, K., & Garson, A. (2018). Reducing the cost of Medicaid: A multistate simulation. Health Services Insights, 11, 1178632918813311. https://doi.org/10.1177/1178632918813311
Opoku, S. T., Apenteng, B. A., Kimsey, L., Peden, A., & Owens, C. (2022). COVID-19 and social determinants of health: Medicaid managed care organizations’ experiences with addressing member social needs. Plos One, 17(3), e0264940. https://doi.org/10.1371/journal.pone.0264940
Seiler, N., Horton, K., Pearson, W. S., Cramer, R., Adil, M., Bishop, D., & Heyison, C. (2022). Addressing the STI Epidemic Through the Medicaid Program: A Roadmap for States and Managed Care Organizations. Public Health Reports, 137(1), 5-10. https://doi.org/10.1177/0033354920985476
Sultz, H. A., & Young, K. A. (2017). Health care USA: Understanding its organization and delivery (9th ed.). Jones & Bartlett.
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FAQs
What are the major similarities and differences between Medicare and Medicaid?
| Feature | Medicare | Medicaid |
|---|---|---|
| Purpose | Health insurance for seniors (65+) and disabled | Health coverage for low-income individuals/families |
| Eligibility | Based on age or disability | Based on income and need |
| Funding | Federally funded | Jointly funded by federal and state governments |
| Administration | Managed by the federal government | Managed by individual states |
| Coverage | Hospital, medical, prescription drug plans | Varies by state; includes hospital, doctor, long-term care |
| Cost to Patients | Premiums, deductibles, and copays apply | Often low or no cost to eligible individuals |
Similarity: Both programs aim to improve access to health care and reduce financial barriers for eligible populations.
What is the difference between Managed Care Organizations (MCO) and Accountable Care Organizations (ACO)?
| Feature | Managed Care Organization (MCO) | Accountable Care Organization (ACO) |
|---|---|---|
| Purpose | Control healthcare costs through network restrictions and care management | Improve care quality and reduce costs through provider collaboration |
| Structure | Insurance-based organizations (e.g., HMOs, PPOs) | Groups of providers and hospitals working together |
| Payment Model | Typically uses capitation or discounted fee-for-service | Shared savings/risk under value-based payment models |
| Provider Network | Patients must use providers within a defined network | Patients can see any Medicare provider (for Medicare ACOs) |
| Care Coordination | Managed by the insurance company | Coordinated by providers for holistic, patient-centered care |
| Primary Goal | Cost control and efficient use of resources | High-quality care, patient outcomes, and cost savings |
What are the three main types of managed care organizations?
The three main types of Managed Care Organizations (MCOs) are:
Health Maintenance Organization (HMO) – Requires members to use a network of providers and choose a primary care physician (PCP) for referrals and care coordination.
Preferred Provider Organization (PPO) – Offers more flexibility in choosing providers, including out-of-network options, without needing referrals.
Point of Service (POS) – Combines features of HMOs and PPOs; members choose a PCP but can go out-of-network at a higher cost.
Each type balances cost, access, and care coordination differently to manage healthcare services effectively.
