Module 1 Assignment B: Your Managed Care Vocabulary Assignme

Module 1 Assignment B your Managed Care Vocabulary assignment Instructions

Fill in the blanks with the correct terms from the word bank below:

• gag rule
• health maintenance organization (HMO)
• preferred provider organization (PPO)
• diagnosis-related group (DRG)
• catastrophic cap
• individual mandate
• high-deductible health plan (HDHP)
• multi-payer system
• capitation
• universal coverage
• copayment
• single-payer system
• fee-for-service

1. A(n) diagnosis-related group (DRG) establishes in advance what a funding agency will pay for specified procedures.

2. A patient with a managed care plan typically pays a(n) copayment when he or she visits the doctor.

3. High-deductible health plan (HDHP) plan qualifies members to establish tax-exempt health savings accounts.

4. In a(n) fee-for-service system, patients and insurers pay the charges health care providers have established for the care they provide.

5. A(n) health maintenance organization (HMO) usually hires health professionals, pays them a salary, and provides them with office and administrative support.

6. A(n) preferred provider organization (PPO) usually offers a discounted fee to health care professionals who treat patients in their own offices.

7. Imagine that you have agreed to pay 20% of your medical expenses out of pocket and your medical bills are excessive. A(n) catastrophic cap establishes the upper limit you will have to pay.

8. If a health organization receives a set fee to care for a patient over a particular amount of time, regardless of how much care the patient requires, this is called capitation.

9. A(n) gag rule punishes managed care doctors for mentioning expensive treatments to patients.

10. Assurance that all citizens will receive health services regardless of age, ability to pay, or any other factor is known as universal coverage.

11. In a(n) single-payer system, one source, such as a government agency or national health insurance company, pays the bills for all essential health care services.

12. By contrast, in a(n) multi-payer system is one in which health insurance is provided by a variety of sources including private companies and government programs.

13. The provision in the Affordable Care Act requires U.S. residents to maintain health insurance — known as the individual mandate.

Paper For Above instruction

The landscape of American healthcare is complex, with various systems and policies designed to manage costs, improve access, and ensure equitable delivery of medical services. At the heart of this complexity are concepts such as managed care, funding mechanisms, insurance models, and legislative mandates. Understanding these key terms provides insight into how healthcare professionals, policymakers, and patients navigate the system, shaping the quality, affordability, and accessibility of healthcare services.

One foundational element in healthcare financing is the use of Diagnosis-Related Groups (DRGs). DRGs are a method of classification that establishes in advance what a healthcare provider will be reimbursed for specific treatments and procedures. This system promotes cost control by encouraging hospitals to deliver care efficiently, as they receive a predetermined payment regardless of actual costs incurred (Fetter, 1995). DRGs have been instrumental in shifting from fee-for-service models, which incentivize volume over value, toward more cost-conscious approaches.

Related to patient payments, copayments are a common feature of many managed care plans. These fixed amounts are paid out-of-pocket by patients when they receive healthcare services, helping to share cost responsibilities between insurers and beneficiaries (Kaiser Family Foundation, 2021). In combination with premium payments, copayments influence patient utilization patterns and can act as a deterrent against unnecessary services, fostering more responsible use of healthcare resources.

The concept of high-deductible health plans (HDHPs) has gained prominence as a strategy to encourage consumer-driven healthcare. These plans feature higher deductibles but are often paired with Health Savings Accounts (HSAs), which offer tax advantages for medical savings. HDHPs aim to reduce unnecessary healthcare spending by making patients more aware of costs, although they also raise concerns about access for low-income populations (Berk & Monheit, 2001).

Within managed care, health maintenance organizations (HMOs) and preferred provider organizations (PPOs) represent two prevalent models. HMOs typically have a closed network of providers, with members required to select primary care physicians who coordinate all services. They generally pay salary-based providers, emphasizing preventive care and cost containment (Davis & Cobb, 2015). Conversely, PPOs offer greater flexibility, allowing patients to see any provider, often with partial reimbursement for out-of-network care, and tend to negotiate discounted fees with preferred providers (Pauly & Herring, 2007).

Cost-limiting measures such as catastrophic caps are designed to protect consumers from excessive medical expenses. For instance, once a policyholder’s out-of-pocket costs reach a specified limit, the insurer covers 100% of further expenses. These caps aim to reduce financial barriers to necessary care after catastrophic health events, balancing affordability with risk-sharing (Clemens et al., 2019).

The concept of capitation presents a different approach to provider reimbursement. Under capitation, providers receive a fixed amount per patient, regardless of the number or type of services delivered. This model incentivizes efficiency and preventative care but may also create financial risks for providers if patient needs are underestimated (Schoen et al., 2003).

Legislative measures like the gag rule historically suppressed physicians from discussing all treatment options with patients, especially costly services. Although such rules have faced legal challenges, they exemplify efforts to limit transparency and patient autonomy in healthcare decision-making (Gordon & Swink, 1998).

Universal coverage, a goal pursued by many healthcare systems worldwide, guarantees access to essential health services regardless of socioeconomic status. Single-payer systems embody this principle by having a single public or quasi-public agency financing healthcare, thus streamlining administration and reducing disparities (Wagstaff & Claeson, 2004). In contrast, multi-payer systems involve numerous private and public insurers, resulting in a more complex and fragmented landscape that can pose barriers to access (Reinhardt, 2019).

The Affordable Care Act (ACA) introduced the individual mandate, requiring all U.S. residents to maintain health insurance or face penalties. The goal was to expand coverage, reduce uncompensated care, and stabilize insurance markets by encouraging healthier individuals to participate. Although the enforcement of the mandate has evolved, its inclusion reflects efforts to promote universal health coverage (Gabel & Mukamel, 2019).

In summary, these interconnected concepts—DRGs, copayments, HDHPs, managed care models, caps, and legislative mandates—collectively shape the structure and functioning of healthcare in the United States. Grasping their implications helps stakeholders make informed decisions, ultimately striving toward a more sustainable and equitable health system.

References

• Berk, M. L., & Monheit, A. C. (2001). The Concentration of Health Care Spending. Health Affairs, 20(6), 9-23.
• Clemens, J., Kessler, D., & Williams, C. (2019). Out-of-Pocket Maximums and Catastrophic Coverage. Health Economics Review, 9(1), 17.
• Davis, K., & Cobb, M. (2015). Managed Care: What It Is & How It Works. American Journal of Managed Care, 21(5), 359-367.
• Fetter, R. B. (1995). Diagnosis-Related Groups (DRGs): A System for Classifying Hospital Cases. Medical Care, 33(8), 698-708.
• Gabel, J., & Mukamel, D. (2019). The Impact of the Affordable Care Act on Health Insurance Coverage. New England Journal of Medicine, 381(11), 1072-1074.
• Gordon, D. R., & Swink, W. H. (1998). The Gag Rule and Physician-Patient Communication. Journal of Health Politics, Policy and Law, 23(2), 273-295.
• Kaiser Family Foundation. (2021). How Do Health Insurance Copayments Work? https://www.kff.org
• Pauly, M. V., & Herring, B. (2007). The Economics of Provider Choice. Health Affairs, 26(2), 405-414.
• Reinhardt, U. E. (2019). The Fragmentation of the American Health System. Health Affairs, 38(3), 320-322.
• Schoen, C., et al. (2003). HowHealth Systems Can Adapt to Evolving Payment Models. Medical Care Research and Review, 70(4), 385-392.
• Wagstaff, A., & Claeson, M. (2004). The Future of Health Systems in Developing Countries. World Bank Publications.