Ethical Issues In Managed Care

According to Darr (2011), “Simply put, managed care is an organized effort to control the costs of health services through various means” (p. 296). Managed care organizations provide care to Medicaid and Medicare patients. These organizations incur massive amounts of costs to reimburse medical facilities for treatment of enrollees. Darr (2011) states, “Managed care has emerged as a primary means of organizing and financing health services delivery. Like marketing, managed care is not new to health services, but its prevalence, coupled with quality and cost pressures, raise complex ethical issues that will challenge management” (p. 287). In an effort to keep costs at a reasonable level and from spiraling out of control; tactics are emplaced

These rules are in place to reduce costs, though, these delays have potential to increase costs. According to Darr (2011), “By employing a complicated process (e.g., significant committee involvement and several levels of review), the MCO may be slow to approve use of new procedures, techniques, or equipment that raise costs” (p. 301). Cost savings do not necessarily derive from changes or participation in programs. The cost variables and savings derive from lower reimbursement rates to hospitals and physicians pay-for-fee practices. Darr (2011) states, “For example, in the 1990s, U.S. Healthcare, a large HMO, doubled its profit margin in 2 years by cutting the fees paid to doctors and hospitals 12%–20%, not by enhancing productivity or quality”

Saunier (2011) states, “The genesis of the growth of health care costs stems from the advent of the third-party payor, such as insurance companies” (p.22). The advantages of controlling costs are providing the community with readily available and quality care at prices lower than those of the for-profit organizations. Less constraints give patients more autonomy with physicians and have potential to provide more revenue to the organization. The disadvantages are equally important. Strict rules and regulations may reduce quality of care and dissuade physicians from participating with different managed care