Question

What is the difference between traditional fee for service and managed care? Describe the positive and negative effects of a system of prospective reimbursements of health care providers, i.e. a capitation or fixed payment per capita system.

Answer 1

#. The difference between traditional fee for service and managed care is :-

Tradition insurance:

-no incentive to managed delivery of health services and how the providers got paid.

-This led to cost being out of control and the development of Managed Care.

- insure pays a fixed monthly premium and 100% all bills till annual deductible then insurance pays up to maximum amount .

Managed Care:

-consisted of financing, insurance, delivery, and payment. -Most patients left tradition care to enrolled in this care because of the rising insurance cost.

-the negotiator of prices or payments with the providers.

- can delivery health insurance without being used by a company

- pay monthly premiums ,copays , and sometimes deductible.

#. Positive and negative effects of prospective reimbursement system of health care :-

Advantages:

• It makes payment considerably easier.

• There is a huge incentive to providers to be cost-conscience.

• There is a good incentive for providers to remain up-to-date on ways to controls costs.

Disadvantages:

• Technology changes — what makes sense for a bundle today may not make sense in three to five years.

• Revising bundles can be difficult, both technically and politically.

• Because revising bundles is difficult, a disincentive may arise for remaining up-to-date and using better technology.

• Accounting and distribution of overhead and indirect costs remains difficult.

• Addressing items that are not covered in the bundle can be a headache or worse