Cost Containment

For my article review, I choose to discuss one of week two topic on, analyze the impact of cost containment on the rising cost of healthcare. The article is entitled " Health Care Spending: Can the United States control it? " The author lists a number of cost control strategies, and each are discussed in some detail throughout the article. The author had about a dozen control strategies that can be used to contain cost. I will discuss five of them, for starters employer contribution methods , these are actions that increased the worker's share of health care costs. For example, a number of the plans were redesigned to eliminate basic coverage for certain types of care and transfer payment arrangements entirely under a major medical plan. Employers who insure their own benefits have greater control over plan design and, therefore, can control costs more directly.

Next we have,HMOS and competitions for example, driven by the passage of the Health Maintenance Organization Act of 1973, more employers have offered the choice of an HMO as an alternative to other health insurance benefits. HMOs cut costs through the use of fewer supplies, fewer workers per patients, fewer days in the hospital, etc. This has serious negative implications for quality care. The managed care companies' initial effort to control costs was to pay lower fees to all levels of providers. Managed health care, system of health-care delivery that aims to control costs by assigning set fees for services, monitoring the need for procedures such as tests and surgical operations, and stressing preventive care.

Cost sharing, major medical plans which cover several categories of expenses--eliminate "first-dollar' coverage and require cost-sharing by the employee through deductibles and coinsurance provisions. A deductible is a specified amount an insured individual must pay toward health care expenses before any benefits are provided by the plan. Slightly more than one-fifth of the plans increased the size of the deductible in existing major medical insurance policies between 1979 and 1984. Expenses in excess of the deductible are shared by the individual and the insurance plan on the basis of a specified coinsurance rate; plans typically pay 80 percent of covered charges, while the insured pays the remaining 20 percent.

Rationing, out costs for diagnostic and therapeutic mechanisms based on need. The author argues this; the developing and most comprehensive rationing mechanism will come from the new "outcome analysis." What this means is that someone will make a judgment about what "good" things came from a given test or treatment. The goal with this is to relate all diagnostic and therapeutic mechanisms to some acceptable "outcome" giving some acceptable level of "quality life years

Still another form of cost containment provided alternatives to care in a hospital. For