BusinessFinanceHealth ReformPolicy & LawPublic Health

Narrow Networks and Medicare Advantage: The True Meaning of Managed Care?

1 Mins read

managed care medicare advantageUnited HealthCare and other Medicare Advantage plans

managed care medicare advantageUnited HealthCare and other Medicare Advantage plans are dropping numerous providers from their networks, to the consternation of members given short notice of the changes. Predictably, the story is presented as big bad insurance co. vs. grandma, but the real story is less clear-cut.

For years, Medicare Advantage plans have benefited from a regulatory structure that pays them more than the average Medicare fee for service cost for parallel populations and asks the plans to provide some addtional services to beneficiaries in return for the bonus payments. The reimbursement has been attractive enough to keep numerous insurance companies involved in Medicare Advantage.

Thanks to the ACA, however, the munificence of the federales is being cut back, and the reductions in Medicare FFS payments over time were projected by the CBO in 2012 to yield a $156B reduction in Medicare Advantage payments in the years 2014 through 2022 (see link to projections in Kaiser Health News article linked to above). While this represents only something like half a percent of the projected total U.S. health care spend over the years in question, it is of course a larger percentage of the Medicare Advantage budget, and it may reasonably cause some plans to rethink their strategies.

One managed care strategy that has long seemed incompatible with broad notions of the right to freedom of choice is the notion of establishing narrow networks. By establishing narrow networks, managed care plans have the opportunity to, um, manage care. Cost and quality metrics may be used to determine who’s in and who’s out. While it is not clear what decision rules are being used by Medicare Advantage plans in limiting their networks (academic practices and sole community providers of certain subspecialties were identified in the KHN article as among those axed), the point is that for managed care to work, the network must be managed. We’ve been kidding ourselves by pretending otherwise.

Related posts
FitnessHealth careHealth ReformPublic HealthWellness

Get Rewarding Results From Physical Therapy And Chiropractic Care

2 Mins read
Chiropractors make use of procedures such as manual therapies in terms of stretching and soft-tissue mobilization, posture exercises, and ergonomic training. Chiropractic…
Public Health

5 Public Health Crises Other Than COVID-19 That Still Exist

3 Mins read
The world has been stuck in a months-long crisis due to the COVID-19 pandemic. With normal life thrown into turmoil, it’s easy…
Health carePolicy & Law

5 Trends That Matter In The Senior Care Industry Right Now

3 Mins read
If there’s one thing the CoViD-19 pandemic has proven, it’s the fact that there is a greater need to protect senior populations….