CESifo DICE Report 3200315 - PDF document

CESifo DICE Report 3/200315 ANAGEDEPUTATIONBUTTEFANprocess of health care services.It also refers to anintegrated system of provision,where financingand production are governed by one source.Thean efficient way (see Frech III et al.2000).Thebursement schemes.care market.The insured have an informational(hidden action).Likewise,a provider can hidelimit the costs.These informational asymmetriespatible contracts.Different forms of managed care exist,includingIndependent Practice Associations (IPAs).Theysion of services.An HMO is an integrated productsource.In PPOs and IPAs the degree of integrationis less accentuated.Since an extensive literaturenizations (see,among others,Glied 2000,andSchumann and Amelung 2000),this article focuseson managed-care measures available,and on thecountries.Instruments of managed careinto two groups.The first refers to forms of con-tracts,the second includes measures that addressForms of contractselected individuals or a group of providers,andpatient and out-patient care.Given its marketpower,a managed-care organization can achievelower prices for services and,thus,reduce the costs.Targeting experienced physicians with a high repu-tation ensures the quality of provision.Thisproviders.For instance,it is well-known that theber of operations a surgeon performs per year.directly select health car

e providers,the insurer (oras in the US,the employer) contracts with a man-aged-care organization,fixing the terms underwhich the insured should be treated (range,priceand quality of services).Then,the managed-care * Prof.Dr.Stefan Felder,Faculty of Medicine and Economics,Otto-von-Guericke University of Magdeburg;stefan.felder@ismhe.de incentives for physicians.A Fee-For-Services (FFS)scheme reimburses specific services,leaving therisk of high costs entirely to the insurer.In a staff-model HMO,physicians are paid a fixed salary.Again,the cost risk remains with the insurer.While,the HMO can control its physicians,physi-tives for high quality and low cost provision.Of aquite different nature is a capitation system,wherefor each enrollee,irrespective of his/her healthcare utilization.Here,the incentives for reducingplace on the market for health care services.Ifsensitive,then capitation ensures both the qualityand the cost goal.Under different circumstances,expected treatment cost,and,therefore,impose aburden on the system.In this case,partly relying onIn general,managed-care organizations use a mixed-reimbursement scheme.In ambulatory care,capita-cases.Alternatively,a fixed salary or a reimburse-ment based on FFS is employed,and complementedby incentives to control the costs.The contractThe choice of providers is restri

cted for the insuredcovered by managed care.HMO enrollees,except foremergencies,always must first visit the HMO physi-cian.In less integrated systems (PPOs and IPAs),thegeneral practitioner is the person to contact.He thenacts as a gatekeeper,treating or referring the patientto a specialist or a hospital.Sometimes demand-sideco-insurance is also used in managed-care policies.However,the extent of patientsÕ co-payments is lessinsurance policies,increasing the attractiveness ofmanaged care for the consumers.social health insurance.Managed care contractssometimes cover additional services,such as pre-ventive and maternity services.But it also works inthe other direction,that is,some services areplans.The danger with optional coverage is thatinsurers try to skim off the good risks,which ofinsurance.improvementsystem.It refers not only to patients but also tophysicians.The gatekeeper is supposed to overlookthe whole treatment process of a patient,that is,tocoordinate the part of other providers.He may alsomedical data.A cost sharing contract usually goesalong with gatekeeping.Treatment guidelines and standard operating pro-care.These guidelines refer to the treatment of cer-tain illnesses,the decision process between physi-Drug formularies,a special form of guidelines,specify a list of approved pharmaceuticals,typical-and S

teiner 1998).These formularies often pre-scribe generics instead of brand drugs.aged care measures.They prevent physicians from2000).They refer to the specific case and instructexternal referees who decide on the adequacy ofthe therapy. have declined.However,this perception contrastsaged care (see Robinson 2000).Glied (2000) ascer-HMOs are in the range of 10 to 15 percent,compa-rable to earlier surveys.Other researches show aneven stronger effect in case studies.Cutler et al.(2000),for instance,discovered in the fields ofconventional insurance coverage.2000).Consumer satisfaction tends to prefer con-not all) populations (Miller and Luft 2002).Thismanaged care.Managed-care enrollees are moreance policy.Switzerlandemerged in 1990.The first network of primaryphysicians,a kind of PPO,was introduced in 1994.tered new forms of health care organizations.Afterwards,managed care began to grow.In 2000,The euphoria,however,has been dampened inrecent months.Although the demand for manageddown,cost savings are said to be the consequence ofa favorable risk selection.Again,this contradicts sci-entific evidence,which has recently estimated a costadvantage for managed care of 16 percent,even ifrisk selection is factored in (see Werblow 2003).ThisStock 2002).Since a risk selection bias is always aproblem with aggregate data,it is import

ant to lookforms of insurance on cost and quality of care.The outcome of treating hypertension in differentsettings was studied in Baur and Stock (2002).Themanaged-care and conventional plans,while theaverage performance was poor in both forms.This institute has started to certify HMOs andPPOs.With respect to consumer satisfaction,againof a problem in Switzerland,as enrollees can with-ventional health insurance by the end of a year.very slow pace.Although PPOs in ambulatory carehave been legally possible since 1998,only a fewpilot projects have started since then.Major obsta-funds attracting high risk patients when they,forinstance,offer disease management plans.An inter-hands.Currently,sickness funds have no control overthe ambulatory sector,as they only contract with the association about the total budget.The present system is characterized by a non-sys-tematic application of managed-care elements.capped by physician-specific budgets.Hospitalsscheme,the G-DRG,which will start in 2004.Co-payments for patients are more or less absent,onlydrug use is covered by a fixed,package-size-relat-ed co-payment.The reform of social health insur-ance,currently in the pipeline,will not produce anyand to foster quality of provision in health care.managed care,some consumers are rather disap-pointed.This may have to do with the fact