The ability of managed care to control health care costs: how much is enough? 2000

R Feldman
Division of Health Services Research and Policy, University of Minnesota, Minneapolis, USA.

This article argues that moral hazard is the main source of market failure in the health care sector. Cost sharing and managed care both are designed to control the extra costs of moral hazard. Managed care organizations (MCOs) have the potential to control costs by changing provider incentives away from excessive utilization of resources toward less costly and more effective treatments. However, MCOs have been given the wrong instructions by short-sighted employers who have overemphasized cost control. The solution is to give consumers more information and a choice of plans that emphasize different types and levels of cost control.

UI MeSH Term Description Entries
D008329 Managed Care Programs Health insurance plans intended to reduce unnecessary health care costs through a variety of mechanisms, including: economic incentives for physicians and patients to select less costly forms of care; programs for reviewing the medical necessity of specific services; increased beneficiary cost sharing; controls on inpatient admissions and lengths of stay; the establishment of cost-sharing incentives for outpatient surgery; selective contracting with health care providers; and the intensive management of high-cost health care cases. The programs may be provided in a variety of settings, such as HEALTH MAINTENANCE ORGANIZATIONS and PREFERRED PROVIDER ORGANIZATIONS. Case Management, Insurance,Insurance Case Management,Managed Health Care Insurance Plans,Managed Care,Care, Managed,Managed Care Program,Management, Insurance Case,Program, Managed Care,Programs, Managed Care
D009937 Organizational Objectives The purposes, missions, and goals of an individual organization or its units, established through administrative processes. It includes an organization's long-range plans and administrative philosophy. Goal Setting, Organizational,Goals, Organizational,Objectives, Organizational,Organizational Goals,Goal Settings, Organizational,Goal, Organizational,Objective, Organizational,Organizational Goal,Organizational Goal Setting,Organizational Goal Settings,Organizational Objective,Setting, Organizational Goal,Settings, Organizational Goal
D011639 Public Opinion The attitude of a significant portion of a population toward any given proposition, based upon a measurable amount of factual evidence, and involving some degree of reflection, analysis, and reasoning. Interest Groups,Pro-Choice Groups,Public Opinion Polls,Group, Interest,Group, Pro-Choice,Groups, Interest,Groups, Pro-Choice,Interest Group,Opinion Poll, Public,Opinion Polls, Public,Opinion, Public,Poll, Public Opinion,Polls, Public Opinion,Pro Choice Groups,Pro-Choice Group,Public Opinion Poll
D003363 Cost Control The containment, regulation, or restraint of costs. Costs are said to be contained when the value of resources committed to an activity is not considered excessive. This determination is frequently subjective and dependent upon the specific geographic area of the activity being measured. (From Dictionary of Health Services Management, 2d ed) Cost Containment,Containment, Cost,Containments, Cost,Control, Cost,Controls, Cost,Cost Containments,Cost Controls
D006264 Health Benefit Plans, Employee Health insurance plans for employees, and generally including their dependents, usually on a cost-sharing basis with the employer paying a percentage of the premium. CHAMPUS,Employee Health Benefit Plans
D012941 Social Responsibility The obligations and accountability assumed in carrying out actions or ideas on behalf of others. Obligation, Social,Responsibility, Social,Accountability,Communitarianism,Future Generations,Obligations to Society,Social Accountability,Accountability, Social,Future Generation,Generation, Future,Generations, Future,Obligations, Social,Responsibilities, Social,Social Obligation,Social Obligations,Social Responsibilities,Society, Obligations to
D017048 Health Care Costs The actual costs of providing services related to the delivery of health care, including the costs of procedures, therapies, and medications. It is differentiated from HEALTH EXPENDITURES, which refers to the amount of money paid for the services, and from fees, which refers to the amount charged, regardless of cost. Medical Care Costs,Treatment Costs,Costs, Medical Care,Health Costs,Healthcare Costs,Cost, Health,Cost, Health Care,Cost, Healthcare,Cost, Medical Care,Cost, Treatment,Costs, Health,Costs, Health Care,Costs, Healthcare,Costs, Treatment,Health Care Cost,Health Cost,Healthcare Cost,Medical Care Cost,Treatment Cost
D017063 Outcome Assessment, Health Care Research aimed at assessing the quality and effectiveness of health care as measured by the attainment of a specified end result or outcome. Measures include parameters such as improved health, lowered morbidity or mortality, and improvement of abnormal states (such as elevated blood pressure). Assessment, Outcome,Outcome Assessment,Outcome Assessment (Health Care),Outcomes Research,Assessment, Outcomes,Outcome Measures,Outcome Studies,Outcomes Assessment,Assessment, Outcome (Health Care),Assessments, Outcome,Assessments, Outcome (Health Care),Assessments, Outcomes,Measure, Outcome,Measures, Outcome,Outcome Assessments,Outcome Assessments (Health Care),Outcome Measure,Outcome Study,Outcomes Assessments,Research, Outcomes,Studies, Outcome,Study, Outcome
D017598 Efficiency, Organizational The capacity of an organization, institution, or business to produce desired results with a minimum expenditure of energy, time, money, personnel, material, etc. Efficiency, Administrative,Productivity, Organizational,Program Efficiency,Administrative Efficiency,Organizational Productivity,Efficiency, Program,Organizational Efficiency,Program Efficiencies

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