Preparing Hospital Administration for the Onset of Managed Care
Morefield, Hans Pieter
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The health care system in the United States has traditionally been delivered on the basis of fee-for-service, where the provider of health care has all the power in setting the price of service as well as determining the amount of service. This system has failed. Health care costs have exploded in the past decade, and experts are predicting health care costs will increase at an even faster pace through the 1990 s. Luckily, there is managed care, an alternative to fee-for-service, where the payer of health care wrests control of market forces, like price and supply, from the provider. Managed care may very well be the answer to controlling health care costs in the United States. Before managed care can reach its full potential as a system that will control costs, the health care industry must be prepared to make the change to managed care. In this paper, the author will examine one aspect of managed care, its effect on hospital administration and show that managed care has the negative effect of making hospital administration more complex and as a result more expensive. However, there is a solution; to ease the transition to managed care a computer system has been developed specifically to handle the complexities of managed care for hospitals. I will use an example from New York State to show the complexities of managed care and how this computer system negates the negative effects managed care has on hospital administration.