Running head: HEALTHCARE MARKET DELIVERY SYSTEM- WEEK 5 DB 1
Healthcare Market Delivery System- Week 5 DB
The structure of the physician services market encompasses the Managed Care vs. Fee-for-Service model. The Managed Care model offers a medical care system that integrates the financing and provision of healthcare into one organization, while the Fee-for-Service model is the traditional payment method for medical care in which a provider bills for each episode of care. The adoption of either service market would be significantly affected by cost savings strategies adopted by large medical groups. There is the issue of Healthcare Risk in which the service market depends on the uncertain need for health care services. This is the unpredictability of consumers demand for healthcare services and the provider's ability to achieve optimal outcomes (Gold, 1998). Since healthcare risks are uncertain and the degree varies, the patient may or may not be able to bill for the services given. The patient's ability to pay for the medical expenses determines greatly the type of healthcare provided. The adoption of either model would be factored by the patient's ability to meet the costs of healthcare services, thus subsequently affecting the question of the cost-effective strategies by the provider.
If for instance, a patient can comfortably meet the fee for each episode of medical care, then the organization would best adapt the Fee-for-Service model, which is more cost effective since care is only given by the ability to meet the cost. On the other hand, if an institution adopts the Managed Care model system, it may be more costly, and affect negatively the cost-saving plans taken. This is because of the integration of financing and provision of healthcare into one organization results in a standard charge on health care, regardless of the cost incurred in providing a particular healthcare service (Robinson, 2001). So if the cost of providing a service is higher than the set healthcare fee, the medical organization is bound to cater partly for the service, thus affecting the strategies in place for cost-savings.
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References
Gold, M. (1998). Beyond coverage and supply: measuring access to healthcare in today's market. Health Services Research , 33 (3 Pt 2), 625.
Robinson, J. C. (2001). Theory and practice in the design of physician payment incentives. The Milbank Quarterly , 79 (2), 149-177.
