supply and demand to control the health care
system. The third, a middle of the road
approach, is known as "play or pay." This
involves businesses either purchasing insurance
for their employees or paying into a health
insurance pool for use in governmental pools.
All managed care is not government sponsored.
Managed care is in effect, in the pri-
vate sector, run by businesses that contract to
provide comprehensive health care for their
employees with group providers for specified
time periods and preestablished costs for
each employee. As a result, physicians have, in
increasing numbers, become part of cor-
porate medicine. They have been engaged as
salaried employees of Health Maintenance
Organizations (HMOs), which sometimes own
hospitals. These organizations hospitalize
patients much less frequently, and therefore
are less expensive than traditional fee-for-
service practitioners. HMOs have become
increasingly successful. They have stimulated
the formation of Independent Practice
Associations (IPAs), in which groups of physicians
treat patients in their own offices, and
Preferred Provider Organizations (PPOs), which
contract with companies to provide health care
to employees.
Group providers seek to offer internally as
much needed medical care as possible.
Highly specialized care that the group cannot
offer is supplied by outside specialists,
who are reimbursed by the group. If the cost to
the group at the end of the contract
period is less than that guaranteed in the
contract, the group will turn a profit. If the cost
is more, it will incur a loss. In managed care
under private control, physicians must
make critical medical and ethical judgments
about providing patients with access to
diagnostic and therapeutic medical services. In
contrast, in a fee-for-service relationship,
the physician is paid to provide the patient
with services that also necessitate making
professional judgments about what medical tests
and procedures are medically man-
dated, for it passes over into the area of
"defensive" medicine.
All of these developments clearly indicate that
increasing numbers of physicians
will elect to become salaried employees rather
than traditional fee-for-service doctors.
The prediction has been made that more than 75%
of newly graduated physicians will
eventually work this way.
There are concerns that too much time is being
spent by physicians on the business
aspects of conducting a medical practice,
especially dealing with HMOs. A recent inno-
vation is the formation of Practice Management
Companies (PMCs), which purchase
practices and then assume responsibility for
running the business end of them.
Having the office managed by a professional
company provides for greater leverage
when negotiating contracts with third-party
payers or managed-care firms. Physicians
are then free to devote themselves to providing
patient care and avoid the distractions of
the business phase of a practice for which they
usually lack training and skills.
Physicians are also taking courses in business
administration. This provides them
with a grounding in the fundamentals of running
their practice like a business.
SPECIALISTS VERSUS PRIMARY CARE
PHYSICIANS
In the course of the past half century, the
number of specialists has increased dramati-
cally. At the same time, the number of primary
care physicians (general practitioners or
family physicians) has declined
substantially.
As noted above, primary care is becoming
especially important as the health care
system is being revamped. Because of the
over-abundance of specialists, it is believed
that health care is excessively expensive and
less focused on prevention. The goal,
therefore, is to establish a suitable balance
between specialists and primary care physi-
cians. To shift the trend away from
specialization, there is a move on to restrict funding
for subspecialization and to create incentives
for those entering primary care.
Among the attractive features of primary care
is the opportunity for treating patients
of all ages. Another appealing element for a
primary care physician is the wide variety
of cases one is able to treat. A third feature
is that of providing continuing care and the
development of a special bond between the
patient and the physician.
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