Managed Care Succeed in Reducing

¶ … Managed Care Succeed in Reducing Medical Expenditures?

Managed health care plans have succeeded in the reduction of medical expenses. In other countries, the reduction of the growth rate of health care cost is normally included in the budget and it's upon the government to take care. In the United States, government hospitals have failed in their functions leaving private hospitals with the major responsibility of increasing the efficiency of managed health care system. This has led to the success of managed health care plans in the reduction of medical expenses and the competition growth rate has also gone up.

The two major ways with which managed care has succeeded in lessening medical expenditures are through inducing competition, which lessens the costs and growth on insurance markets. Moreover, these plans have contributed to the growth of sophisticated methods of managing utilization and identifying cost-conscious providers. Consequently, managed care has enabled the beneficiaries to carry on with plans that would offer even lesser premiums regardless of the limitations on choice of providers. In addition to the emergence of selective contracting, managed care has forced health facilities in more competitive areas to change their relative costs and revenues, resulting in reduction of medical expenditures. Health care facilities that provide less-costly care services obtain a major competitive advantage that result in reduced costs.

In California, managed health care competition is one of the factors that have led to the success in reduction of health cost. The same competition was seen in New York and New Jersey where expenses like hospital services, physician services and pharmaceuticals were affected and each of them were being done annually (Zwanziger & Melnick p. 193). However in a survey conducted between the years 1980-1991 shows that in California, the average annual growth rate was much lower than the national average rate while in other states, the average annual growth rate is higher than the national average.

What Steps can be taken to Limit Increases in Medical Expenditures?

As compared to other developed nations, medical expenditures in America have gone beyond 14% of the Gross Domestic Product. The increase in the medical expenditures has been influenced by various factors including the rising premium costs that have left more than 30 million people uninsured. Consequently, there is need to adopt various measures that could help in reducing or limiting increases in medical expenditures.

One of the ways that can lead to the reduction of health care expenses is by preventing illnesses. Statistics has clearly shown that in the United States, the causes of death have been grouped into different categories by laying down the exact causes instead of grouping them using the traditional oriented method. Lessening the risk of preventable illnesses is crucial for the reduction of medical costs because preventable diseases constitute approximately 70% of the burden of diseases and associated expenditures (Fries et. al., par, 8). Risking medical cost is another way that would limit the growth of medical expenditure whereby those with poor health habit are highly associated with greater illnesses and high humanity rate.