HSM 420 Provider Networks

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HSM 420 Provider Networks
Why do managed care organizations seek to establish a provider network? What are the…

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HSM 420 Provider Networks

HSM 420 Provider Networks

Course Discussions Week 2 All Students Posts – 31 Pages

Why do managed care organizations seek to establish a provider network? What are the primary reasons for contracting with providers?  Can an MCO survive without a provider network?

In a small town, how large can the provider network be?  It is often stated that the small town insured individuals complain about having to drive many miles to receive care. What is the average mileage an individual has to drive to receive care?  In many areas, patients have to travel 30 miles or more to receive basic care.  What can MCOs do to entice providers to practice in such areas?  You stated that purpose of managed care is to provide health care services.  To whom are these services to be provided?  Healthcare should be regarded as a right; however, it is being managed as a privilege.  Managed care was to make healthcare affordable, but unfortunately, the premiums continue to rise.  How are we to receive what is a right if we are unable to afford it? With knowing that an MCO cannot survive without a provider network, does this make the providers the authority?  Are they able to dictate reimbursement rates?  Since MCOs control costs, do providers feel the need to avoid certain testing or services to ensure that they remain compliant with the MCO?  Are providers foregoing quality care for compliance?  With an MCO, who benefits more a provider network or the patients?

Although it may be possible for a MCO to survive without a provider network, it is extremely difficult. Because there are many benefits to the MCO that come from establishing provider networks, MCOs without networks end up working much harder to remain viable. “Managed health care plans such as PPOs and HMOs are dependent on their networks to deliver medical care to their subscribers; even closed-panel HMOs depend to some degree on a network of private physicians and hospitals.”

If the MCO does not have an established network, there is no guarantee that their member will be treated by any providers. Not only can access to care be limited for members in MCOs without networks, when they do find a provider to treat them it could come at a must higher cost. One of the benefits of provider networks is that prices are reduced, and the payer never pays full price for services. If there is a higher cost to the payer, there will be a higher cost to the members. Members will probably not be happy to pay higher prices and premiums, so they will likely seek out a new insurance company. Eventually, this will result it losses for the MCO, and as stated earlier, it will be extremely difficult to remain viable. With higher costs, no guarantee of access to care for members, potential loss of members, and lower profits, it does not make sense for a MCO to choose not to have an established provider network. Although possible, it is not really probable because of all of the extra problems that come along with being without a network…