Financial Issues Dominate Managed Care Leadership Concerns
Contact: The MCIC
MANASQUAN, NJ -- May 29, 2008:
Financial issues dominate the concerns of health and managed care company
executives, according to a survey by the Managed Care Information
Fifty-eight percent of those polled cited financial
issues as one of the greatest challenges confronting the healthcare
Of the 58 percent, half cited costs as one of the
greatest challenges while the other 50 percent said healthcare
reimbursement and payment issues dominated their thinking.
The survey on the managed care market, "The Managed Care
Leadership Survey: Forecast 2008" was conducted by The Managed Care
One respondent, a manager of group products marketing for an HMO,
cited cost trend mitigation as a chief concern. "Significant medical
cost increases are pricing employers and individuals out of the market
and decreasing the richness of benefits that the insured are able to
An executive vice president of a healthcare consulting firm agreed
and said cost is the greatest threat to the industry because "it is
pricing people out of the private health insurance market and forcing a government
solution. Costs are creating problems for business competition."
Respondents also cited drug pricing as a threat to the industry.
The manager of healthcare reporting and market analysis
for a physician organization said that too many health plans are not paying
the right amount for drugs. The prices, the manager said, are either
"way too high or way too low" and are creating issues for everyone
involved – payers, providers, patients and pharmaceutical companies.
An assistant director of a health insurance company agreed and said,
"advertising created a demand for new brand name drugs and increases
the use when other less expensive drugs may be just as effective."
The underlying fear among those citing the cost issues
is that the government will intervene now that healthcare has become an
election year issue.
Reimbursement is always an issue in the health industry.
"Competitive pricing in the market among health insurers and
PPOs is of concern to the provider community as the top insurers
dominate in pricing and the smaller networks will have to receive
better pricing from the providers in order to compete," said the
director of a medical center.
"This matter will affect the net
revenue for providers as either pricing must deepen for the smaller
networks or the business will otherwise transition to the larger
insurers who in most cases have the deepest discounts," he said.
A director of managed care for a physician organization
said the decline in reimbursement rates by private sector payors and
government payers is a threat. "We are expected to improve our quality
of care through technology which is very costly while we are reimbursed
The president of Fagin Advisory Services Inc., Howard
Fagin, said the fee schedule reductions by Medicare are impacting the
rates provided by managed care payors. He noted that the survival of
physician practices and growth in the number of physicians are
dependent on practice income.
The president of a physician organization cited the top three challenges facing providers as:
1) Getting paid accurately according to the contract;
2) Fighting against access to our contracts that is not specifically stated in the contract; and
3) Continued downward pressures by payors on reimbursement to providers.
The executive said the greatest threat was that "everyone seems to
think the problems in the nation’s healthcare system can be cured
by paying the providers less."
A medical center vice president for business development said the continued governmental ratcheting down of reimbursement
levels for payers and providers is a challenge.
"Reimbursement throughout the healthcare delivery system is problematic," he added.
The executive director of managed care contracting for a
medical center said that "lowering reimbursement to hospitals is not
the answer. Patients suffer. The MCOs pocket the profits at the expense
of the consumer. Those patients who have little to no coverage also
suffer since the hospitals can no longer afford indigent
The survey results are published in The Executive Report on Managed Care, www.healthresourcesonline.com/managed_care/14nl.htm
About the Managed Care Information Center:
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