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Suppose that doctors' visits cost $20, and the typical consumer has an income of $100. Consumers spend all of their incomes on doctors' visits and a composite good that costs $1 per unit.

Now, suppose the localgovernment is considering two health plans. Under plan A, the government will give out vouchers worth 2 free visits to the doctor.Under plan B, the government will give out four 50% coupons to be used at the doctor's office.

d) For whom is the choice of plan A or plan B not likely to matter those who are quite well, or those who are quite sick? (Hint:Superimpose some indi erence curves on your budget constraints.)

e) Which plan would someone who is generally well be likely to choose,if offered a choice

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PROVIDE A RESPONSE OR STATEMENT TO THIS STUDENTS DISCUSSION:

1 - Please share your experience on selecting a managed care plan. Please discuss the advantages and disadvantages of your MCO plan.

Up until about ten years ago my company offered an HMO MCO plan option managed by Kaiser Permanente. This plan was less expensive in my paycheck deduction and offered $10 co-pays for every office visit and 100% hospitalization. In 1992 as a single young man in my twenties I found this option very attractive. I ended up getting married early that year, had a flu episode and a bout of food poisoning. My wife ended up with a hospitalization as well. What looked good on paper ended up being a very restricted healthcare experience. My office visits were restricted to only one clinic where the health care professional point of contact were physicians assistants under the supervision of an MD which we never saw. All of the prescriptions were for generic medicines and when my wife was hospitalized she was not allowed branded medicines either. We also thought she was discharged too early. The advantages of this type of plan are costs and simplicity. If we had not been sick that year we probably would have signed back up for it. The disadvantages were that our level of care was reduced to a less skilled health care professional and the attending physician who cared for my wife in the hospital discharged my wife early due to a time limit the HMO had placed on the length of stay for her illness code. That was the first and last year I chose an MCO plan for my health coverage.

2 - Many argue that there is no consistent, direct correlation between the cost of care and its quality in a managed care program. Do you agree or disagree?

In my personal experience managed care plans attempt to lower the primary care contact to non MD health care professionals such as Nurse Practioners and Physicians Assistants. While these clinicians are well trained and certainly have their appropriate place in medicine, they do not have the extensive medical training that MDs and DOs spend a minimum of 8 years mastering. These clinicians cost less than MDs and are very attractive way to reduce staffing costs. As a patient however I prefer the highest skilled level clinician caring for me and my family and am willing to pay more for this higher level of care. In my opinion Kaiser Permanente may have saved money but I was not happy with the level of care and medicines provided. They may have saved money that year but they lost me as a customer. Epstein et al, (2014) compared Accountable Care Organization (ACO) patients with non ACO patients and while they found that there were many differences in spending, age, and severity of illness, there was no difference in quality metrics despite non ACO members costing more overall. It would seem that in this example costs can be lowered without affecting quality outcomes. However ACO participants had access to significantly more participating clinicians and hospitals. What is missing from this study is a patient survey comparing the satisfaction of ACO and non-ACO patients.

3 - Do you think patients' choice of provider and access to care will be limited under ACOs?

In my personal experience and through observations of managed care offices and hospitals as a pharmaceutical representative, ACOs not only restrict the choice of provider and access to hospitals they utilize lesser trained medical professionals in Primary Care, Specialty and Hospitals in addition to restricting access to branded medications. This observation is in agreement with Epstein et al, (2014) in which ACO members cost less but had less access and choice of participating access points and clinicians.

4 - In what ways can an ACO succeed in both delivering high-quality care and spending health care dollars more wisely?

ACOs can be very useful in curbing costs. For those with limited health care budgets or those patients who receive public assistance an ACO model whether public or private. However Lewis et al, (2014) found that even though there was an almost even split between ACOs contracting for private and public contracts in the U.S.A., public contracts were less profitable than private ones due to public patients costing more to manage per capita than private ones. Quality was not examined. It would seem that an ACO would be ideal when faced with limited resources but ACOs may be reluctant to engage in contracts that are less profitable.

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