Academic journal article
By Henderson, Zorika Petic
Human Ecology Forum , Vol. 23, No. 1
No matter what happens on health care reform in Congress, reform is already irreversibly under way.
The traditional medical focus of curing sickness is now taking a backseat to preventing it, observed Keith Pryor at a Cornell Cooperative Extension satellite teleconference on health issues presented throughout New York State last fall. Pryor, a lecturer in the Sloan Program in Health Services Administration and a former hospital administrator, said the fee-for-service system is gradually being replaced by medical care given on a capitated, fixed-budget basis. The consequences, he noted, will be financial incentives for prevention and far less fragmentation of care.
"In many ways, the fee-for-service system, where the service provider is paid for each visit, has worked well. But it also has a number of perverse incentives. From a financial perspective, the emphasis is on sickness and not health; a filled hospital bed, for example, has a financial benefit to providers.
"Coordination among various components of the health care system is not a clear goal under this arrangement, and patients are often left on their own to navigate a complex, bewildering system."
Under the fixed-budget plan, known as the capitated model, or managed care, health maintenance organizations (the insurer) pay providers a fixed amount per enrollee per month. Insurers and health care providers thus have a strong incentive to keep patients well. …