Health Care System Is Reforming Itself

By Henderson, Zorika Petic | Human Ecology Forum, Winter 1995 | Go to article overview

Health Care System Is Reforming Itself


Henderson, Zorika Petic, Human Ecology Forum


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. …

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