Nonfinancial Resources for Healthcare

The size and composition of the health care profession has been reshaped by the increase of managed care. There are always consequences to any decision that is made especially in business. The impact of managed care in regards to the long-term supply of healthcare providers will be seen in the United States. The problem of provider surplus especially with physicians could increase with managed care. The primary care and specialization imbalance could get worse. Managed care has caused medical education programs to be regulated by proposals and has also imposed caps on how many entrants can enter into specialty training programs. As you read this, the physicians market is being monitored by market forces for adjustments, which has been the result of managed care growth.

The medical education market, on the supply side of the market, receives large public subsidies. Depending on how many residents are in training, Medicare will pay the hospitals a certain bonus which has totaled $6 billion in recent years. Hospitals do rely on specialists more than they do generalists which have made them favor the production of medical specialists. Medicare has since put a freeze on per capita payments for specialists which helps increase the primary care physician's capita per payments. Now on the demand side there exist distortion because of problems with insurance and information.

One possible outcome in result of these situations happening would be a decrease in clinical income for teaching organizations, which in turn would cause a decrease in income for the health professionals. A variety of financial incentives are used by insurers to influence the behavior of the patient and the doctor. This causes the physicians income to be tied up. With capitation shifting treatment cost to providers the physicians that have costly services that are utilized make less than the average earning. This alters the demand for physicians, primary care physicians, and specialists. The ones that do make their earnings through hospitals could possibly be affected by managed care simply for the fact that strategies of managed care tend to target the expensive inpatient care. Another possible outcome in result of these situations happening would be a reduction in health professional student training sites, which in turn would cause the growing capacity of clinical diagnosis and treatment to stifle.

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