Management in Healthcare I 
Discussion Topic
This week we are focusing on healthcare as an industry and the volatility that we have seen in this sector over time. Healthcare is a dynamic and continually changing sector, similar to some ways to other industries but yet different and unique.
For this week’s discussion forum, do the following:

Review the Power Point Presentation for Week 2 titled The Volatile Healthcare Environment.
Consider and respond to the following questions (minimum of 250 words total):

In your estimation, what specifically makes the healthcare industry different and unique from other sectors of the economy such as IT or the retail industry? In what ways is healthcare similar to other industries? Please be specific and cite clear examples to support your answer.

At least 250 words. APA Format
-Ensure each post is substantial and supported by evidence from textbooks, journals, resources provided and/or reputable organizations (e.g. DOH, WHO, UNICEF, USAID, CDC, NIH, DHHS, and World Bank).

Course MaterialsRequired Text or E-Book: McConnell, C. (2015). The Effective Health Care Supervisor, 8th ed.Burlington, MA: Jones and Bartlett Publishers.THE VOLATILE HEALTHCARE ENVIRONMENT

Volatility in Healthcare

The healthcare sector continues to experience volatility.
We see volatility because of:
The demand and need for services (ex. aging population, people with chronic illnesses).
The costs of health care and how to pay for it.
How and where services are provided.
The government’s role in healthcare.

The Managed Care “Solution”

During the late 1960s and early 1970s, the concept of managed care arose.
The goals of managed care were to:
Reduce costs.
Improve quality.

The Managed Care “Solution”
These goals were to be achieved by:
Emphasizing preventive care.
Controlling access to services.
Reviewing services for medical necessity.
Increasing cost sharing (patients pay for part of their care)
Controlling hospital inpatient admissions and lengths of stay.
Offering physicians incentives to see patients at a predetermined cost.

The Managed Care “Solution”

Health Maintenance Organization (HMO):
HMOs were introduced in the 1970s.
They offered a defined set of healthcare services to people who enrolled in a service network.
HMOs placed significant restrictions on the use of services in order to control costs for both employers and users.
Users must pay specified deductibles and copayments.

The Managed Care “Solution”

By 2007, almost 90% of insured Americans were enrolled in managed care plans.
Managed care plans were experiencing financial problems as fewer people enrolled in managed care plans.

The Managed Care “Solution”

The costs of insurance coverage began to climb.

Concerns rose about its affordability.

Managed care plans began to withdraw from Medicare (due to low reimbursement rates).

The Managed Care “Solution”

Other reasons for rising costs:
Aging population (more users).
New/more expensive technologies.
Newer/more expensive drugs.
Demands from providers for higher reimbursement rates.

Balanced Budget Act of 1997

The Balanced Budget Act of 1997 required that federal agencies balance their budgets every year.
What impact did this have on healthcare?
It reduced spending for Medicaid and Medicare.
It put a cap on payments to home health agencies.
It added to the volatility of healthcare by reducing how much is spent on healthcare that services vulnerable populations.

The Marketing of Healthcare

Due to competition for patients, healthcare organizations now market their services to the general public.
They try to differentiate themselves from the competition by focusing on:

Healthcare Settings
Hospitals still employ the greatest percentage of healthcare workers.
However, more and more workers are finding work in other settings such as:
Long-term care (nursing homes)
Rehabilitation facilities
Medical/dental practices

Urgent care centers
Home health agencies
Health departments

The Affordable Care Act of

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