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Upon completion of the chapter and exercises, the student pharmacist will be able to

  1. Identify the goals and types managed care organizations.

  2. Illustrate managed care business management techniques.

  3. Explain formulary management, the drug utilization review process, and disease state management.

  4. Discuss outcomes research.

The goals of the managed care organizations are as follows:

  • Prevent disease
  • Focus attention on wellness
  • Improve medication therapy
  • Base decisions on the entire population versus the individual
  • Cost containment

What could a managed care organization do in the case presented?

The patient's family is asking that he be allowed to die with dignity, how would this be handled in a managed care setting?

If the case itself does not present any opportunities, are there programs that a managed care organization could implement to prevent bicycle accidents for the members they serve?

What would they entail and how would they be implemented?

Would a program to prevent bicycle accidents fit into a larger prevention program?

Managed care organizations (MCOs) can trace their beginnings back to prepaid health plans in the early 1900s. These early group prepaid practices were the model and precursors for our current health maintenance organizations (HMOs). The HMO Act of 1973 authorized federal funds to help develop HMOs and preempted state laws that prohibited prepaid plans. At the close of 1996 there were over 600 HMOs in the United States with 25% of the population as subscribers or members.1 The National Committee for Quality Assurance (NCQA), a nonprofit organization, was formed in the 1990s as well. The NCQA seal is a symbol that a program is accredited and has passed rigorous comprehensive review, is well organized, and has met quality standards.2

A large portion of the US population receives health insurance coverage through their place of employment. Costs of health insurance were escalating in the 1980s because of inflation, new technology, and an aging population, causing employers to look for strategies in cost containment. As a result employers found they could achieve cost control by shifting from traditional indemnity insurance to more tightly managed plans during the 1990s.3

Managed care is a system to deliver health care, to contain costs, and to improve the quality and the access to medical and pharmacy care (Table 16.1). Managed care pharmacy strives to deliver effective medications through innovative and comprehensive programs while improving outcomes and the quality of life for the subscriber.4


Various types of MCOs exist (Table 16.2). They include HMOs, preferred ...

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